Agreement 005-2021

PURPOSE. - This Ministerial Agreement has as its purpose to establish the national procedure for the establishment, modification or elimination of safeguard measures under the provisions of Article 26 of the Convention on the Central American Tariff and Customs Regime.

SCOPE OF APPLICATION. The rules contained in this Agreement shall apply throughout the national territory for all those acts, facts and situations regulated in Article 26 of the Convention on the Central American Tariff and Customs Regime.

DEFINITIONS. 1. BASIC FINAL GOODS: Elaborated products that do not require modifications and that are intended for the consumer, in order to satisfy a need of a basic nature. 2. COHEP: Honduran Private Enterprise Council, an entity of technical support and oversight in the process of establishment, modification or elimination of safeguard measures. 3. DAI: Tariff Rights on Imports 4. MARKET DISORGANIZATION: It is when a certain situation threatens to halt and/or hinder the normal functioning of the Market and that impacts directly or indirectly the consumer, such as: unfair trade practices and unjustified price increases, competitiveness-related problems that affect market equilibrium or any other circumstance that threatens to lead to a situation of national emergency. 5. RAW MATERIALS: Any element that is transformed and incorporated for the elaboration of a final product. 6. NATIONAL PRODUCTION BRANCH: The group of national producers of similar or directly competing products that operate within the national territory constituting an important proportion of national production. 7. SAFEGUARD: Modification of Tariff Rights on Imports when the State of Honduras is faced with serious problems of balance of payments imbalance; sudden and widespread deficiencies in the supply of raw materials and basic final goods; market disorganization; unfair trade practices; competitiveness-related problems that affect market equilibrium or any other circumstance that threatens to lead to situations of national emergency, in accordance with the provisions of Article 26 of the Convention on the Central American Tariff and Customs Regime. 8. SDE: Secretariat of State in the Office of Economic Development, authority responsible for the investigation for the establishment, modification or elimination of safeguard measures. TITLE II AD HOC COMMISSION

CREATION OF AD HOC COMMISSION. An Ad Hoc Commission is hereby created to issue the technical report on requests for establishment, modification or elimination of safeguard measures in accordance with Article 26 of the Convention on the Central American Tariff and Customs Regime.

COMPOSITION. For the fulfillment of its objectives and the execution of its powers, the Commission must be composed of:

• 1)

  A Representative of the Secretariat of State in the Office of Economic Development (SDE) of high level, who shall preside and shall have a casting vote;

• 2)

  A Representative of the Secretariat of State in the Offices of Agriculture and Livestock, with voice and vote;

• 3)

  A Representative of the Honduran Customs Administration, with voice and vote; and, 4. A Representative of the Secretariat of State that has a relationship with the matter, with voice and vote; and, 5. A Representative of the Honduran Private Enterprise Council (COHEP), with voice. The representatives of the aforementioned Institutions must have an alternate who must attend in case of absence of the principal.

POWERS AND AUTHORITIES. The Ad Hoc Commission shall have the following powers and authorities: 1. To meet when convoked by the President of the Ad Hoc Commission. 2. To conduct the initial analysis to determine whether or not it is appropriate to initiate an investigation process. 3. To conduct the necessary inspections; 4. To request any type of information, both internal and external, that may be necessary to support the analysis of the request. The applicant shall only be required to provide information contained in their records and accounting books. 5. In the event there are conflicting parties, to hold hearings to listen to the parties (applicants and affected parties), if any; in order to grant interested parties the opportunity to interrogate, orally refute their counterparts and also request specific clarifications and explanations before the investigating authority. 6. To review and approve the technical report, after having heard the conflicting parties. 7. Voting must be by consensus. In any case, each vote must be reasoned. 8. To send the final technical report to the SDE, to continue with the process. 9. To extend the deadlines established in this Agreement, in accordance with the complexity and circumstances of the case.

REVIEW AND ANALYSIS OF DETERMINATIONS OF THE AD HOC COMMISSION. All determinations established by the Ad Hoc Commission must be reviewed and analyzed taking into consideration the Central American and national legal instruments that are related to the establishment, modification, or elimination of safeguard measures. TITLE III TECHNICAL SECRETARIAT OF THE AD HOC COMMISSION

TECHNICAL SECRETARIAT. The Ad Hoc Commission shall have a Technical Secretariat, which provides technical, logistical, and administrative support to fulfill the functions of the Commission. The Technical Secretariat must be headed by the General Directorate of Economic Integration and Commercial Trade Policy attached to the Under-secretariat of Economic Integration and Foreign Trade of the State Department for Economic Development.

FUNCTIONS OF THE TECHNICAL SECRETARIAT. The functions of the Technical Secretariat are as follows:

• 1)

  To verify that requests for establishment, modification, or elimination of safeguard measures comply with all legal requirements;

• 2)

  To request the information determined as necessary by the Ad Hoc Commission;

• 3)

  To convoke sessions by instructions of the presidency of the Ad Hoc Commission;

• 4)

  Preparation of the Agenda;

• 5)

  To verify the Quorum;

• 6)

  Preparation and maintenance of the minutes duly signed by all members of the Ad Hoc Commission;

• 7)

  To maintain a registry of the members and alternates of the Ad Hoc Commission;

• 8)

  To coordinate, at the request of the Commission, on-site visits of the production process;

• 9)

  Follow-up of activities assigned by the Ad Hoc Commission;

• 10)

  To prepare and propose to the Ad Hoc Commission the Technical Report on the establishment, modification, or elimination of the Safeguard measure; and, 11. Other duties delegated by the Ad Hoc Commission.

LEGAL TECHNICAL SUPPORT. The Ad Hoc Commission may request technical and legal support from the institutions that comprise it, as well as from any State agency that it deems appropriate for the fulfillment of its functions. TITLE IV ESTABLISHMENT, MODIFICATION, OR ELIMINATION OF SAFEGUARD MEASURES

GROUNDS FOR SAFEGUARD MEASURES. Every measure that implements a unilateral modification of Tariff Rights on Imports in accordance with this Agreement must present documentary justification regarding:

• 1)

  Damage caused to the national production branch, the probable timeframe required for the restoration of normal conditions and any other information that provides sufficient elements and means of proof for the determination of the situation and the manner of resolving it;

• 2)

  Balance of payments disequilibrium problems;

• 3)

  Generalized shortage of raw materials or basic final goods;

• 4)

  Market disorganization that will be based on the existence of or real threat of damage to national producers;

• 5)

  Unfair trade practices that cause or threaten to cause harm to the national production branch;

• 6)

  Problems related to competitiveness that affect market equilibrium; or, 7. Any other circumstance that threatens to result in a national emergency.

PROCEDURE. The establishment, modification or elimination of the safeguard measure shall be subject to the following procedure:

• 1)

  Requests for the establishment, modification or elimination of safeguards:

  • a)

    May be made by business associations of productive sectors or at the corporate level;

  • b)

    Must be directed to the Maximum Authority of the State Secretary's Office of Economic Development; and, c. Must be presented before the General Secretariat with the formalities required by law, who must immediately transfer it to the General Directorate of Economic Integration and Commercial Policy of said Secretariat;

• 2)

  The General Directorate of Economic Integration and Commercial Policy shall immediately forward the aforementioned request to the members of the Ad Hoc Commission and shall convene a meeting within the following five (5) business days. 3. In the event that the Ad Hoc Commission determines that additional information is needed, it may request it through the General Secretariat of the State Secretary's Office of Economic Development from the applicant and/or other competent institutions. The applicant shall only be required to provide information that exists in their records and accounting. The deadline to comply with the request shall be a maximum of ten (10) business days counted from the date of notification. 4. Once the aforementioned deadline or requirement is met, immediately, the General Secretariat of the SDE must return the file to the Technical Secretariat; 5. The Technical Secretariat with the information contained in the file must proceed to prepare the technical report that will be submitted for approval before the Ad Hoc Commission, within a maximum period of ten (10) business days counted from receipt of the file. 6. The Ad Hoc Commission must analyze the report of the Technical Secretariat, on which it shall issue observations, modifications, as well as approval when appropriate. 7. If the initiation of an investigation is warranted, the Ad Hoc Commission must conduct on-site visits (inspections), for the purpose of verifying the production process, in which a representative of the company must participate. Such visits must be conducted within a maximum period of ten (10) business days counted from the presentation of the technical report; 8. The Ad Hoc Commission within a maximum period of ten (10) business days counted from when the Technical Secretariat presented the technical report, may hold hearings to listen to the parties that have relation with the matter; 9. Once the Hearings and/or on-site visits have been conducted, the Technical Secretariat must prepare and submit for approval the technical report to the Ad Hoc Commission within a maximum period of ten (10) business days counted from the last administrative action; The Commission must analyze the report of the Technical Secretariat, on which it shall issue observations, modifications, as well as approval when appropriate. 10. Once the technical report is approved by the Commission, it must be forwarded through the Technical Secretariat to the General Secretariat of the State Secretary's Office of Economic Development. 11. The General Secretariat of the State Secretary's Office of Economic Development must issue the corresponding administrative act within a maximum period of five (5) business days counted from receipt of the technical report by the Commission. 12. When it is determined that the implementation of a safeguard measure is warranted, the Ad Hoc Commission must indicate the duration period in the report that it will forward to the General Secretariat of the SDE.

OVERSIGHT. In all procedures for the establishment, modification or elimination of safeguard measures, the Ad-Hoc Commission must request the accompaniment in the capacity of observer of the Honduran Council of Private Enterprise (COHEP), as well as any other institution it deems pertinent.

CONFIDENTIALITY. All information derived from the investigations that are carried out and in general for the establishment, modification or elimination of Safeguard Measures shall have a reserved character. The persons who participate in the meetings of the Ad-Hoc Commission must maintain absolute confidentiality of such information.

CHALLENGE OF THE ADMINISTRATIVE ACT. The Administrative Acts described in the previous Article may be challenged through the mechanisms established in the Administrative Procedure Law.

MONITORING. The General Directorate of Economic Integration and Commercial Trade Policy must conduct quarterly monitoring regarding the impact of safeguard measures adopted, in relation to imports, national production and consumption; and the General Directorate of Consumer Protection must conduct monitoring and evaluation of final prices on wholesale and retail consumer sales. Such reports must be submitted to the Ad Hoc Commission within the first 10 days of the completed quarter. The Ad Hoc Commission may execute cooperation agreements with public and private entities in order to monitor the impact of safeguard measures.

NOTIFICATION TO SIECA. The State Secretariat in the Ministry of Economic Development must notify the establishment, modification or elimination of safeguard measures to the Central American Economic Integration Secretariat (SIECA), so that it informs the Council of Ministers of Central American Economic Integration.

NOTIFICATION TO THE CUSTOMS ADMINISTRATION. The State Secretariat in the Ministry of Economic Development must immediately notify the establishment, modification or elimination of safeguard measures to the Honduran Customs Administration so that it instructs the Customs offices throughout the National territory for strict compliance.

EFFECTIVE DATE. This Agreement shall enter into force on the eleventh (11th) of January of the year two thousand twenty-one (2021) and must be published in the Official Journal "La Gaceta". Given in the city of Tegucigalpa, MDC, on the eleventh (11th) of January of the year two thousand twenty-one (2021). MARIA ANTONIA RIVERA PERSON IN CHARGE OF THE STATE SECRETARIAT IN THE MINISTRY OF ECONOMIC DEVELOPMENT DUNIA GRISEL FUENTEZ CÁRCAMO GENERAL SECRETARY