Law for the Defense and Promotion of Competition

CONCEPTS AND DEFINITIONS. For the purposes of this law, the following terms are understood to mean:

• 1)

  THE COMMISSION: The Commission for the Defense and Promotion of Competition;

• 2)

  FREE COMPETITION: A situation in which conditions exist for any economic agent, whether supplier or demander, to have complete freedom to participate in the market, and those within it do not have the possibility, either individually or in collusion with others, of imposing any condition in exchange relations that affects the efficient functioning of the market;

• 3)

  CONSUMER: A natural or legal person, de facto or de jure, public or private, who as a final recipient acquires, enjoys or uses goods or services, receives information or is offered the same;

• 4)

  COMPETING ECONOMIC AGENTS: Economic agents that operate in the same relevant market;

• 5)

  POTENTIAL COMPETING ECONOMIC AGENTS: Economic agents that on the basis of realistic criteria are capable of making the supplementary investments or adaptation expenditures necessary to participate in the market within a short period;

• 6)

  MARKET: The set of facts and relations that enable the exchange of goods or services under circumstances determined by supply and demand that fix prices and other conditions of commercialization; and,

• 7)

  RELEVANT MARKET: That which is defined in function of the product market and the geographic market. The product market is the totality of goods and services that consumers consider interchangeable or substitutable by reason of their characteristics, their price or the intended use to be made of them. The geographic market requires evaluation of the territorial scope of the zone in which supply and provision activities of goods and services are developed, in which the conditions of competition are quite homogeneous and can be distinguished from other zones due, in particular, to the fact that the prevailing conditions of competition are substantially different from those.

PUBLIC ORDER. This law is applicable to all areas of economic activity, even when they are regulated by their special laws, regulations or resolutions. The provisions of this law are of public order and against their observance cannot be alleged customs, usages, practices or commercial stipulations.

PERSONS SUBJECT TO THE LAW. All economic agents, or their associations, whether natural or legal persons, organs or entities of public administration, municipal, industrial, commercial, professional, entities with or without profit purposes, or other natural or legal persons who, by any title, participate as active subjects in economic activity within the territory of the Republic of Honduras are subject to this law. Professional associations are also considered economic agents subject to this law, whether or not they have legal personality. Likewise, those persons with legal domicile outside the territory of the Republic of Honduras are subject to the provisions of this law when their activities, contracts, agreements, practices, arrangements, acts or business transactions produce effects within national territory. The exercise of economic activities corresponds primarily to private parties. However, the State, for reasons of public order and social interest, may reserve to itself the exercise of certain basic industries, exploitations and services of public interest and may enact economic, fiscal and public security measures and laws to direct, stimulate, supervise, guide and supplement private initiative, based on a rational and planned economic policy.

RESTRICTIVE PRACTICES PROHIBITED BY NATURE. Contracts, agreements, concerted practices, combinations or arrangements between competing or potentially competing economic agents, written or verbal, whose object or fundamental effect is any of the following are prohibited:

• 1)

  Establishing prices, tariffs or discounts;

• 2)

  Restricting, totally or partially, the production, distribution, supply or commercialization of goods or services;

• 3)

  Dividing, directly or indirectly, the market in territorial areas, clientele, supply sectors or sources of procurement;

• 4)

  Establishing, concerting or coordinating bids or concertedly refraining from participating in bids, quotations, contests or public auctions.

LEGAL INVALIDITY. Contracts, agreements, concerted practices, combinations or arrangements prohibited according to Article 5 of this law are null. Economic agents that carry them out shall be sanctioned in accordance with this law, without prejudice to the criminal or civil liability that corresponds. These economic agents must be sanctioned, even when these contracts, agreements, concerted practices, combinations or arrangements have not yet begun to produce effects.

RESTRICTIVE PRACTICES TO BE PROHIBITED ACCORDING TO THEIR EFFECT. Contracts, agreements, combinations, arrangements or conduct not included within the scope of Article 5 of this law are prohibited by their effect when they restrict, diminish, damage, impede or undermine the process of free competition in the production, distribution, supply or commercialization of goods or services. The following are considered practices prohibited by their effect:

• 1)

  Among economic agents that are not competitors with each other, the imposition of restrictions concerning territory, volume or customers, as well as the obligation not to produce or distribute goods or services for a determined time to a distributor or supplier economic agent in order to sell goods or provide services;

• 2)

  The fixing of prices or other conditions that the distributor or supplier economic agent must observe when selling goods or providing services;

• 3)

  Concertation among economic agents to exercise pressure against some economic agent with the purpose of dissuading it from a determined conduct or obliging it to act in a determined sense;

• 4)

  The subordination of contract execution to the acceptance of supplementary benefits that by their nature or according to commercial usages are not related to the object of such contracts;

• 5)

  A transaction subject to the condition of not using, acquiring, selling or providing goods or services produced, distributed or commercialized by a third party;

• 6)

  The fixing of prices below cost to eliminate competitors totally or partially or the application of disloyal practices;

• 7)

  The limitation of production, distribution or technological development by an economic agent, to the detriment of other economic agents or consumers;

• 8)

  The granting of favorable conditions by an economic agent to its purchasers with the requirement that their purchases represent a determined volume or percentage of the demand of those; and,

• 9)

  Any other act or transaction that the Commission considers restricts, diminishes, damages, impedes or undermines the process of free competition in the production, distribution, supply or commercialization of goods or services. The Commission through regulation or other legal instruments shall determine and develop the criteria established in Articles 8 and 9 of this law for the qualification of contracts, agreements, combinations, arrangements or conduct that undermine the process of free competition.

MATERIAL FACT. Contracts, agreements, combinations, arrangements or conduct that are considered to infringe the provisions of Article 7 of this law can only be declared prohibited if it is proven that the participation in the affected market of the set of economic agents involved or one of them is greater than what the Commission establishes for the purposes of determining whether the conduct of economic agents is prohibitive. The Commission, considering the market conditions and the behavior of those involved in it, is authorized to establish percentages lesser or greater of participation in the relevant market.

ECONOMIC EFFICIENCY AND CONSUMER WELFARE. Contracts, agreements, combinations, arrangements or conduct that generate increases in economic efficiency and consumer welfare do not restrict, diminish, damage, impede or undermine free competition and compensate for the negative effect to the process of free competition. Increases in economic efficiency and consumer welfare are considered to be improvements in the conditions of production, distribution, supply, commercialization or consumption of goods or services. Whoever invokes increases in economic efficiency and consumer welfare as a result of their acts shall prove such assumptions.

OBTAINING AND FINDING NOTABLE MARKET PARTICIPATION. An economic agent that has notable market participation does not infringe this law if such position has not been obtained through practices or conduct prohibited by this law.

ECONOMIC CONCENTRATION. Economic concentration is understood to mean the taking or change of control in one or several companies through shareholding participation, control of administration, merger, acquisition of property or any right over shares or capital participations or debt securities that cause any type of influence in corporate decisions or any act or acts by virtue of which shares, social interests, trusts or assets are grouped that occur between suppliers, customers or any other economic agent. Eventual associations formed for a defined time to develop a determined project are not considered as economic concentrations.

PROHIBITED CONCENTRATIONS. Economic concentrations whose objective or effect is to restrict, diminish, damage or impede free competition are prohibited. Economic concentrations that generate increases in economic efficiency and consumer welfare in the terms of Article 9 of this law and compensate for the negative effect of the process of free competition are compatible with this law and do not restrict, diminish, damage or impede free competition.

MANDATORY PRIOR NOTIFICATION AND VOLUNTARY PRIOR VERIFICATION. Before taking effect, economic concentrations must be notified to the Commission by economic agents and they may be subjected to verification by it; in accordance with what is provided in Articles 54 and 55. The Commission must define which concentrations should be verified considering the amount of assets, participation in the relevant market or sales volume. The failure by the economic agents involved to comply with the notification terms referred to in the first paragraph of this article shall be considered a breach of what is established in this law.

EFFECTS OF PRIOR VERIFICATION IN CASE OF APPROVAL. Economic concentrations that have been approved by the Commission cannot be subsequently challenged by reason of the elements verified, except when the favorable approval was obtained based on false information provided by the economic agents involved.

INVESTIGATION. When an economic concentration has not been submitted to prior verification and it is presumed to restrict, diminish, damage or impede free competition, the Commission, within a period not greater than three (3) months after the concentration has been completed or from the date it became aware of it, must initiate ex officio or at the request of a party, an investigation during which it must require the economic agents involved to provide information that is relevant to the investigation referred to.

CONCENTRATION ANALYSIS; ELEMENTS OF VERIFICATION OR INVESTIGATION. To determine whether an economic concentration complies with this law, an economic analysis is conducted in which the following criteria, among others, must be considered:

• 1)

  The market share of participating economic agents and their effects with respect to other competitors and purchasers of the goods or services, as well as with respect to other markets and directly related economic agents;

• 2)

  Whether there is a possibility that the economic concentration permits, promotes or carries out prohibited practices or conduct or the imposition of barriers to entry for new economic agents;

• 3)

  Whether there is a possibility that the economic concentration facilitates unilateral price increases, without other economic agents being able, actually or potentially, to counteract such power; and,

• 4)

  The necessity of the economic concentration as the only option to prevent the exit from the market of the productive assets of one of the economic agents participating in the concentration involved. The Commission for the Defense and Promotion of Competition may, through regulations or resolutions, determine and develop other criteria for the analysis of economic concentrations.

APPOINTMENT REQUIREMENTS. To be a Commissioner, the following are required:

• 1)

  To be a Honduran citizen over thirty (30) years of age;

• 2)

  To be in the enjoyment of citizen rights;

• 3)

  To have no criminal record;

• 4)

  To be a university professional in legal and social sciences, economics and administration; and,

• 5)

  Experience of no less than five (5) years in professional or academic practice.

INELIGIBILITIES. The following cannot be members of the Commission:

• 1)

  Those who are direct or indirect contractors or concessionaries of the State;

• 2)

  Those who are spouses or relatives within the fourth degree of consanguinity or second degree of affinity of the President or Vice President of the Republic, of the Secretaries of State, of the presidents or managers of decentralized or deconcentrated institutions of the State or of the presidents of the other branches of the State, of the Attorney General and Deputy Attorney General of the Republic;

• 3)

  The shareholders or administrators of institutions of the financial system or of institutions supervised by the National Banking and Insurance Commission that have been or are subject to forced liquidation procedures or to the extraordinary capitalization mechanism;

• 4)

  Those who have been declared legally incapable by judicial authority; and,

• 5)

  Those who have been sanctioned for violation or non-compliance with this law.

RECUSAL DUE TO PERSONAL INTEREST. When a member of the Commission has a personal interest in any matter that must be discussed or decided by the Commission, or his or her spouse has such interest, or his or her relatives within the fourth degree of consanguinity or second degree of affinity, he or she must recuse themselves from the presentation and until the conclusion of the corresponding matter. The withdrawal must be recorded in the minutes. The Commissioner shall be temporarily replaced to constitute quorum at the Commission sessions, the Commission selecting for this purpose one of the officials responsible for the technical or administrative units of greater hierarchical rank in the organization. When a Commissioner must be replaced for reasons of force majeure, illness or other reason, the temporary replacement cannot exceed six (6) months. If when the period of six (6) months has elapsed the Commissioner cannot return to his duties, the Commission shall notify the National Congress so that it may proceed to appoint the replacement in accordance with what is established in this law.

GROUNDS FOR REMOVAL. The members of the Commission shall cease their functions due to:

• 1)

  Death;

• 2)

  Resignation;

• 3)

  Order of preventive imprisonment, alternative measures or declaration as a defendant;

• 4)

  Physical or mental incapacity arising subsequently and duly proven; and, 5) Manifest negligence in the performance of his duties. In case of cessation of a Commissioner, the Commission shall notify the National Congress within a period of no more than ten (10) business days. The National Congress shall appoint the new member of the Commission within a term of thirty (30) business days. In the meantime and until the replacement takes office, the second paragraph of the previous article shall apply. The appointment of the new Commissioner shall be for the period that was remaining for the Commissioner who has ceased his functions.

HIRING RESTRICTION. Commissioners who cease in the exercise of their functions cannot be hired in any form within a period of six (6) months by companies that have been subject to investigation processes in the last two (2) years.

COMMISSION SESSIONS. The Commission must meet ordinarily once a week. It shall meet extraordinarily when necessary. An Internal Regulation shall regulate its functioning. For the Commission sessions to be valid, all of its members must be present and decisions shall be taken by simple majority of votes.

CONFIDENTIALITY. Commissioners, officials and employees who disclose information about matters that the Commission knows or take advantage of it for personal purposes or in detriment to the Commission, the State or third parties, shall incur civil and criminal liability.

ADMINISTRATIVE AND TECHNICAL UNITS. The Commission shall appoint a Secretary who must be elected by the Commission and shall also have the administrative and technical units that it requires for the exercise of its functions. Its internal organization shall be regulated by a Regulation.

FUNCTIONS. The Commission has the following functions:

• 1)

  To issue opinions or recommendations in cases in which it deems appropriate or when requested, regarding draft laws, regulations, decrees or executive agreements, resolutions, agreements, agreements, international treaties and other acts of the Public Administration that are related to this law;

• 2)

  To investigate the existence of practices or conduct prohibited by this law and take the necessary measures so that these practices or conduct cease, without prejudice to applying the corresponding sanctions;

• 3)

  To verify and investigate economic concentrations to determine their compatibility with this law and when it is one of the prohibited ones, to issue measures in accordance with Article 19 of this law;

• 4)

  To issue provisional measures to prevent the harmful effects of acts and practices incompatible with this law;

• 5)

  To hold hearings with the participation of the presumed responsible parties, witnesses and experts;

• 6)

  To issue the provisions and norms that are pertinent for the application of this law;

• 7)

  To disseminate throughout the national territory the subject matter of this law, through information campaigns;

• 8)

  To conduct studies related to the structure and behavior of the market;

• 9)

  To issue an opinion on the matters of its competence, when so required by judicial or administrative authorities;

• 10)

  To define the mechanisms of internal organization for the functioning of the Commission; and,

• 11)

  All other powers that this law assigns to it.

ASSISTANCE. For the performance of its functions, the Commission shall have the assistance of the Public Ministry, of the Secretariat of State in the Office of Security, of the municipal corporations and of the public and private law institutions. Whoever disregards this provision shall incur in the responsibility that corresponds under law.

ADMINISTRATIVE SANCTIONS. Without prejudice to the criminal or civil actions that correspond, infractions to the precepts of this law and its regulations must be sanctioned administratively by the Commission, in accordance with the procedures provided for in the same and other applicable provisions.

PENALTY FINES. For the practices or conduct prohibited in Articles 5 and 7 of this law, the Commission shall impose by reasoned resolution and taking into consideration the criteria of Article 39, a fine per economic agent equivalent to three (3) times the amount of the economic benefit obtained. In case it is not possible to determine the amount of this benefit, the Commission shall fix a fine that in no case may exceed ten percent (10%) of the gross profit on sales of the preceding fiscal year. In case of late notification of a concentration operation, failure to deliver or delay in the delivery of information requested by the Commission, a fine equal to that established in Article 41 shall be applied to the offender. Without prejudice to the imposition of the fines referred to in this article, the Commission shall order the cessation of the practices or conduct prohibited by this law. The Regulation of this law shall establish different degrees in the application of these penalties, taking into consideration the gravity of the conduct and the other parameters established in Article 39 of this law.

RECIDIVISM. In case of recidivism, the Commission shall impose double the last fine that it had imposed in accordance with Article 35.

DETERMINING THE AMOUNT OF THE FINE. To determine the amount of the fine that must be imposed in each case, the Commission shall take into account the gravity of the offense, the repeated infractions of this law, the modality and scope of the restriction of free competition or the damage and harm to consumers, the dimension of the affected market, the duration of the infraction and other similar factors.

PROVISIONAL MEASURES. At any moment in the investigation process, if the Commission deems it necessary to prevent serious and irreparable harm to the free competition process or serious damages to consumers, it may apply provisional measures so that the acts that it considers violatory to this law and its regulations cease, provided that there is evidence and it is stated in the reasoned resolution. The provisional measures adopted must be proportional to the correction that is sought. Any resolution adopted in application of this article shall be applicable during a period determined by the Commission and may be extended, as long as it is necessary and appropriate.

SUCCESSIVE FINES. The Commission, by means of a reasoned resolution, may apply successive sanctions to economic agents and associations of economic agents from One Thousand Lempiras (L. 1,000.00) to Fifty Thousand Lempiras exactly (L. 50,000.00) for each day of delay in compliance with what is ordered in the resolution, up to a maximum of thirty (30) calendar days, counted from the date on which notification of the resolution was made, in order to:

• 1)

  Put an end to the practices or conduct that violate the provisions of this law and its regulations;

• 2)

  Comply with provisional and precautionary measures imposed; and,

• 3)

  Comply with the corrective measures applicable to an act of economic concentration or the order of partial or total deconcentration.

SUMMONSES. The Commission shall issue summonses to economic agents, indicating the place, date, time, and purpose of the proceeding. In case of non-attendance at the first summons, the Commission shall impose a fine of Ten Thousand Lempiras (L. 10,000.00) to Fifteen Thousand Lempiras exactly (L. 15,000.00). The Commission shall issue a second summons five (5) calendar days after non-compliance with the first. In case of non-attendance at the second summons, it shall be considered as disobedience and sanctioned in accordance with Article 346 of the Penal Code.

ADJUSTMENT FOR INFLATION. To maintain their constant value, the amount of fines must be adjusted during the first quarter of each year in accordance with the official data of the Consumer Price Index corresponding to the immediately preceding year published by the Central Bank of Honduras.

PAYMENT OF THE FINE. Once the administrative proceeding has been exhausted and the fine resolution has been declared final, it must be paid to the General Treasury of the Republic or to an authorized collector within a period not exceeding five (5) business days counted from the date of the resolution. Fines not paid within the established period shall accrue default interest at the highest average active rate of the banking system, published by the Central Bank of Honduras. If there were an appeal concerning the sanction and a judicial decision were rendered that revoked the Commission's decision because it is determined that the imposed sanction is not adjusted to the infraction committed, then the paid fine must be reimbursed in whole or in part, as determined by the judicial sentence. In this case, the portion that is returned shall be increased with default interest at the average active rate published by the Central Bank of Honduras from the date of payment.

REMEDIES. Against resolutions issued by the Commission, the remedy of reconsideration is available. With this remedy, the administrative proceeding is exhausted. Once the administrative proceeding has been exhausted against the Commission's decisions, the remedy before the jurisdiction of Administrative Litigation is available.

REQUEST FOR INFORMATION. The Commission, in the exercise of its powers and in order to investigate the conduct of economic agents in the market, is empowered to request the necessary documents and information in writing, indicating the legal grounds. The request shall be made through available means of communication to the address that the person involved has registered in public directories. Owners and legal representatives of economic agents are obligated to provide the requested information. If an economic agent does not provide the information requested within the period set by the Commission or provides it incompletely, the Commission shall demand it by means of a resolution. In this resolution, it shall specify the documents and information it deems necessary, set an appropriate period for their submission, and indicate the sanctions provided in the following paragraph of this article. In the event that the information is not supplied or is presented incompletely or inaccurately, deliberately or through negligence, the Commission may impose fines of up to Fifty Thousand Lempiras (L. 50,000.00).

INVESTIGATIONS AND INSPECTIONS ON THE PREMISES. When there are rational indications of a violation of the provisions of this law and its regulations, the officials and employees designated by the Commission with the appropriate authorization may conduct investigations at the establishments indicated in the same authorization, without prior notification. In this case, the economic agents involved are obligated to permit free access to the establishment and place at the disposal of the investigating commission all documents to conduct the investigation.

INVESTIGATION OR INSPECTION REPORT. The reports drawn up by the officials and employees of the Commission regarding the establishments shall have full validity and evidentiary force for the purposes of the resolutions issued by the Commission and must be signed by the natural person or the legal representative of the investigated legal person and by the official or employee who conducted the investigation or inspection. If the investigated party refuses or is unable to sign, such circumstance shall be noted in the report.

INITIATION OF PROCEEDING. The proceeding to sanction the prohibited practices, acts, or conduct in accordance with Title III of this law shall be initiated ex officio or at the instance of a party, which must accompany information or indicate the place where the pertinent documentation is located that substantiates the reported facts. To initiate the proceeding at the instance of a party, the complainant must document the complaint and shall be subject to the provisions of Article 58 of this Law.

PROCEDURE TO SANCTION PROHIBITED PRACTICES, ACTS, AND CONDUCT. To determine whether a practice, act, or conduct is prohibited, the Commission shall follow the following procedure:

• 1)

  When there are sufficient indications to estimate that it is a prohibited practice, act, or conduct, the Commission shall formulate a statement of charges in which the imputed facts shall be set forth and shall notify the legal representatives of the economic agents or the association of economic agents involved, granting them a maximum period of thirty (30) business days to respond and to propose evidence and other defenses in the same response document;

• 2)

  If the charges formulated are accepted, the proceeding shall proceed with respect to the person involved without any further formality other than the imposition of the corresponding administrative sanction;

• 3)

  The Commission shall give to the economic agents or to the association that had requested it in their written observations, the opportunity to verbally develop their points of view, if they had accredited a demonstrable interest to these effects or if the Commission were to propose to impose a fine or a cessation order;

• 4)

  The Commission shall summon the persons who must be heard. The summons shall be made to the economic agent or to the association of economic agents by means of a summons that shall be delivered to the principal office that operates in the country. The summons shall contain the reason for which the summons is made, the place, day, and time when the summoned party must appear, and the legal basis;

• 5)

  Hearings shall be conducted by personnel of the administrative unit of the Commission designated by it for these purposes;

• 6)

  Natural persons summoned shall appear in person and legal persons by means of their legal representatives;

• 7)

  Persons who are summoned may be accompanied by their legal representatives;

• 8)

  The statements of each person heard shall be recorded in a report to which that person shall give their approval after having read it;

• 9)

  If the Commission concludes, at the end of the administrative proceeding, that there is a prohibited practice or conduct, it must, by means of a reasoned resolution, require the economic agents or the association of economic agents involved to cease or desist from the practices that gave rise to the infraction and apply the corresponding sanctions;

• 10)

  The resolution shall be notified to the economic agents involved or to the association of economic agents involved and shall be made public by means of notice in two (2) newspapers of greatest circulation in the country; and,

• 11)

  In no case shall the proceeding take more than six (6) months counted from the formulation of the statement of charges indicated in numeral 1) of this article.

ACCEPTANCE OF CHARGES. At any time during the proceeding before the resolution is issued, the economic agent or the association of economic agents may request that the Commission accept the charges as accepted and impose the corresponding fine, in which case it shall be reduced by one-third of what would have been applied in case of not accepting it. The foregoing shall not be applicable in the cases referred to in Article 38 of this law.

INFORMATION. To make possible a prior verification of an economic concentration, the economic agents involved shall provide the Commission with the following information:

• 1)

  General information regarding the economic agents that notify the concentration and those that participate in it directly;

• 2)

  Financial statements of the economic agents for the fiscal year of the preceding year, certified by an authorized public accountant;

• 3)

  Description of the economic concentration, its objectives and type of operation, copy of the pre-contract project that shall regulate the relationship in question;

• 4)

  Description of the principal goods or services that each economic agent involved produces or offers, the list of substitute goods or services of the principal economic agents not involved that produce or commercialize them in the territory of the Republic of Honduras, as well as their data on market participation; and,

• 5)

  Any other information determined by the Commission by means of regulation or resolution.

PRIOR VERIFICATION PROCEDURE. In all cases in which the Commission is required to determine regarding the project of economic concentration provided for in Article 13, the following procedure shall be followed:

• 1)

  The economic agent involved shall make the request for an opinion regarding the concentration project in accordance with the terms of the preceding Article 52;

• 2)

  The Commission may require additional data or documents, within ten (10) business days following receipt of the request; and,

• 3)

  From the date of receipt of the request or, in the event that additional data or information has been required, from the date on which all additional data and documents are received to the satisfaction of the Commission, the Commission shall have a period of forty-five (45) business days to issue the respective resolution; if this period expires without such resolution having been issued, the proposed economic concentration shall be understood as approved and may be carried out.

PROHIBITION, CORRECTIVE MEASURES, AND DECONCENTRATION. In the event that the Commission prohibits an economic concentration and dictates corrective measures, it must do so by means of a reasoned resolution, adhering to the following rules:

• 1)

  In the event that the Commission determines the existence of an unlawful situation, it must notify it in writing within the forty-five (45) business days available to issue its resolution. The notification shall include, if any, the corresponding corrective measures. The economic agent shall be granted a period not exceeding fifteen (15) business days, in accordance with the importance of the matter, to present its observations and proposals in writing so that they are adjusted to this law;

• 2)

  Upon receipt of the document containing the observations and proposals, the Commission shall have fifteen (15) business days, counted from receipt of said document, to issue the final resolution; and,

• 3)

  Notwithstanding what is provided in numeral 2) of this article, the Commission may prohibit the concentration or impose corrective measures by means of a resolution, if the investigated concentration is of such a nature that immediate intervention would be appropriate to prevent significant deterioration to the free competition process.

PROCEDURE TO ISSUE PROVISIONAL MEASURES. The Commission may issue provisional measures subject to the following rules:

• 1)

  Before issuing provisional measures, written notice must be given to the economic agent involved in the alleged violation of the Commission's intention to issue them, granting a period of ten (10) business days to present its defenses in writing;

• 2)

  The notification shall be delivered to the legal representative of the economic agent involved, its legal representative, or the manager. If this does not occur, it shall be communicated by means of notice published in a newspaper of national circulation; and,

• 3)

  In any case, provisional measures shall be ordered by means of a reasoned resolution that must be notified to the economic agent involved.

PUBLICITY. Once final, the Commission shall make its resolutions public by the means it deems appropriate. Likewise, when the Commission deems it to be of general interest, it may publish the resolutions, opinions or recommendations issued in accordance with Articles 32 and 37 and the precautionary and provisional measures adopted pursuant to Articles 17 and 40. TITLE VIII FINAL PROVISIONS CHAPTER I GENERAL PROVISIONS

STATUTE OF LIMITATIONS. The actions to impose fines and to exercise the other powers of the Commission shall prescribe: No. 30,920 2) In five (5) years for exercising actions arising from the provisions of this law. The period of limitation shall begin to run from the day on which the violation was committed. However, with respect to continuous or successive infractions, the statute of limitations shall begin to run from the day on which the prohibited conduct ceased. The statute of limitations regarding the imposition of sanctioning or successive fines shall be interrupted one time only by any act of the Commission intended to investigate the corresponding violation.

DAMAGES AND LOSSES. In all cases in which the prohibitions included in this law and its regulations are infringed, those affected may, through civil action, claim damages and losses. Both the resolutions of the Commission and the Judgments of the Administrative Contentious Courts that determine, in a final manner, that an economic agent has infringed one of the prohibitions included in this law, shall serve as evidence against such economic agent in the proceedings that third parties initiate to obtain compensation for damages and losses.

IMPLEMENTING REGULATIONS. The Commission may adopt all measures that are relevant to the application of this law. CHAPTER II ENTRY INTO FORCE AND TRANSITIONAL PROVISIONS

REPEALS. This law repeals: 1) Articles 422, 423, 424 and 425-III (a) of the Commercial Code; and, 2) All other legal provisions that are contrary to what is provided in this law.

REPUBLIC OF HONDURAS - TEGUCIGALPA M.D.C. FEBRUARY 4, 2006 No. 30,920

SELECTION AND TERM OF COMMISSIONERS. What is established in Article 24 of this law shall be governed in accordance with the following system: The list of Candidates that the National Congress shall review and select shall come from the following Organizations or Institutions:

• 1)

  Three (3) candidates proposed by the Honduran Council of Private Enterprise (COHEP);

• 2)

  Three (3) candidates proposed by the National Forum for Convergence (FONAC);

• 3)

  Three (3) candidates proposed by the National Commission for Competitiveness;

• 4)

  Three (3) candidates proposed by the Executive Branch; and,

• 5)

  Three (3) candidates proposed by the Federation of University Professional Colleges of Honduras (FECOPRUH). The election of the three (3) Commissioners by the National Congress shall be by qualified majority of two-thirds for a period of seven (7) years.

TEMPORAL EFFECTS. The provisions of this law concerning the verification and investigation of economic concentrations shall apply only to concentrations that occur or take place after the entry into force of this Law. During the six (6) months following the entry into force of this law, the prohibitions of Title IV, Chapter I of this law shall not be applicable to contracts, agreements, practices, combinations, arrangements or conduct that are in effect at the entry into force of this law. In the event that they continue in effect after this period of six (6) months, this law shall apply entirely to them from its entry into force.

ASSETS AND BUDGET OF THE COMMISSION. The budget of the Commission shall be formulated by it and its project approved by the Executive Branch and subsequently submitted to the National Congress for its discussion and final approval, through the corresponding legal channel.

ELECTION OF COMMISSIONERS. The National Congress in accordance with Articles 24 and 61 of this law shall elect the first Commission for Defense and Promotion of Competition within the first thirty (30) days following its entry into force. The elected commissioners shall have a period not to exceed one hundred twenty (120) calendar days from the date of their swearing in to put into operation the operative organization of the Commission.

ENTRY INTO FORCE. This Decree shall enter into force as of the day of its publication in the Official Gazette La Gaceta. Given in the city of Tegucigalpa, Municipality of the Central District, in the Hall of Sessions of the National Congress, on the sixteenth day of the month of December of two thousand five. PORFIRIO LOBO SOSA PRESIDENT JUAN ORLANDO HERNÁNDEZ A. SECRETARY GILLIAM GUIFARRRO MONTES DE OCA SECRETARY To the Executive Branch Therefore, Let It Be Executed. Tegucigalpa, M.D.C., December 29, 2005. RICARDO MADURO PRESIDENT OF THE REPUBLIC THE SECRETARY OF STATE IN THE OFFICE OF INDUSTRY AND COMMERCE IRVING GUERRERO