Special Law for the Promotion of International Non-Governmental Development Organizations

This Law is of public order and social interest, having as its purpose:

• 1)

  To guarantee the enjoyment and exercise of the right of freedom of association, enshrined in the Constitution of the Republic and in international treaties in force for Honduras, so that persons may organize themselves in Non-Governmental Development Organizations (ONGD);

• 2)

  To promote legal security of Non-Governmental Development Organizations (ONGD) that allows for full potential realization of their activities; and,

• 3)

  To establish the rights and obligations of Non-Governmental Development Organizations (ONGD).

The civil society organizations subject to this Law are non-governmental development organizations, whether foundations or associations, nonprofit entities that meet the characteristics defined in this Law. The following are excluded from the scope of this Law: political parties, churches, sects, cooperatives, patronatos, unions, professional associations, associative enterprises that form part of the Social Sector of the Economy (SSE), trade associations, and others that do not comply with the provisions of this Law or are subject to special regulation.

For purposes of this Law, a Non-Governmental Development Organization (ONGD) shall be understood as: any entity of a private nature, apolitical in the party sense, nonprofit and without preponderantly trade union, labor, or religious objectives; with different objectives that contribute to the humanitarian and comprehensive development of the population and related objectives, defined by its members. They are created independently of local, regional, and national governments, as well as international bilateral or multilateral cooperation bodies.

Non-Governmental Development Organizations must maintain independence from the Government. Their collaboration with the State shall take into account public policies or strategies in development matters, under a framework of freedom and voluntariness, in activities that correspond to the purposes and objectives of each organization, through equitable and fair mechanisms. CHAPTER II REQUIREMENTS FOR OPERATION, CREATION, AND ORGANIZATION

The legal nature of ONGD has the following characteristics:

• 1)

  Nonprofit;

• 2)

  Constituted by legal entities of the first, second, or third degree;

• 3)

  With local, national, or international presence;

• 4)

  Act with respect to the Constitution of the Republic and other laws of the country;

• 5)

  Enjoy autonomy in the management of their activities and resources with no greater limitations than those established by this Law and their bylaws;

• 6)

  Act in accordance with the principles of participatory democracy in the internal sense, as well as in matters of transparency and accountability to their members and the general population; likewise, when they receive and manage public property or funds, they must render accounts before the competent body in accordance with what is established in Article 3, subsection 4), of the Law of Transparency and Access to Public Information; and, 7) That they promote economic, social, cultural, and environmental development, in the defense of human rights, guarantees, or any other matter linked to the development of the country, within the framework of applicable national legislation and within the framework of social development.

ONGD may be: NATIONAL: Once they have been constituted in the manner established by this Law and their corresponding registration has been carried out, from which point legal personality shall be understood to have been granted.

For their creation, national ONGD must comply with the following requirements:

• 1)

  When they are foundations, the founder or founders must constitute them in a public deed, in which the bylaws shall be incorporated;

• 2)

  When they are associations, the following shall be followed:

  • a)

    Be constituted with a minimum number of seven (7) founding members;

  • b)

    Their constitution shall be carried out at an Assembly whose holding must be recorded in the "Constitution Act"; and, c) Approve their bylaws in a general assembly.

• 3)

  Apply before the Executive Branch and obtain their legal personality, through the State Secretary in the Offices of Interior and Population.

International ONGD that wish to begin operations in Honduras may do so through a representative office, in activities similar to those authorized in the country of origin, requesting their incorporation before the State Secretary in the Offices of Interior and Population. These shall be governed as to their organization and operation according to the law applicable in the place of their constitution, without prejudice to the fact that their local operation, as well as their local and foreign officials, are subject to Honduran laws. International ONGD that request their incorporation in order to operate in Honduras must comply with the following requirements:

• 1)

  Attach the document that accredits their Legal Personality;

• 2)

  Prove that they are legally authorized to operate in the State of origin, attaching certification of the respective document;

• 3)

  Present certification of Bylaws;

• 4)

  Attach certification of the act appointing the governing body according to their Bylaws;

• 5)

  Present a Financial Statement for the current year and of their assets; and,

• 6)

  Prove the appointment of their representative in the country, who could be a national or foreign resident. All required documents must be presented properly legalized or apostilled and with official translation when it is a language other than Spanish. In case of copies, they must be properly authenticated.

In the case of not requiring a representative office in the country in accordance with their established purposes and objectives, they may enter into agreements or contracts with other ONGD or with public and private entities of the country, in order to strengthen ties of collaboration and/or specific support in the country and facilitate the fulfillment of their shared objectives. In this case, International ONGD shall execute their activities through the Entity with which they entered into the agreement and/or contract, without the need for incorporation, observing for this purpose the legal provisions in force in the country pertaining to the matters to which such agreements and contracts refer, which must be sent in copy, by the national entity to the State Secretary in the Offices of Interior and Population for their respective registration.

Any national or international ONGD that is incorporated by the competent authority shall be registered in the corresponding body of the State Secretary in the Offices of Interior and Population, as an indispensable requirement to operate in the country.

The State Secretary in the Offices of Interior and Population shall grant and/or recognize legal personality or incorporate, as the case may be, having complied with the requirements contained in Articles 6, 7, 8, and 9 of this Law and may refuse only in the following cases:

• 1)

  Non-compliance with the requirements of Articles 6, 7, 8, and 9;

• 2)

  If the bylaws and/or regulations contain provisions that violate the Constitution and other laws of the country; and,

• 3)

  If the organization attempted to register under the name or logo of another entity already registered.

Any ONGD may resort to administrative and/or judicial instances when, by virtue of a resolution issued by the competent authority, it considers its interests and rights affected.

National ONGD shall have the following minimum organization:

• 1)

  General Assembly of members or its equivalent governing body;

• 2)

  Board of Directors or its equivalent; and,

• 3)

  Supervision or oversight body and/or executive bodies, in accordance with their bylaws. The holder or holders of the body or person responsible for direction and supervision or oversight shall be elected in accordance with what is established in their Bylaws.

The name or denomination of each ONGD shall be determined freely by its interested members. The name or denomination, initials, and symbols of another organization duly registered in the corresponding Registry may not be used, nor others that may lead to confusion about its nature or that special laws reserve for certain legal entities. The address of each ONGD shall be that designated in their Bylaws, without prejudice to carrying out their activities throughout the national territory or abroad. CHAPTER III OF LEGAL CAPACITY, ASSETS, AND ADMINISTRATION

ONGD shall be subjects of rights and able to contract obligations, with no greater limitations than those imposed by the Constitution of the Republic, this Law, its Regulations, and their bylaws. They may exercise the actions that are appropriate before the Courts of the Republic, including arbitral courts. The holder of legal capacity shall exercise it and appear as determined by the Bylaws, holds the legal representation of the ONGD, or one to whom the latter has delegated in accordance with the same.

The assets of NGDOs may be constituted by:

• 1)

  The contributions of its members;

• 2)

  The property it acquires;

• 3)

  National and international donations;

• 4)

  Inheritances and bequests;

• 5)

  Resources generated by investments made and income from the provision of goods and services necessary for its self-sustainability; and,

• 6)

  Income derived from economic activities carried out as a means to achieve its objectives.

Every NGDO shall ensure that the goods and resources of its assets do not come from Money Laundering or any other illicit activity, a circumstance that may be verified by the State's regulatory or supervisory entity, in accordance with the appropriate limits recognized by national and international law for legal entities.

The assets of NGDOs belong exclusively to the organization; including its credits and debts. No one may dispose of, for personal use, the goods or resources that form part of the assets of any NGDO. On the goods and rights that constitute the assets of NGDOs, no liens or encumbrances of any kind may be placed without authorization from the body that, according to its bylaws, has competence to do so.

The funds that any State entity allocates to an NGDO registered in SIAFI shall be audited by the Ministry of Interior and Population, without prejudice to the authority that corresponds to the State's oversight bodies for their verification, according to the purpose for which they were granted.

NGDOs, in the exercise of their activities and pursuing the objectives for which they are established, may provide and offer the public goods and services. The surpluses obtained in these activities must be applied by NGDOs exclusively to the fulfillment of their social objectives. The aforementioned operations must comply with the applicable laws in financial and administrative matters.

NGDOs are obligated to maintain, in accordance with the country's Fiscal Year, updated accounting records according to national standards, which must be presented together with the activity report, within the first (2) months of the year, before the Ministry of Interior and Population. Said records must be recorded in books authorized by the competent authority, which shall always be available to its members and subject to the audits established by Law, its bylaws and regulations. International NGDOs shall do so only in relation to their activities in the country. CHAPTER IV PROHIBITIONS AND SANCTIONS

The directors and administrators of NGDOs may not participate in the deliberations or voting or decisions on matters that are of their personal interest or of their commercial or professional partners, their spouses, their household companions, or relatives within the fourth degree of consanguinity or second degree of affinity. Any decision adopted in violation of this provision shall be void when it favors the applicant, and the violators shall indemnify the organization for the damages and losses caused to it.

When members of the NGDO make decisions that violate this Law, its bylaws, or its regulations, they shall be sanctioned in accordance with what is established in the national laws applicable to the specific case. In any case, the guarantees of due process shall be respected.

NGDOs may not:

• 1)

  Distribute surpluses of any nature among its members or contributors;

• 2)

  Pay salaries or fees to the members or members of their governing bodies, taking advantage of their status as such;

• 3)

  Appoint as general directors, general managers and/or general administrators, those who are spouses or household companions, or relatives within the fourth degree of consanguinity or second degree of affinity, of the members of the Board of Directors;

• 4)

  Authorize the use of assets and resources received under any title to benefit, directly or indirectly, its directors, members or employees and the spouses, household companions of these, or their relatives, unless they are beneficiaries of the programs or projects of the respective NGDO;

• 5)

  Distribute resources or goods among its members, directors or employees, upon the dissolution and liquidation; and,

• 6)

  Place in the name of the directors, members or employees, goods or resources of the NGDO.

The Directors and other Representatives of NGDOs who violate the provisions of the preceding Article, upon verification of the fact by the competent body, shall vacate their offices by operation of law and shall immediately lose their membership, without prejudice to the responsibility that corresponds according to Law.

The legal personality or incorporation of NGDOs, as the case may be, shall be suspended or cancelled, according to the severity of the non-compliance, in the following cases:

• 1)

  When the organization has a membership inferior to the minimum number of members required by the highest governing body, as established in numeral 1) of Article 6 of this Law;

• 2)

  When an NGDO fails to submit the annual reports and Financial Statements that must be presented to the Ministry of Interior and Population for a period of two (2) consecutive years or more; and,

• 3)

  When the legal representatives of NGDOs perform in the name and on behalf of NGDOs, actions or omissions unlawful under national legislation, provided that it is proven that the action derived from instructions and/or decisions of the governing body competent to do so, according to the bylaws of each organization and its responsibility has been declared by a competent court. The foregoing shall be understood without prejudice to what is established in the Criminal Code and other laws regarding legal responsibility.

When any of the cases provided for in the preceding Article occurs, the Ministry of Interior and Population, ex officio or at the instance of a party, shall issue a resolution ordering the suspension or cancellation of the Legal Personality and the corresponding registration in the registry, as established in the Regulation of this Law. Once the administrative resolution that resolves the suspension or cancellation, as the case may be, of the respective NGDO is final and after exhausting administrative remedies, it may appeal to the competent judicial instance. The sanction of suspension or cancellation shall be commensurate with the severity of the offense.

The dissolution of an NGDO may be voluntary or forced.

In the case of voluntary dissolution, it shall be that which occurs in the cases provided for in its respective bylaws.

The cancellation of legal personality shall give rise to forced dissolution, following what is established in its bylaws.

In the event of dissolution, the assets and resources of the ONGD shall be allocated to institutions or related organizations, in accordance with what is established in their Bylaws.

ONGD may merge. Associative organizations, by the will of their members, and foundational organizations, through absorption. CHAPTER VII LIAISON COMMISSION

The Liaison Commission with the State is hereby created, whose purpose shall be to facilitate coordination between State Institutions and ONGD. The Liaison Commission shall be composed of four (4) representatives from the public sector and four (4) from ONGD. The Liaison Commission is composed of:

• 1)

  The Secretary of State in the Office of Social Development, or their representative, who shall preside;

• 2)

  The Secretary of State in the Office of Planning and External Cooperation or their representative;

• 3)

  The Secretary of State in the Office of Interior and Population or their representative;

• 4)

  The Secretary of State in the Office of Finance or their representative.

• 5)

  Four (4) principal representatives or their respective alternates from ONGD; and, The election of the representatives of ONGD shall be effected in an assembly convened for that purpose by the Secretary of State in the Office of Interior and Population. The Members referred to in numeral 5) shall serve for two (2) years. The Liaison Commission shall meet every four (4) months to evaluate coordination between the Public Sector and ONGD, to define the areas of coordination and subject matter in which they shall participate in the development of the country. CHAPTER VIII TRANSITORY PROVISIONS

The Regulations of this Law shall be issued by the Secretary of State in the Office of Interior and Population, within six (6) months following its entry into force, seeking discussion and consensus with the different ONGD.

National and international ONGD operating in the country must regularize their operations and adjust their bylaws to what is stipulated in this Law, in cases where applicable; within a period of one (1) year from the entry into force of this Law.

This Law shall enter into force twenty (20) days after its publication in the Official Gazette La Gaceta. Given in the city of Tegucigalpa, municipality of the Central District, in the Session Hall of the National Congress, on the fifth day of the month of April of two thousand eleven. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT RIGOBERTO CHANG CASTILLO SECRETARY GLADIS AURORA LÓPEZ CALDERÓN SECRETARY To the Executive Power. Therefore: Execute. Tegucigalpa, M.D.C., April 25, 2011. PORFIRIO LOBO SOSA PRESIDENT OF THE REPUBLIC The Secretary of State in the Office of Interior and Population CARLOS ÁFRICO MADRID HART Legislative Power DECREE No. 78-2011 The National Congress: WHEREAS: In accordance with the General Law of Public Administration, the Secretaries of State as well as their Undersecretaries are organs of the Public Administration that report directly to the President of the Republic. WHEREAS: In order to achieve compliance with the public policies executed by the Central Government, and to align with social changes, it is necessary to create new State organs that assist in the tasks that correspond to each of the Secretaries of State. WHEREAS: It is the responsibility of the National Congress to create, decree, reform, interpret, and repeal laws. THEREFORE, IT DECREES:

To reform by addition to Decree No. 177-2010 dated September 30 of the year 2010, which in turn reforms Articles 28 and 29 of the GENERAL LAW OF PUBLIC ADMINISTRATION, adding to it ARTICLE 4-A, which shall read as follows: