Decree 51-2014 Reform of the Law Against the Crime of Money Laundering and Others

Reform Articles 15, 17, 18, 20, 21, 22 and 23 of the LAW AGAINST THE CRIME OF MONEY LAUNDERING, contained in Decree No. 45-2002 of March 7, 2002, which shall hereafter be read as follows: "ARTICLE 15. ADMISSIBILITY OF PRECAUTIONARY MEASURES. When the Competent Judicial Body or the Public Ministry, as the case may be, becomes aware of any of the facts constituting the crime of money laundering, it shall issue immediately without any delay, without notice or prior hearings, the precautionary, cautionary or protective measure provided for in National Legislation, for the purpose of preserving the availability of assets, products or instruments related to the crime of money laundering. If the precautionary or cautionary measure is issued by the Public Ministry, it shall inform the Competent Judicial Body thereof within seventy-two (72) hours following, explaining the reasons that determined it. The Competent Judicial Body in a reasoned order shall ratify or annul in whole or in part the actions taken."

CASES OF REVOCATION OF PRECAUTIONARY MEASURES. The Competent Judicial Body, at the petition of any of the parties, shall revoke the precautionary, cautionary or protective measures and shall return to the claimant the assets, products or instruments when any of the following circumstances concur:

• 1)

  The claimant proves the legal origin and legitimate interest in the assets, products or instruments;

• 2)

  No type of participation in the crime that is the subject of the proceeding can be imputed to the claimant;

• 3)

  The claimant is unaware, without having been negligent, of the illegal use of assets, products or instruments, or when having knowledge thereof, did not voluntarily consent to their illegal use;

• 4)

  The claimant has not acquired any right over the assets, products or instruments of the person prosecuted in circumstances that reasonably lead to establishing that the right over them would have been transferred for the purpose of avoiding the imposition of precautionary measures or forfeiture; and,

• 5)

  The claimant did everything necessary to prevent the illegal use of the assets, products or instruments. The Competent Judicial Body may also revoke the precautionary, cautionary or protective measures in the judgment, without prejudice to the provisions of Article 11 of the Law on Definitive Deprivation of Domain of Assets of Illicit Origin, contained in Decree No. 27-2010, in the judgment issued against the person charged.

EXECUTION OF PRECAUTIONARY MEASURES. For purposes of their applicability and effectiveness, the precautionary, cautionary or protective measures that are issued shall be communicated by any means to the Institution where they must be executed. The competent authority must submit the written request within twenty-four (24) hours following, when by reason of urgency the requirement was made in a manner other than written. The institutions obligated to execute the registration of the measures shall immediately proceed to execute them in those cases where the assets, companies or their owners are fully identified and, if not, prior to identification, shall carry out all necessary measures to ensure the availability of the assets, products or instruments that appear in the name of the persons described in the protective order. In the records of immovable and mercantile property, as well as in other public or private institutions that must execute the measures, no relation shall be alleged to delay or not carry out the measure. Any registration disregarding what is stipulated in this article shall be null and shall incur administrative, civil and criminal liability on the offender. In the event that the precautionary or cautionary measure falls upon financial products, it shall be made effective through the Compliance Units of the Supervised Institutions, without prejudice to it being executed through other officials of the same institution.

OFFICE FOR THE ADMINISTRATION OF SEIZED ASSETS (OABI). The Office for the Administration of Seized Assets (OABI) is hereby created as a Body attached to the Office of the President, with its own legal personality, enjoying technical, administrative and financial autonomy for the direct management of the matters entrusted to it by Law; being constituted as a specialized technical body for the proper safekeeping, custody and administration of seized, forfeited or abandoned assets, which the competent authority places at its disposal. For the safekeeping and administration of cash assets or those referred to in the preceding paragraph, the Office for the Administration of Seized Assets (OABI) shall make deposits in special accounts opened for such purpose in any institution of the National Financial System, in accordance with the Regulation on Administration of Seized and Forfeited Assets to be issued by the President of the Republic. For the safekeeping and administration of cash assets or those referred to in the preceding paragraph, the Office for the Administration of Seized Assets (OABI) shall make deposits in special accounts opened for such purpose in any institution of the National Financial System, in accordance with the Regulation on Administration of Seized and Forfeited Assets to be issued by the President of the Republic. If, after holding the sale or auction hearing, no bids are presented or for any other reason the sale does not take place, the Office for the Administration of Seized Assets (OABI) shall donate the proceeds to a public or private charitable institution. The Regulation on Administration of Seized or Forfeited Assets, to be issued by the President of the Republic, shall regulate matters related to the auction, sale or donation established in this Article. A report of all actions taken shall be submitted to the Competent Judge and the Public Ministry.

ASSETS SUSCEPTIBLE TO DETERIORATION OR COSTLY ADMINISTRATION. When the precautionary or cautionary measure falls upon assets that run the risk of perishing, being lost, depreciating, devaluing, whose administration would cause harm or disproportionate cost to the State at the time of returning them, if applicable, or that are projected to be unsaleable when the final judgment is rendered, these may be sold, auctioned or sold in advance by the Office for the Administration of Seized Assets (OABI) seeking to maintain their productivity. The same shall apply when it concerns movable property or other animals. All of the foregoing without prejudice to the corresponding appraisal that must be conducted by the General Directorate of National Assets or any other competent entity depending on the asset to be auctioned. If, after holding the sale or auction hearing, no bids are presented or for any other reason the sale does not take place, the Office for the Administration of Seized Assets (OABI) shall donate the proceeds to a public or private charitable institution. The Regulation on Administration of Seized or Forfeited Assets, to be issued by the President of the Republic, shall regulate matters related to the auction, sale or donation established in this Article. A report of all actions taken shall be submitted to the Competent Judge and the Public Ministry." "ARTICLE 23. DISTRIBUTION OF ASSETS DECLARED IN FORFEITURE. Upon conclusion of the criminal proceeding, when the judgment becomes final and orders the penalty of forfeiture, for purposes of distribution, the provisions of reformed Article 78 of the Law on Definitive Deprivation of Domain of Assets of Illicit Origin, contained in Decree No. 27-2010, shall be followed.

Add to the LAW AGAINST THE CRIME OF MONEY LAUNDERING, contained in Decree No. 45-2002 dated March 7, 2002, Articles 15-A, 15-B, 18-A, 20-A, 20-B and 23-A, which shall hereafter be read as follows: "ARTICLE 15-A. NOTICE OF PRECAUTIONARY MEASURES. The precautionary, cautionary or protective measures, once executed, shall be communicated, by any means, to the affected party or their legal representative, if possible. Failing that, communication shall be made through publication one time only, in a newspaper of national circulation and in a media outlet with national coverage. The term indicated in Article 22 to initiate the forfeiture or abandonment declaration proceeding shall not begin to run until the day following communication." "ARTICLE 15-B. DURATION OF PRECAUTIONARY MEASURES. Once twenty-four (24) months have elapsed after the precautionary, cautionary or protective measures are issued and executed, in which the Public Ministry has exercised public criminal action, these shall be revoked. The term indicated in this Article may be extended by judicial authorization for a period of twelve (12) months for one time only and shall commence counting from the registration in the corresponding registry. The extension must be based on concrete facts to be investigated, and the judicial body must issue a reasoned order expressing the reasons for which it is granted and establishing the exact term for which it is granted." "ARTICLE 18-A. PROVISIONAL USE OF SEIZED ASSETS ADMINISTERED. In cases of assets, products, instruments or earnings that are being administered by the Office for the Administration of Seized Assets (OABI) and a final judgment or resolution defining their legal status has not been issued, it, prior to authorization from the Office of the President or the National Council for Defense and Security (CNDS) when this matter is submitted to its jurisdiction, must approve the subscription of provisional use agreements for the seized assets. The Office for the Administration of Seized Assets (OABI), in compliance with the corresponding Agreements, shall assign the assets for provisional use provided that, with sufficient advance notice, the documentation proving the insurance contract against damages, fire or other losses is presented. The insurance shall have the purpose of guaranteeing reimbursement for deterioration or destruction, when the characteristics and value of the asset so warrant. The expenses incurred for the contracting of the insurance policy, maintenance, operation and others shall be paid by the institution or body to which the assets are assigned; for which budget provisions must be made in each fiscal year for compliance with this provision."

DESTINATION OF ASSETS WITH PRECAUTIONARY MEASURE. Once the assets, products or instruments on which a precautionary, cautionary or protective measure falls are determined, in the case that seizure of the same is necessary, the competent body shall immediately proceed to place them at the disposal of the Office for the Administration of Seized Assets (OABI), for its administration, safekeeping, custody or destruction, as the case may be.

THE COLLEGIATE DECISION-MAKING BODY. The National Council for Defense and Security (CNDS) shall be the collegiate body of maximum decision regarding the administration of seized and forfeited assets, for which purpose the Office for the Administration of Seized Assets (OABI) through its Executive Director must submit a quarterly report regarding the assets and monies declared in forfeiture, as well as the seized assets." "ARTICLE 23-A. RETURN OF ASSETS. The Office for the Administration of Seized Assets (OABI), prior to judgment or resolution of the Competent Judicial Body or the Public Ministry, as the case may be, shall proceed to return the assets, products or instruments that are under its safekeeping, custody or administration in the same condition in which they were found at the time of intervention, except for those deteriorations occurring due to the passage of time or that are not attributable to the OABI. In the case of cash money, the return shall include the principal plus interest calculated at the average training rate of the national financial system registered by the Central Bank of Honduras in the month prior to return, the interest generated in addition to this rate shall be in favor of the OABI as a percentage of administration expenses. The return ordered by the competent judicial body shall be of immediate execution.

REFORMS TO THE LAW ON DEFINITIVE DEPRIVATION OF DOMAIN OF ASSETS OF ILLICIT ORIGIN. Reform Articles 69, 70, 71, 72, 73, 75, 76, 77 and 78 of the LAW ON DEFINITIVE DEPRIVATION OF DOMAIN OF ASSETS OF ILLICIT ORIGIN, contained in Decree No. 27-2010 dated May 18, 2010 and published in "La Gaceta", Official Gazette of the Republic dated June 16, 2010, amended by Legislative Decrees Numbers: 153-2010, 258-2011, 91-2012 dated September 9, 2010, December 14, 2011 and July 6, 2012 respectively, which shall hereafter be read as follows: "ARTICLE 69. JUDGMENT DECLARING THE ACTION INADMISSIBLE.- If in the final judgment it is declared that the definitive deprivation of domain does not proceed, the precautionary, cautionary or protective measures that may have been issued shall be revoked and their immediate return shall be ordered. If it is cash money, the return shall be made in the terms established in the fifth paragraph of Article 70 of this Law." "ARTICLE 70. ADMINISTRATION, SAFEKEEPING AND CUSTODY OF ASSETS. The assets on which a cautionary or protective measure falls shall be immediately placed at the disposal of the Office for the Administration of Seized Assets (OABI), which shall proceed to their receipt, registration, maintenance, administration, safekeeping and custody or destruction when necessary, in accordance with what is established in the Regulation on Administration of Seized and Forfeited Assets. Cash money seized shall be deposited immediately by the Competent Judicial Body or the Public Ministry in bank accounts in favor of the OABI, without prejudice to what is established in the last paragraph of this Article. The Office for the Administration of Seized Assets (OABI), for the administration of cash money, securities, monetary resources and others, opens accounts in institutions of the National Financial System, handling for such purpose separate accounts for those subject to precautionary measures and others on which a final judgment of deprivation of domain has fallen. In these accounts shall also be deposited monetary resources and securities derived from sales of perishable goods and movable property and those obtained from the sale or early alienation of assets, as appropriate. The capital and earnings generated in these accounts shall be distributed according to this Law, in case a judgment of deprivation of domain is rendered. In case of return, it shall include interest calculated from the date the funds entered the Office for the Administration of Seized Assets (OABI), until one business day prior to delivery at the average interest rate of training of the financial system registered by the Central Bank of Honduras (BCH) in the month prior to return, the interest generated in addition to this rate shall be in favor of the OABI as a percentage of administration expenses. Seized assets, movable and immovable, shall be administered in accordance with what is established in the Regulation on Administration of Seized and Forfeited Assets, which shall be exempt from the procedures of the State Procurement Law for their management and shall be supplied through a special substitute procedure that is more expeditious and effective for procurement, which shall be authorized by the Normative Office of State Procurement and Acquisitions (ONCAE) and approved by the President of the Republic, through the Office of the President. In the case of assets that merit special care, such as automobiles, ships and aircraft, the OABI may use State facilities for their safekeeping and custody, without prejudice to the liability incurred by the Office for the Administration of Seized Assets (OABI) in its capacity as administrator of seized assets. When the assets that are the subject of an investigation for the crime of money laundering constitute evidence in the proceeding, the realization of the necessary anticipated evidence shall proceed obligatorily and immediately. The assets shall be preserved and safeguarded by the Public Ministry until the realization of the corresponding anticipated evidence. Upon conclusion of the immediate enactment of anticipated evidence, the Competent Judicial Body or the Public Ministry shall transfer them to the OABI for what corresponds in accordance with current regulations. Assets such as cash money, jewelry, securities and other assets of easy deterioration, the Judicial Body or the Public Ministry shall keep in its possession for a period not exceeding thirty (30) business days; without prejudice to the foregoing, samples thereof may be taken for the realization of the corresponding expert examinations. If the courts, Public Ministry or the General Prosecutor's Office, as the case may be, consider that the money may constitute evidence in the proceeding, it shall proceed obligatorily through institutions by means of records, photographs, videos or any other electronic means, which shall be used in place during the oral trial or at any other moment of the proceeding. The photographs, film recordings shall be packaged, labeled and shall be subjected to chain of custody. Without prejudice to the foregoing, samples thereof may be taken for the realization of the corresponding expert examinations; upon conclusion of the immediate enactment of anticipated evidence, the Competent Judicial Body or the Public Ministry shall deposit them in the accounts opened for such purpose by the Office for the Administration of Seized Assets (OABI) in the national financial system, for what corresponds in accordance with this Law."

ALIENATION, AUCTION OR EARLY SALE. When the precautionary or cautionary measure falls upon assets that run the risk of perishing, being lost, depreciating, devaluing, whose administration would cause harm or disproportionate cost to the State at the time of returning them, if applicable, or that are projected to be unsaleable when the final judgment is rendered," "ARTICLE 72. AUCTION, DONATION OR DESTRUCTION OF ASSETS IN STATE OF DETERIORATION. Assets whose definitive deprivation of domain has been declared and that are in a state of complete deterioration, which makes their repair or improvement impossible or excessively costly, the Office for the Administration of Seized Assets (OABI) through authorization of the National Council for Defense and Security (CNDS), must assign, auction, donate or destroy the assets, as appropriate. When it comes to movable assets that are in a state of complete deterioration, which makes their repair or improvement impossible or excessively costly, that present alterations in their identifications, the Office for the Administration of Seized Assets (OABI) shall only proceed to their destruction or donation. In the case of the auction of the assets, the product obtained from it shall be distributed in accordance with Article 78 of this Law." "ARTICLE 73. PROVISIONAL USE OF ADMINISTERED ASSETS. In cases of assets, products, instruments or earnings that are being administered by the Office for the Administration of Seized Assets (OABI) and a final judgment or resolution defining their legal status has not been issued, it, prior to authorization from the Office of the President or the National Council for Defense and Security (CNDS) when this matter is submitted to its jurisdiction, must approve the subscription of provisional use agreements for the seized assets. The Office for the Administration of Seized Assets (OABI), in compliance with the corresponding Agreements, shall assign the assets for provisional use provided that, with sufficient advance notice, the documentation proving the insurance contract against damages, fire or other losses is presented. The insurance shall have the purpose of guaranteeing reimbursement for deterioration or destruction, when the characteristics and value of the asset so warrant. It is understood that the expenses incurred for the contracting of the insurance policy, maintenance, operation and others shall be paid by the institution or body to which the assets are assigned; for which budget provisions must be made in each fiscal year for compliance with this provision. The procedure to be followed for the assignment and its compliance shall be made in accordance with the Regulation on Administration of Seized and Forfeited Assets. The authorization or delivery of provisional use without meeting the requirements shall give rise to the application of civil, administrative or criminal sanctions." "ARTICLE 75. DUTY OF THE OABI TO SUBMIT REPORTS. Without prejudice to submitting the reports requested by the National Council for Defense and Security (CNDS), Public Ministry through court agents and the Superior Court of Accounts or when requested by the competent Judicial Body directly, the Office for the Administration of Seized Assets (OABI) through its Executive Director must submit quarterly to the National Council for Defense and Security (CNDS), a detailed report on the management and monitoring of the assets under administration, as well as those proposals for management of the assets placed at the disposal of the Office for the Administration of Seized Assets (OABI)." "ARTICLE 76. AUCTION OR DONATION OF ASSETS DECLARED IN FORFEITURE OR SEIZURE. The assets, products, instruments or earnings on which a sentence declaring definitive deprivation of domain, forfeiture or seizure falls, prior to resolution of the National Council for Defense and Security (CNDS), shall be auctioned or may be donated to the following institutions, in the latter case prior consideration of their needs and the plan of use that they present for such purpose:

• a)

  To the OABI for the achievement of its objectives;

• b)

  Public Educational Centers;

• c)

  National Commission of Banking and Insurance, preferably to the Financial Intelligence Unit;

• d)

  National Directorate of Intelligence and Investigation, with special attention to its special units;

• e)

  Public Ministry, for the special units that combat organized crime;

• f)

  For projects for prevention or repression against illicit drug trafficking or organized crime;

• g)

  Judicial Branch, with special preference to the specialized jurisdictional bodies for deprivation of domain and the fight against organized crime;

• h)

  Office of the State Secretary of National Defense, specifically for the special units of the Armed Forces of Honduras that combat criminal organizations;

• i)

  Office of the State Secretary of Security, so that they are assigned to the units that participated in the investigation process; and, j) Any other agency authorized by the National Council for Defense and Security (CNDS). The decision on the auction or donation of the assets shall be taken by the National Council for Defense and Security (CNDS), which shall be subject to the provisions of the Regulation on Administration of Seized and Forfeited Assets." "ARTICLE 77. RECOGNITION OF RIGHTS. If in the process of definitive deprivation of domain, the Judge recognizes the rights of third parties acting in good faith, the return of the assets shall proceed at any stage of the proceeding. If it is cash money, the return shall be made in the terms established in the fifth paragraph of Article 70 of this Law. In cases where the Judge recognizes the rights of a lien creditor or mortgagee acting in good faith, at any stage of the proceeding, the Office for the Administration of Seized Assets (OABI) in accordance with its sustainability may deliver them in dation in payment or cancel the amount owed for the concept of liens or mortgages affecting the assets for an amount not exceeding the current value of the asset, in accordance with the respective appraisal. In this case, the OABI shall be subrogated in the rights of the creditor and shall continue with the custody and administration of the asset until the judgment ordering the definitive deprivation of the asset or its return, in which case prior to making it effective, the owner shall pay the OABI the amount paid for the lien or mortgage. In the case of the alienation, auction or early sale of assets, the credit shall be paid in the terms that the judicial authority determines and the proceeding shall continue in accordance with the last paragraph of Article 71 of this Law." "ARTICLE 78. DISTRIBUTION AND DESTINATION OF ASSETS DECLARED IN FORFEITURE. Once the judgment declaring the definitive deprivation of domain or seizure of the assets, products, instruments or earnings becomes final, the Office for the Administration of Seized Assets (OABI) prior to resolution of the National Council for Defense and Security (CNDS), shall proceed to the distribution of cash money, securities and financial products, plus the earnings, profits or interest that are at its disposal for having been seized, as well as that which has been deposited as a product of the auction of assets, early sales and others. The distribution shall be made following the following rules:

  • a)

    Forty-Five percent (45%) for the units, departments, programs or projects that directly work in the Security and Justice Sector;

  • b)

    Forty-Five percent (45%) for the units, departments, programs or projects that directly work in the Prevention Sector; and,

  • c)

    Ten percent (10%) to the Office for the Administration of Seized Assets (OABI) in support of and as a supplement to the budget for its operation, maintenance and compliance with its legal obligations. The funds assigned through the distribution described above may not be allocated to current expenses such as payment of debts, salaries, salary increases, rents for real estate, even if there are protocol or social services, articles of luxury or similar items or others similar; rather, they must be allocated solely to investment in the strengthening of the capacities and competencies inherent to each unit or department as the case may be, and must be used for the specific purposes enumerated in the corresponding beneficiary's provision. Notwithstanding the provisions of the preceding paragraph, the beneficiary institutions must present and justify in advance to the Office for the Administration of Seized Assets (OABI), for its corresponding approval, the planning and investment program for such resources prior to making the transfer in their favor. Said Institution is authorized to approve investments or use of these resources in cases not expressly provided for in this article or, as the case may be, deny the transfer of funds when it does not correspond to the purposes and investments to which the same must be directed in accordance with this Article. It is expressly prohibited that these resources be used for purposes other than those set forth in the paragraph preceding this last one, by any means or with coverage by any competent entity depending on the asset to be auctioned. All those immovable property assets that are transferred to institutions, especially private ones, cannot be sold to third parties.