Regulations on Prevention of Misuse of Financial Products

This Regulation has as its objective to establish general guidelines for institutions supervised by the National Commission of Banks and Insurance and Other Obligated Parties to implement the organization, policies, specific procedures and methodologies for the identification and documentation of financial transactions, as well as to maintain in confidentiality and updating of banking and related transactions, in order to prevent and detect the execution of suspicious operations in the crime of asset laundering.

BCH: Central Bank of Honduras. Commission or CNBS: National Commission of Banks and Insurance. Supervised Institutions: Those institutions that are under the supervision, surveillance and control of the National Commission of Banks and Insurance, such as: banking institutions, public or private, insurance companies, reinsurers, financial companies, savings and loan associations, general deposit warehouses, stock exchanges, brokerage offices or brokerage houses. Exchange rate, pension funds and social security institutions; public and private administrators of pensions and retirement benefits and any others that perform functions analogous to those mentioned above. Asset Laundering: Activity aimed at legitimizing income or assets derived, directly or indirectly, from the crimes of drug trafficking, trafficking of influence, illegal arms trafficking, trafficking of human organs, theft or robbery of vehicles or automobiles, robbery or financial fraud in public or private activities, kidnapping, terrorism and related crimes or that do not have legal cause or justification economic justification for their origin. Law: Law Against the Crime of Asset Laundering, contained in Decree 45-2003 dated March 3, 2003. Other Obligated Parties: Natural or legal persons, regular or irregular, not supervised by the Commission that perform the activities described in Article 41 of the Law. Superintendencies: Superintendency of Compliance and Special Regimes. Atypical Transaction: That operation which is not consistent with the profile previously determined for the client, which is not related to the economic activity and which is outside the normal parameters previously established for a determined range of interest or that could lead to think that the client is developing an activity not known by the supervised institution. UIF: Financial Information Unit. Shell Bank or Phantom Bank: Those institutions that do not have physical presence or do not have a physical address and normally only have an electronic address, in addition they operate without proper authorization to perform banking activity and are not subject to supervision by the controlling entities.

This Regulation is of mandatory application for all supervised institutions and other obligated parties in accordance with what is established in the Law.

The Commission within its supervision plans shall include procedures aimed at verifying compliance with the Law and this Regulation by supervised institutions and other obligated parties.

All supervised institutions shall have a compliance program of the Law. The organization, structure and functioning thereof shall be in conformity with what is established in this Regulation. Likewise, it shall periodically assess the effectiveness of its compliance program and shall implement corrections in case their implementation is justified in accordance with what is established derived from changes in Honduran legislation, regulatory or respective policies. CHAPTER II ORGANIZATION OF THE UNIT FOR THE PREVENTION AND DETECTION OF THE CRIME OF ASSET LAUNDERING

The institutions supervised by the Commission shall appoint a Compliance Manager and organize a Compliance Committee to recommend measures aimed at the prevention and detection of asset laundering. The designation of the Committee and of the Compliance Manager does not exempt the entity nor the other officials and employees from the obligation to present, detect and immediately report atypical transactions.

This Committee shall have as its main activities and responsibilities the following: a) Evaluate the development of the Compliance Program b) Analyze unusual transactions detected to determine their atypicality and send the respective report to the UIF. c) Keep the Board of Directors, Presidency and General Management informed about changes in national legislation and in international standards related to the crime of asset laundering. d) Know about Reports of Cash Transactions and Multiple Non-Directed Transactions and Reports of Atypical Transactions. e) Analyze and determine the communication of atypical transactions to the UIF. f) Evaluate and make the necessary corrections for the efficient application of Cash Transaction Reports, Atypical Transactions Multiple Transactions and Other Reports required by the UIF.

The responsibility of the supervised institution appointed as Compliance Manager in accordance with Article 6 of this Regulation shall meet at least the following requirements: a) Proven work experience in areas related to banking. b) Basic knowledge in the formulation and execution of policies and procedures for the prevention and detection of the crime of asset laundering, risk analysis, management of information systems, legal aspects and audit.

The following may not be appointed as Compliance Manager in supervised institutions:

• a)

  Directors or members of the Board of Directors.

• b)

  Holders of more than five percent (5%) of the shares.

• c)

  Persons who have been declared bankrupt or in creditor proceedings and who have not been rehabilitated.

• d)

  Persons who have been convicted of any crime against property or politics.

• e)

  The person who does not meet the minimum requirements to be appointed as Compliance Manager in accordance with these standards.

• f)

  Those officials who perform other unrelated activities within the institution and that interfere with proper due diligence.

It corresponds to the Compliance Manager the exercise of the following functions:

• a)

  Propose to the General Manager or Executive President the policies or procedures for the prevention and detection of the crime of asset laundering in the supervised institution.

• b)

  Conduct to the personnel of the supervised Institution all legal and regulatory provisions established by the authorities of the Republic of Honduras, as well as the internal procedures of the institution regarding the compliance program of said institution.

• c)

  Ensure that the rules and procedures established for the prevention of the crime of asset laundering are strictly complied with.

• d)

  Present quarterly reports to the General Manager or Executive President with copy to the Board of Directors of the Compliance Committee that contains among others the compliance with the obligations contracted in accordance with the new payment plan.

• e)

  Keep constantly updated on technical and legal aspects related to the crime of asset laundering.

• f)

  Establish channels of communication and cooperation with other supervised institutions in the system.

• g)

  Prepare, document and present to General Management and the Compliance Committee the report of atypical transactions detected in the supervised institution.

• h)

  Send reports related to the prevention of the crime of asset laundering that are requested by the UIF; dependent of the Superintendency.

• i)

  Ensure that standards for general client identification are met.

• j)

  Establish channels of communication between the main office, agencies and branches regarding the reporting of financial, multiple and atypical transactions.

• k)

  Prepare the records and reports that must be submitted to comply with these standards.

• l)

  Inform the UIF about new typologies of asset laundering that it knows or detects.

• m)

  In the development of products and services that the institution makes available to its clients, ensure that they contain internal control standards for the prevention of asset laundering.

• n)

  In coordination with the Human Resources area define parameters that ensure a high level of personal integrity, reliability and a system to evaluate the personal, labor and patrimonial background of the authorized employees and officials of the supervised institution. o) In coordination with the Human Resources area plan the training of personnel for the identification and full knowledge of its clients and instruct them regarding the responsibilities that the Law establishes for them; this Regulation and other laws and provisions that are issued. p) Serve as a liaison between the institution and the UIF. q) Advise the supervised institution on the preparation and execution of internal policies to prevent the risk of reputation derived from the misuse of the services and products provided by the institution. r) Others that the institution designates in relation to the matter of asset laundering.

Supervised institutions shall inform the Commission in writing about the appointment of the Compliance Manager, attaching the respective curriculum vitae. This provision is also applicable when there is a replacement of the Compliance Manager, informing the reasons for which it is being made or is to be reported. The Commission may formulate observations when it considers that the position or the level of responsibility that the members assume does not allow them to fulfill their functions in an appropriate manner.

Each supervised institution shall plan and execute permanent personnel training programs related to legal and technical aspects, as well as the policies and procedures adopted for the prevention of the crime of asset laundering. Of all training actions for the objective provided in this article, written record must be kept, signed by each participant. Likewise, the administration of the supervised institution shall ensure that the personnel and officials thereof comply with their obligations and legal responsibilities in their reference to the Law.

The supervised institution shall issue a Code of Deontology that requires all its personnel to comply with which declare with emphasis the commitment of the institution to prevent the misuse of its financial operations, in addition must be observed by its associates, legal representatives, directors, administrators, officials and employees to prevent the institution from being used to give legitimacy to funds that are the product of unlawful antecedents, as well as establish for collaboration with the authorities of the execution that in a sheet of comprehensive law Compliance Program.

Each supervised institution shall implement the sanctions regime of the institution in a manner that obliges the person who breaches one or more of the policies or procedures for the prevention and detection of the Compliance Program. The implementation of these sanctions must be, without prejudice to the sanctions stipulated in the Law.

In order to assist the Compliance Manager, each institution in its internal audit unit shall at minimum examine: a) Permanent programs of specific audits and verify the effectiveness and compliance of the policies and procedures for the prevention and detection of asset laundering by the Institution. b) Clauses in contracts with external auditors, requiring an opinion on compliance with the provisions in the Law and in other standards. This audit system shall form an integral part of the Compliance Program.

DUE DILIGENCE IN ESTABLISHING RELATIONSHIPS WITH DEPOSITORS AND CLIENTS: At the moment of establishing a contractual business relationship with a depositor or client, whether with a natural or juridical person, supervised institutions shall maintain in their files a profile of the depositor, available to determine the type, number, volume, and frequency of operations, products, or services that will predominantly be reflected in the depositor's account. The procedures adopted by each supervised institution to comply with this article shall allow for the recovery of sufficient information to adequately complete the profile of each depositor and client; when applicable, and to monitor their operations. Financial institutions, when opening or managing accounts for supervised clients that are obligated to report significant changes in the client, shall be required to maintain in their respective files at a minimum the following: 1. Communication from the Compliance Officer, on an honorary basis. 2. Copy of the letter of application of the Compliance Program by the National Banking and Insurance Institution. 3. Number of the statutory or supervised body or entity. 4. Name of the Firm or: External Audit. This information shall be presented and evaluated by the Compliance Committee; to determine the scope or acceptance of the information, attaching a copy of the act of the depositor and their client. CHAPTER III RULES RELATING TO THE CLIENT

KNOWLEDGE OF CLIENTS: Supervised institutions shall possess the determination and compliance of their client knowledge policies and procedures. These policies and procedures shall direct compliance to the Compliance Program and shall at least include the following: a) To gather the support that for what conclusions will be taken for the legitimacy of all those that are products of illicit activities, which could cause among other negative consequences the crime of money laundering. f) All persons having authorized signature authority on accounts shall be fully identified, as if such accounts were opened in personal names. g) Information shall be obtained and maintained regarding the identity of persons for whose benefit transactions are or shall be effected, whether upon account opening or when providing any other service or product, observing the following procedure:

• a)

  The information and documentation required at account opening shall be organized in a file.

• b)

  The institution's clients shall complete an application at the moment of opening their respective accounts, which shall include at least the following information: Name and surname, civil identification number, profession, trade or occupation, nationality, domicile, telephone, company where employed and position held, as well as name and surname of their banking and commercial references; likewise, presenting original and photocopy of the personal identity document, the copy of which shall be retained by the institution.

• c)

  A national identity card must be required from national clients, resident card or passport from foreigners, as well as the passport page bearing the seal of entry to Honduras.

• d)

  Natural persons of foreign nationality shall present a valid passport or verified resident card and its citizenship information. Likewise, appropriate public procedures and due diligence controls shall be established, if necessary, these requirements, reasonably applied in order to detect and report cases of money laundering through said accounts.

• e)

  Deposit accounts may not be opened under fictitious names, nor under any other modality that conceals the identity of the account holder.

VERIFICATION OF REFERENCES ON CLIENTS: The procedure for verification of client references shall include the following: a) Information shall be verified regarding the person's history as a client of good credit, commercial persons, commercial references, supervised Institution, to decide to open the account, if as is believed that the requirements are in a position to produce goods or services, if the same shall be hypothesis is in a position to produce goods or services, observing documentary evidence of this management in the client's file. b) A document to verify these references may consult a reliable source regarding its activities or occupation; the supervised institution, if it decides to open the account, shall verify the client's business or domicile to confirm its real existence and that the occupation mentioned can be supplied and documented in the client's file.

TRANSACTIONS WITH JURIDICAL PERSONS:

• a)

  With respect to accounts of juridical persons, the presentation of original documents or copies of Articles of Incorporation and their modifications duly registered in the Property Registry (real property) shall be requested. National Tax Registry, as well as identity documents of the company's representatives and persons authorized to sign on the depositor and client accounts; when applicable, and to monitor their operations.

• b)

  Upon opening accounts for clients not previously connected with the institution and in other cases where the institution deems necessary, the institution may request additional verification of the business to confirm its real existence and that the representative is in a position to produce goods or services, requesting documentary evidence of this management in the client's file.

• c)

  When a division assumes operations of one or more service providers it shall require the authorization conferred by the State Department in the sections of the safe conduct, in the Republic of Honduras as respectively registered in the Commercial Public Registry. It shall also obtain comparatively similar documents or legally attached annexes for certain awards identified in Honduras.

SHELL BANK: Direct or indirect financial relationships with institutions that meet the specifications of a Shell Bank as defined in Article 2 of this Regulation are prohibited. CHAPTER IV RULES RELATING TO BANKING SERVICES

REQUIREMENT OF UNIFORM INFORMATION FOR ACCOUNT OPENING: At the moment of opening an account, supervised institutions shall require clients to provide the following information: [NATURAL PERSONS] a. Full name (as it appears in the identity document) b. Date of birth c. Place of birth d. Profession, occupation or trade e. Nationality f. Gender g. Identification number h. Type of identification (identity card, passport, resident card) i. Complete residential address j. Marital status, name of spouse (if applicable) k. Telephone number, email address of domicile l. Full name of the company m. Business line or activity n. Name of the company where employed o. Name of the company offering the business p. Complete address of the company q. Telephone number of the business r. Time employed at the company s. Position/role held t. Specify the places of income [JURIDICAL PERSONS] a. Business name or corporate designation b. Trade name c. RTN number d. Updated list of partners and shareholders e. Natural or juridical persons that f. Business line or activity g. Banking and commercial relationships h. Estimated monthly volume to be managed in the account i. Specify the source of funds ii. Approximate monthly income volume v. Estimated monthly volume to be managed in the account w. Banking or commercial references or in their absence persons x. Purpose of the account y. Specification of the Law

OPENING OF SPECIAL ACCOUNTS:

• a)

  In opening an account for a minor or for any other person, by an administrator, attorney-in-fact or guardian, the verification steps corresponding to a natural person account shall be completed.

• b)

  For individual circumstances and businesses that are owned by a person, presentation of the individual merchant document, registration in the Public Commerce Registry and identification of the same in the file shall be required. These accounts may only be opened in the name of the merchant.

• c)

  In opening accounts in the name of Associations, Clubs, Foundations, Churches, Nonprofit Associations, presentation of the original and photocopy of their legally authorized By-Laws, copies of which shall be included in the file, shall be requested.

• d)

  The opening of "pay-able-through" accounts (payable through the customer) shall comply with all requirements established by the paying bank.

ACCOUNT MONITORING: a) Supervised institutions must establish a procedure that allows the account holder to require reporting of unusual transactions that involve payments or receipts in favor of third parties who are not account holders by the individuals themselves or to suspect that they originate from effects established at the Central Bank of Honduras; which is compared with the client or a group of clients. b) When an institution receives a transaction from a person and the nature or juridical person that has an account, and the transaction does not conform to the account number of the originator, it must require the sole bank that is necessary the transfer shall be of licit origin. If the transfer does not conform to the account number of the originator, it must proceed or proceed one or proceeds one proceeds from one proceeds in cash or with another credit instrument of cooperation in the supervised institution shall convince the beneficiary thereof.

DEPOSIT AND WITHDRAWALS OF CASH IN NATIONAL CURRENCY AND FOREIGN CURRENCY: A system shall be implemented to monitor the frequency and volume of transactions conducted by clients with the same subject.

TRANSACTIONS WITH SECURITIES: The supervised system must pay special attention to the possibilities of money laundering using transactions or securities. Such as:

• a)

  Unusual transactions with securities, these in cash.

• b)

  Purchase of securities to be held in custody by the financial institution, although the provision may not be in accordance with the client's economic position.

• c)

  Request for investment services in foreign currency or securities with funds in practices or not consistent with the client's prior economic position.

SAFETY DEPOSIT BOXES: Precautions shall be taken in the due diligence of clients to obtain safety deposit boxes; other types of custody. If these services are provided to persons under the terms previously considered, the identification procedures described in this Regulation shall be followed.

TRANSFERS AND FOREIGN COMMERCE TRANSACTIONS: a) When repeated transfers or transactions of values previously given about their legitimacy are presented, the receiving institution shall request from the remitting institution information regarding what it deems necessary concerning the legitimacy, identity and activity of the remitting client. b) Supervised institutions must ensure that the initial procedures relating to an application for external transfers are complied with, such as: * Upon opening the letter of credit, verify if it is verified in the client's commercial activity, domicile and commercial links with the beneficiary. To pay special attention to those clients who insist on paying by letter of credit in cash or with some credit instrument of equal origin. * The remitting institution of collection must be convinced that the degree goes client as known the local institution. If this is not the case, it must proceed or in copy placed to pay in cash or with another credit instrument of equal origin. * In which export credit letters the supervised institution must convince the beneficiary thereof.

ELECTRONIC TRANSFERS: Supervised institutions, by means of clear and significant intention regarding the issuer of their electronic transfers (name, identity, domicile, telephone or account number).

OPENING OF TRUSTS: In the case of trusts, supervised institutions shall require the corresponding certifications evidencing the incorporation and legal subscription of these corporate entities, so that they may establish and document the relationship of said corporate entities, so that they may establish and document the relationship of the CHAPTER V RULES RELATING TO EMPLOYEES

KNOWLEDGE OF EMPLOYEES: In order to ensure the maintenance of the highest moral quality of its employees, the supervised institution:

• a)

  Shall carefully select and investigate personnel and monitor their conduct, especially those holding positions related to client service, extension, administration, investment of funds and information control, establishing appropriate rules and controls.

• b)

  Shall exercise special care regarding those employees whose standard of living does not correspond to their salary, whether remuneration or appear to have direct or indirect links with the disappearance of institution funds.

• c)

  Shall establish procedures to evaluate and verify the personal, employment and asset backgrounds of its employees, officials and legal representatives.

PERSONNEL TRAINING:

• a)

  Continuous attention and training of personnel must be provided in the institution's procedures to facilitate the recognition of money laundering and penalties for non-compliance.

• b)

  Training must be directed to all personnel, but with greater emphasis on continuity in lines related to customer services, so that they may detect any situation or transmission that could be directly or indirectly linked to the crime of money laundering.

• c)

  All personnel must be trained on the basic concepts of money laundering and its stages: Education, structuring, and integration, in addition to the inherent aspects of the Law, its regulations, and international standards.

• d)

  Every newly hired employee, prior to the execution of their first professional actions, must participate in an introductory training program regarding the knowledge and responsibilities that the Law and this Regulation confer upon them in their actions. Documentary evidence must be left in the files of each employee. CHAPTER VI REPORTS AND RECORDS OF CASH TRANSACTIONS, ATYPICAL AND MULTIPLE TRANSACTIONS

REPORTS AND RECORD OF CASH TRANSACTIONS: Supervised institutions shall register in the accompanying form "Record of Cash Transactions", those operations that equal or exceed the amount established for such purpose by the Central Bank of Honduras. Said form shall be sent to the FIU within the first ten (10) business days of each month by means of the determined system that will be provided for such purpose, or conversion of the original form of five (5) years, which may be required by the FIU when it deems it appropriate.

REPORT OF MULTIPLE CASH TRANSACTIONS: Supervised institutions shall verify during the business week deposits or withdrawals of cash, notices or reports to the institutions of the Central Bank of Honduras, which together equal or exceed what is established in Article 34 of the Law. Supervised institutions shall declare the operation through electronic mechanisms that must be sent to the FIU within the first ten (10) business days of each month, by means of the system to be determined at their discretion. These documents that regulate this type of transaction shall be preserved for a period of five (5) years, which may be required by the FIU when it deems it appropriate.

REPORT OF OTHER FINANCIAL TRANSACTIONS: The supervised institution shall report to the FIU within the first ten (10) days of each month, through electronic system, financial transactions not directed and other financial transactions that do not derive from exchange operations, solutions that could be used for the misuse of financial services and products.

REPORTS AND RECORD OF ATYPICAL TRANSACTIONS: In the Report of Atypical Transactions, the supervised institution must immediately communicate to the FIU those operations carried out by natural persons that the entity identified as atypical; these must be included in an individual file and must contain all necessary supporting information that amplifies and evaluates this situation. The FIU, upon receiving the report of the atypical transaction, shall acknowledge receipt, indicating in its response designation to the reported transaction as a unique reference in the weighted analysis thereof. To facilitate the Supervised System in identifying probable transactions that could be used for the misuse of financial services, the Commission shall periodically send updated communication on examples of suspicious operations that could be used for the misuse of financial services.

MONITORING OF USERS OF THE SUPERVISED SYSTEM: Once the commercial relationship with a client is established, the parameters under which the operations that said client executes corresponding to their affinity must be specified. The operation and the money that can derive from the relationship or documented knowledge that is held of them. Monitoring must be applied individually to all clients of the supervised institution to allow for effective detection of atypical operations. For the latter, supervised institutions shall develop or acquire computer programs that allow determining all those operations that the client executes through the client system at the time of opening, which shall allow collecting client information of the supervised institution, analyze and evaluate according to the client profile, modify parameters to ensure incidents are recorded in the client file. Monitoring of transactions must focus primarily on the record of important transactions through direct means or any other monetary instrument. In this article, the supervised institution shall maintain a detailed record of transactions required as support for the limits established by the Central Bank of Honduras to be able to produce or service. CHAPTER VII PROCEDURES MANUAL FOR THE PREVENTION OF MISUSE OF FINANCIAL SERVICES

PROCEDURES MANUAL: The control mechanisms adopted by supervised institutions must be embodied in a Procedures Manual, approved by the Board of Directors, that considers the unique characteristics of each institution and its clients to provide clear documentation description on the pages for the development of the prevention of money laundering crime. It is an integral part of the Compliance Program. All aspects mentioned in this Regulation must be contained in said Manual individually; it must include the following:

• a)

  Control policies and communication channels between the main office and its branches and agencies.

• b)

  Procedures to monitor compliance with the standards contained in the Manual.

• c)

  Procedures for compliance with employee knowledge requirements by Human Resources.

• d)

  Procedures for compliance with the customer knowledge policy by operations; and procedures for how to document verification of information in client files.

• e)

  Procedure for identifying market segments at higher risk for misuse of financial services and products.

• f)

  All others that the supervised institution deems pertinent. The Procedures Manual must be constantly updated according to the needs of the institution. Any modification to the mechanisms adopted must be reported to the Superintendence. CHAPTER VIII PREVENTION OF FINANCING OF TERRORISM

REPORT OF TRANSACTIONS: When supervised institutions suspect or have reasonable grounds to suspect that there are funds linked or related to what could be used to finance terrorism, they must immediately report their suspicions to the FIU.

OBLIGATION TO COMPLY WITH LISTS SENT BY THE COMMISSION: Supervised institutions shall comply with the required promptness with the lists regarding natural or legal persons that represent a significant risk or indication that threatens national and international security.

ACCOUNT FREEZING: When supervised institutions detect transactions with persons listed in the lists mentioned in the preceding article, they must immediately report to the Financial Information Unit so that the Public Ministry immediately requests the freezing of the related accounts. CHAPTER IX SUPERVISION

SUPERVISION PERSONNEL: The Commission shall conduct supervision of congruence of General Examination to the supervised Institutions in human resources during one of the Superintendencies (Superintendence of Banks, Financial Companies and Savings and Loan Associations, Superintendence of Insurance and Pensions and Superintendence of Securities and Other Institutions). CHAPTER X SANCTIONS ON SUPERVISED INSTITUTIONS BY THE COMMISSION

SANCTIONS: Without prejudice to the criminal liability in which they could incur due to the crime regulated in the Law, supervised institutions by the Commission that fail to comply with the standards imposed by that regulation and by the Law shall be sanctioned with a fine of ten (100) to one hundred (100) minimum salaries based on the years of the zone where the institution is registered in accordance with what is indicated in Title Three of Sanctions; Sole Chapter of Sanctions, Articles 68 and 69 of the Law of Institutions of the Financial System. CHAPTER XI OTHER OBLIGATED PARTIES

RESPONSIBILITIES OF OTHER OBLIGATED PARTIES: Other Obligated Parties are subject to the provisions referred to supervised institutions by the National Commission of Banks and Insurance related to the crime of money laundering and shall have the responsibility of presenting atypical reports that they detect and multiple transactions that were carried out in the period and by the established amounts. They shall have the obligation to preserve information permanently for a period of five (5) years.

PREVENTION OF FINANCING OF TERRORISM: They shall apply what is described in Articles 39 to 41 of this Regulation. CHAPTER XII CONFIDENTIALITY AND SECRECY

CONFIDENTIALITY AND SECRECY: Supervised institutions by the Commission, officials and employees of the FIU, of the Superintendencies (Superintendence of Banks, Financial Companies and Savings and Loan Associations, Superintendence of Insurance and Pensions and Superintendence of Securities and Other Institutions, Superintendence of Banks), as well as employees, officials, directors, advisors, judges, representatives, consultants, legal representatives, experts in compliance, internal auditors and external auditors of supervised institutions are prohibited from disclosing to any person the fact that information has been requested for security or corresponds to a report as referred to the interested person, even if the information is requested by way of legal notice, except to the competently designated authorities. CHAPTER XIII FINAL PROVISIONS

EXCHANGE OF INFORMATION: The Financial Information Unit may exchange administrative information with Financial Investigation Units, Financial Analysis Units in supervised local and international financial investigations. This exchange must be conducted with respect and guarantee of confidentiality, signed between both jurisdictions under the established terms.

IMPLEMENTATION OF THIS REGULATION: The supervised institutions shall implement this Regulation immediately upon its entry into force. The Regulation shall enter into force upon its publication in the Official Gazette La Gaceta. 8 N. 2002

ENTRY INTO FORCE: This Regulation shall enter into force upon its publication in the Official Gazette La Gaceta. 8 N. 2002 CERTIFICATION The undersigned, General Secretary of the Secretariat of State in the Office of Industry and Commerce, CERTIFIES: RESOLUTION No. 611-2002, which reads as follows: "SECRETARIAT OF STATE IN THE OFFICE OF INDUSTRY AND COMMERCE, TEGUCIGALPA, MUNICIPALITY OF THE CENTRAL DISTRICT, October 2002. WHEREAS: To resolve administrative file Number 4013-2002, which contains the Application presented to the General Secretary of this Secretariat of Industry and Commerce, by Attorney CARLOS H. LOPEZ LUNA, in his capacity as Legal Representative of the Commercial Company ERICSSON DE HONDURAS, S.A., with domicile in Tegucigalpa, municipality of the Central District, grants to its represented party an Exclusive Distributor License for a defined period until September 13, 2003, with jurisdiction over the entire territory of the Republic of Honduras, to distribute all equipment and products manufactured by the granting company ERICSSON AB, domiciled at ERA Thorshamnsgatan 25, SE-164 81, Stockholm, Sweden. WHEREAS: That the requirements established by the Law of Representatives, Distributors and Agents of National and Foreign Companies and its Regulation having been met, the General Secretary refers this matter to the General Directorate of Productive Sectors for continuation of proceedings. WHEREAS: That the Directorate of Legal Services, based on the Technical Report issued by the General Directorate of Productive Sectors, determined that all requirements demanded by the Law of Representatives, Distributors and Agents of National and Foreign Companies and its Regulation have been met, being appropriate to grant the requested License. BY THEREFORE: The Secretariat of State in the Office of Industry and Commerce, in application of articles 1, 19, 22, 60 subsection f) and 72 of the Administrative Procedure Law; 1, 2, 3 and 4 of the Law of Representatives, Distributors and Agents of National and Foreign Companies; 1, 2, 3, 4 and 5 as modified of the Regulation by Executive Agreement No. 141 of October 31, 2000, 2 and 23 of the Investment Law. RESOLVES: FIRST: To declare with place the Application for an Exclusive Distributor License, presented by Attorney CARLOS H. LOPEZ LUNA, in his capacity as Legal Representative of the Commercial Company ERICSSON DE HONDURAS, S.A., for meeting the requirements of the Law of Representatives, Distributors and Agents of National and Foreign Companies and its Regulation. SECOND: To grant to the participating Company the Exclusive Distributor License, for a defined period until September 13, 2003, with jurisdiction over the entire territory of the Republic of Honduras, to distribute all equipment and products manufactured by the granting company ERICSSON AB, domiciled at ERA Thorshamnsgatan 25, SE-164 81, Stockholm, Sweden. The Resolution shall be published in the Official Gazette La Gaceta prior to the presentation of the file, noting the publication, ensuring that it consumes the presentation. Respective Registry to which effect carries the Directorate of the Secretariat of State, with which NOTIFIED, SALVADOR MURCIE, Sub Secretary of Business Development and Commerce, RAFAEL ANTONIO TREJO, General Secretary. And for the purposes that may be of interest, this is extended to the interested party, in the city of Tegucigalpa, municipality of the Central District, on the twenty-third day of the month of October of two thousand two. RAFAEL ANTONIO TREJO General Secretary 8 N. 2|l02 CERTIFICATION The undersigned, Secretary of the Court of First Instance Civil Court of this sworn before the same Court of First Instance FIRST CIVIL.- San Pedro Sula, twenty-fourth of thirty of the year two thousand two.- Likewise the writing is such without life; all creditors of the succession PARQUE INDUSTRIAL SAN MIGUEL, S.A. are cited to a Meeting for the recognition of creditors, which shall be held at forty o'clock in the afternoon on the twenty-fourth of this month of the current year [2002], starting at nine o'clock in the morning, in the meeting room of the Chamber of Commerce and Industries of La Cruz. By means of the reception of the Departments personally to the representative of the Union Attorney Héctor Rodolfo Bueso Hernández, to the Intervener, who proposed Judge Icela Cobaleda and to the Legal Representative of the company declared in suspension, Engineer Roberto Larion Silva.- Order the publication of this ruling three consecutive times in the Official Gazette La Gaceta and in a newspaper of greater circulation at the national level.- Articles 801 and 85 of the Code of Civil Procedure: 1333, 1382, 1383, 1385 and 1655 of the Commercial Code.- NOTIFY.- SEAL AND SIGNATURE.- LIC. AYME SEGURA DE MIDENCE.- JUDGE.- SEAL AND SIGNATURE.- SUSANA CHAVARRIA DE MANCIA.- SECRETARY.- And for the purposes that may be of interest to the party, I extend this Certification in the city of San Pedro Sula, Cortés, on the twenty-fifth day of October of the year two thousand two. SUSANA CHAVARRIA DE MANCIA Secretary 6, 7 and 8 N. 2|l02 SECRETARIAT OF STATE OF THE PRESIDENTIAL OFFICE AGREEMENT No. 0365-DP-2002 Tegucigalpa, M.D.C., August 7, 2002 THE UNDERSIGNED, SUB SECRETARY OF STATE OF THE PRESIDENTIAL OFFICE, in use of the powers conferred upon her and in application of Executive Decree No. 203-2002, dated March 13, 2002, by which the Citizen Constitutional President of the Republic granted to State Secretaries with Integrated Office the power to sign Agreements and other Administrative Resolutions for the termination of personnel of the Secretariat of State of the Presidential Office and also in application of Executive Agreement No. 138-DP-2002, dated March 14, 2002, by which the Citizen Secretary of State of the Presidential Office delegates to the Sub Secretariat of State of the Presidential Office the power to sign Agreements and other Administrative Resolutions for the termination of personnel of the Secretariat of State of the Presidential Office. Agrees to Grant Severance as of August 16, 2002 to the citizen ADA BESSY MOLINA ALVARADO from the position of TECHNICAL IN CIVIL SERVICE, in the General Directorate of Civil Service, dependent on the Secretariat of State in the Presidential Office, affecting the Budget allocation of the Constitutional Budget of the Republic in her position of Office Official I, located on payroll 01, program 01, sub unit 01, area 01, position code 00004, dependent on this Secretariat of State. She shall earn the monthly salary of Lps. 3,229.00, assigned in the General Budget of Income and Expenses of the Republic, as of the date of taking possession of the position, prior to presentation of her certificate of Sworn Declaration of Assets, issued by the Directorate of Administrative Integrity. NOTIFY: GUILLERMO PEREZ CADALSO ARIAS Secretary of State in the Office of Foreign Relations OLMEDA RIVERA RAMIREZ General Secretary SECRETARIAT OF FOREIGN RELATIONS AGREEMENT No. 306-SRH Tegucigalpa, M.D.C., July 5, 2002 THE SECRETARY OF STATE IN THE OFFICE OF FOREIGN RELATIONS, in use of the powers conferred upon him by the President of the Republic, by Executive Decree 403-2002 of March 13, 2002. AGREES: 1. To appoint, as of July 22 of the current year, Mrs. DELY SAGRARIO GODOY CERRATO, to the position of Office Official I, located on payroll 01, program 01, sub unit 01, area 01, position code 00004, dependent on this Secretariat of State. 2. She shall earn the monthly salary of Lps. 3,229.00, assigned in the General Budget of Income and Expenses of the Republic, as of the date of taking possession of the position, prior to presentation of her certificate of Sworn Declaration of Assets, issued by the Directorate of Administrative Integrity. NOTIFY: GUILLERMO PEREZ CADALSO ARIAS Secretary of State in the Office of Foreign Relations OLMEDA RIVERA RAMIREZ General Secretary "RESOLUTION No. 871/29-10-2002 The National Commission of Banks and Insurance, WHEREAS: That in accordance with Resolution 23-2001 of the National Congress of the Republic, dated April 9, 2001, the Law of Financial Recovery for the Reactivation of the Agricultural Sector was promulgated. WHEREAS: That by means of Decree 18-2001 of the National Congress of the Republic dated April 22, 2002, the Law of Solidarity with the Agricultural Producer was promulgated. WHEREAS: That the provisions contained in Article 30 of the Law of Financial Recovery for the Reactivation of the Agricultural Sector issued the Special Regulation for application of agricultural credit in the Savings and Credit Cooperative and the Financier of Agricultural Cooperatives Limited. WHEREAS: That in accordance with Article 41 of the Administrative Procedure Law, the opinion of the Attorney General of the Republic is necessary. WHEREAS: That by means of Certification dated October 14, 2002, the Attorney General of the Republic issued a favorable opinion on this Regulation. BY THEREFORE: Based on Article 30 of the Law of Financial Recovery for the Reactivation of the Agricultural Sector; in session of October 29, 2002, it resolves: 1. To issue the following: SPECIAL REGULATION ON THE REACTIVATION OF THE AGRICULTURAL SECTOR FINANCED BY THE SAVINGS AND CREDIT COOPERATIVES AND THE FINANCIER OF AGRICULTURAL COOPERATIVES LIMITED CHAPTER I OBJECTIVE AND PURPOSE

This Regulation establishes the Norms and Procedures for the execution of the financial mechanism referred to in Decree No. 32-2001, Law of Financial Recovery for the Reactivation of the Agricultural Sector, in application of Article 30 published in the Official Gazette La Gaceta of April 9, 2001.

The destination of eligible credits for the reactivation and rehabilitation shall be the following agricultural activities: Agriculture, crafts or even major livestock and minor livestock, fish farming, forestry, beekeeping, floriculture, general livestock, deposit livestock, securities exchanges, securities desks or houses, farm level and agro-industrial and salt extraction activities. Agricultural agro-industrial activities and agricultural products are excluded. CHAPTER II OF THE RELIEF MECHANISM ON THE BALANCE OF CAPITAL OWED

OF THE BENEFICIARIES: Those are the cooperativists who owe credits to the Savings and Credit Cooperatives, whose destination has been any of the activities established in Article 2 of this Regulation and who have been affected by productive activity, which has obliged them to reduce their payment capacity and who are in arrears as of December 1, 2001 and whose cooperatives are classified in categories III and IV in accordance with the norms of the National Commission of Banks and Insurance. A cooperativist is understood to be any person who, both at the date of entry into force of the Law of Financial Recovery for the Reactivation of the Agricultural Sector and at the date of publication of this Regulation and Statutes, is registered and meets the conditions established in the Cooperative Law, in accordance with the terms established in the Cooperative Law, in accordance with the terms established in the Cooperative Law.

SELECTION CRITERIA FOR BENEFICIARIES. The Cooperatives participating in the Relief Mechanism on the Outstanding Balance shall select, based on case-by-case analysis, those producers who meet the defined requirements that demonstrate repayment capacity. The selected credits shall be reviewed by the cooperatives FACACH - Applications to access the relief mechanism must be presented to the Secretariat of State in the Office of Finance and shall be subject to subsequent review by the National Commission of Banks and Insurance. Credits selected by the Financier of Agricultural Cooperatives Limited (FINACOOP) shall be subject to prior review by the Banks and Insurance Commission.

EXCLUDED BORROWERS. The following may not be beneficiaries: 1. Those borrowers to whom the National Complementary Guarantee Fund (FONGAC) has granted or Certified a Guarantee, except those cases whose loss was due to natural disasters. 2. Those borrowers with credits that have been or are classified in category V, in accordance with the norms of the National Commission of Banks and Insurance; and 3. Members of the Board of Directors, Senior Management and Control Bodies of the Cooperatives and of the National Cooperative Organizations.

DETERMINATION OF THE BALANCE OWED. The balance owed by the eligible producer shall be paid from the payment balance plus current interest corresponding to a maximum of ninety (90) days from the last payment date, minus ninety percent (90%) of the total contributions that the same borrower maintains in the cooperative as of the date of determination of the balance owed. These measures shall also be applicable to all underlying obligations of the credit. In those operations in which the cooperatives have applied 100% of the contributions to delinquent debts of eligible borrowers, these may renegotiate 10% of said operations. Cooperatives that use the cash method to record operating income shall calculate the rate of accrued reaction on the balance of operating income (90) days, counted from the last payment date and the remaining interest, if any, as suspended interest in order accounts by contra. The producer is obliged to pay the interest accrued from January 1, 2001 to the date of submission of the application, such interest shall be capitalized if the borrower requests it to the balance of capital owed, which shall be reduced, in this case from case to case with cooperative consideration. Interest acts should be registered as income on a proportional basis with each payment.

MAXIMUM AMOUNT OF RELIEF ON CAPITAL OWED: The maximum amount of relief on the capital owed per borrower is indicated in the Law of Financial Recovery for the Reactivation of the Agricultural Sector, which was amended by Decree No. 32-2001.

APPLICATION OF RELIEF: The reduced balance shall have a 50% relief, applicable to capital installments in accordance with the payment plan, starting from the first installment and throughout the debt. The cooperativist must pay the remaining 50% of the installment plus the corresponding interest calculated on insoluble balances. In advance payments, the 50% relief shall be granted immediately against prospective payment. The suspended interest referred to in Article six (6) shall be withdrawn from the cooperatives' books proportionally to the reduction of the obligation incurred in accordance with the new payment plan.

REHABILITATION CREDITS: Once the payment capacity of the cooperativist has been determined, new credits may be granted in accordance with his needs, but these may not be used to amortize debts incurred by the cooperativist with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National 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National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial System or with the National Financial 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INTEREST RATE FOR READJUSTMENT AND REHABILITATION: The interest rate for readjustment loans and new rehabilitation loans shall be determined by the lending cooperative.

FINANCING OF THE RELIEF MECHANISM: Said mechanism shall be financed as follows: Ten percent (10.0%) from reserves for credits of doubtful recovery, which usually comes from the reduction of the provision directly against its operating expenses. and 1. Forty percent (40.0%) with bonds of the State of Honduras, issued by the Secretariat of State in the Office of Finance, for a term of up to ten (10) years, amortized annually, earning a variable interest rate approved by the Central Bank of Honduras. Cooperatives that do not present in their books reserves for credits of doubtful recovery or that the same is insufficient to cover other credits or these uncollectible loans not included within this mechanism, shall record the 10% mentioned directly against their operating expenses.

LOSS OF RELIEF BENEFIT: Beneficiaries of this relief shall lose access upon their payment within ninety (90) days following the date of contracted payment, not being the benefit caused. This period may be extended up to an additional ninety (90) days if requested from the participating cooperative. And if these loans qualified by this Such request must be presented to the Secretariat of State in the Office of Finance. Failure to comply with the obligations incurred by the beneficiaries of the relief on the balance of capital owed shall give rise to the cooperative being able to apply administrative and legal sanctions for the recovery of the credit, including the existing balance of suspended interest and other procedural amounts. The Federation of Savings and Credit Cooperatives of Honduras (FACACH) shall authorize the Secretariat of State in the Office of Finance to cure so that it should investigate the matter from its account, when subsequent reviews conducted by the National Commission of Banks and Insurance verify that the selected producers do not meet the requirements established in Article 3 of the Law of Financial Recovery for the Reactivation of the Agricultural Sector (Decree No. 32-2001). CHAPTER III OF THE CONTROL AND MONITORING OF THE MECHANISM

For the purposes of this Regulation, the National Commission of Banks and Insurance shall establish a system of control, monitoring, and supervision over credits restructured and rehabilitated by cooperative producers, which meet the requirements in the criteria established by the Federation of Savings and Credit Cooperatives of Honduras (FACACH) and the Agricultural Cooperatives Financing Limited Company.

The cooperatives participating in the mechanism shall submit to the National Commission of Banks and Insurance quarterly information on the development of this mechanism to the State Department of Finance in accordance with the designs that the Division of Monitoring of Other Institutions provides for this purpose.

The National Commission of Banks and Insurance shall report quarterly on the development of this mechanism to the State Department of Finance. CHAPTER IV GENERAL PROVISIONS

GUARANTEES: To guarantee compliance with the objectives of this Regulation, and in relation to the contribution of forty percent (40%) from the Central Government to the credit on the balance of capital owed, which cooperatives that adhere to it receive, the Federation of Savings and Credit Cooperatives of Honduras (FACACH) and the Agricultural Cooperatives Financing Limited Company, in accordance with the conditions that the State Department of Finance establishes, the guarantee mechanism shall be established.

PAYMENT SPECIFICATIONS: All documents including public deeds, securities, and other documents that must be executed in compliance with this Regulation shall be exempt from the payment of transfer taxes, stamps, registration fees, and other fiscal charges. These documents shall have the character of Executive Title.

The participating cooperatives shall maintain in their files the documentation corresponding to credit operations related to restructuring and new rehabilitation loans for subsequent supervision of operations.

Matters not provided for in this Regulation shall be resolved by the National Commission of Banks and Insurance, provided that they do not contravene any legal or regulatory provision in effect. CHAPTER V EFFECTIVE DATE AND REPEAL

This Regulation shall enter into force as of this date and shall be published in the Official Gazette La Gaceta. This Resolution repeals Resolution No. 369/15-05-2001 of May 21, 2001, communicated through CNBS Circular No. 008/2001. 2. Authorize the Department to submit this Resolution to the Official Gazette La Gaceta for its publication. 3. This Resolution is of immediate execution. ANA CRISTINA DE PEREIRA President FRANCISCO ERNESTO REYES Secretary s.i.