TERRORIST FINANCE: FOLLOWUP - HONDURAS

UNCLAS TEGUCIGALPA 000498 SIPDIS SENSITIVE STATE FOR EB/ESC/TFS, INL/LP, S/CT, DRL/PHD, AND WHA/CEN JUSTICE FOR OIA, AFMLS AND NDDS TREASURY FOR FINCEN PANAMA FOR CUSTOMS ATTACHE E.O. 12958: N/A TAGS: PTER EFIN ETTC KJUS PREL HO UN SUBJECT: TERRORIST FINANCE: FOLLOWUP - HONDURAS REF: A. STATE 37211 ¶B. 03 TEGUCIGALPA 2939 ¶1. (SBU) Honduran cooperation on counter-terrorism finance continues to be strong. As noted in ref B, the Honduran Banking and Insurance Commission promptly sends out freeze orders to the entire regulated financial sector each time the U.S. Executive Order lists are amended. The financial sector, particularly the commercial banks, promptly undertake the requested searches for accounts by terrorist entities. To date, no terrorist funds have been found in the Honduran financial system, and Post believes this is the sole reason that the Government of Honduras has not yet frozen any funds. ¶2. (SBU) This excellent cooperation has been ongoing in the context of the implementation of a much-improved Money Laundering law, approved in early 2002. The GOH established a Financial Information Unit (FIU),rapidly following the entry of the law into effect. A small U.S. Treasury Department money laundering technical assistance project is ongoing. This work has already resulted in strengthened accountability by the banking sector in identifying and reporting suspicious transactions. ¶3. (SBU) As part of its newly-approved IMF program, the Honduran government will be working closely with international experts during 2004 to upgrade regulations on confiscation, freezing, and seizure of assets and to start onsite verification of supervised entities' policies regarding customer acceptance. The government has also pledged to introduce amendments in the penal code to clarify that terrorist financing and money laundering are punishable crimes. These amendments will ensure that, if any terrorist financing assets are found in Honduras, there would be no legal grounds for the involved entities to challenge the freezing of the funds. PALMER