1. The Schedule of a Party sets out, pursuant to Articles 10.9 (Investment – Reservations and Exceptions) and 11.7 (Cross-Border Trade in Services – Reservations) the reservations taken by that Party with respect to existing measures by a Party that do not conform with obligations imposed by:
(a) Articles 10.4 (Investment – National Treatment) or 11.3 (Cross-Border Trade in Services – National Treatment);
(b) Articles 10.5 (Investment – Most-Favoured-Nation Treatment) or 11.4 (Cross-Border Trade in Services – Most-Favoured-Nation Treatment)
(c) Article 11.5 (Cross-Border Trade in Services – Local Presence);
(d) Article 10.7 (Investment – Performance Requirements);
(e) Article 10.8 (Investment – Senior Management and Boards of Directors); or
(f) Article 11.6 (Cross-Border Trade in Services – Market Access).
2. Each reservation sets out the following elements:
(a) Sector refers to the general sector in which the reservation is taken;
(b) Sub-Sector refers to the specific sector in which the reservation is taken;
(c) Industry Classification refers, where applicable, to the activity covered by the reservation according to industry classification codes;
(d) Type of Reservation specifies the obligation referred to in paragraph 1 for which a reservation is taken;
(e) Measures identifies the laws, regulations or other measures, as qualified, where indicated, by the Description element, for which the reservation is taken. A measure cited in the Measureselement:
(i) means the measure as amended, continued or renewed as of the date of entry into force of this Agreement, and
(ii) includes any subordinate measure adopted or maintained under the authority of and consistent with the measure;
(f) Description sets out the non-conforming aspects of the existing measures for which the reservation is taken. It may also set out commitments for liberalization.
3. In the interpretation of a reservation, all elements of the reservation, with the exception of Industry Classification, shall be considered. A reservation shall be interpreted in the light of the relevant provisions of the Articles against which the reservation is taken. To the extent that:
(a) the Measures element is qualified by a liberalization commitment from the Description element, the Measures element as so qualified shall prevail over all other elements; and
(b) the Measures element is not so qualified, the Measures element shall prevail over all other elements, unless any discrepancy between the Measures element and the other elements considered in their totality is so substantial and material that it would be unreasonable to conclude that the Measures element should prevail, in which case the other elements shall prevail to the extent of that discrepancy.
4. Where a Party maintains a measure that requires a service provider be a citizen, permanent resident or resident of its territory as a condition to the provision of a service in its territory, a reservation for that measure taken with respect to Article 11.3, 11.4 or 11.5 (Cross-Border Trade in Services – National Treatment, Most-Favoured-Nation Treatment or Local Presence) shall operate as a reservation with respect to Article 10.4, 10.5 or 10.7 (Investment – National Treatment, Most-Favoured-Nation Treatment or Performance Requirements) to the extent of that measure.
5. The listing of a measure in this Annex is without prejudice to a future claim that Annex II may apply to the measure or some application of the measure.
6. For purposes of this Annex:
CPC means Central Product Classification numbers as set out in Statistical Office of the United Nations, Statistical Papers, Series M, No. 77, Provisional Central Product Classification, 1991; and
SIC means Standard Industrial Classification numbers as set out in Statistics Canada, Standard Industrial Classification, fourth edition, 1980.
Annex I
Schedule of Honduras
Sector: All Sectors
Type of Reservation: National Treatment (Article 10.4)
Level of Government: Central
Measures: Decree No. 131, Constitution of the Republic of Honduras, Title III, Chapter II, Article 107 (Decreto No. 131, Constitución de la República de Honduras, Título III, Capítulo II, Artículo 107)
Decree No. 90-1990, Act on Property Acquisition in Urban Areas delimiting the Article 107 of the Constitution of the Republic of Honduras, Articles 1 and 4 (Decreto N° 90 1990, Ley para la Adquisición de Bienes Urbanos en las Áreas que delimita el Artículo 107 de la Constitución de la República de Honduras, Artículos 1 y 4)
Decree No. 968, Declaratory Act, Planning and Development of Tourism Zones, Title V, Chapter V, Article 16 (Decreto No 968, Ley para la Declaratoria, Planeamiento y Desarrollo de las Zonas de Turismo, Título V, Capítulo V, Artículo 16)
Description: Investment
State land, common land, and private land within 40 kilometres of the borders and coastlines, and such land on islands, keys, coral reefs, breakwaters, rocks, and sandbanks in Honduras, can only be acquired, owned or held under any title by persons who are Honduran by birth, by companies fully owned by Honduran nationals, and by state institutions.
Notwithstanding the preceding paragraph, anyone may acquire, possess, hold or lease for up to 40 years (which may be renewed) urban lands in such areas, provided that it is certified and approved for tourist purposes, economic or social development, or for the public interest by the Secretary of State of Tourism (Secretaría de Estado en el Despacho de Turismo).
Anyone who acquires, owns or holds such urban land may transfer that land only with the authorization of the Secretary of State in the Office of Tourism (Secretaría de Estado en el Despacho de Turismo).
Sector: All Sectors
Type of Reservation: National Treatment (Article 10.4) Most Favoured Nation Treatment (Article 10.5)
Level of Government: Central
Measures: Decree No. 131, Constitution of the Republic of Honduras, Title VI, Chapter I, Article 337 (Decreto No. 131, Constitución de la República de Honduras, Título VI, Capítulo I, Artículo 337)
Agreement No. 345-92, Regulation of the Investment Law, Chapters I and VI, Sections 3 and 49 (Acuerdo No. 345-92, Reglamento de la Ley de Inversiones, Capítulos I y VI, Artículos 3 y 49)
Description: Investment
Small-scale industry and trade are reserved for Hondurans.
Foreign investors cannot engage in small-scale industry or trade unless they are naturalized citizens and their country of origin grants reciprocity.
"Small-scale industry and trade" refers to companies with capital, excluding land, buildings and vehicles, of less than 150,000 lempiras.
Sector: All Sectors
Type of Reservation: National Treatment (Article 10.4)
Most Favoured Nation Treatment (Artícle 10.5)
Level of Government: Central
Measures: Decree No. 65-87, dated May 20, 1987, Honduras Cooperatives Act, Title II, Chapter I, Sections 18 and 19 (Decreto No. 65-87, de fecha 20 de mayo de 1987, Ley de Cooperativas de Honduras, Titulo II, Capítulo I, Artículos 18 y 19)
Agreement No. 191-88 dated May 30, 1988, Regulation of the Law on Cooperatives of Honduras, Article 34 (c) and (d) (Acuerdo No 191-88 de fecha 30 de mayo de 1988, Reglamento de la Ley de Cooperativas de Honduras, Artículo 34(c) y (d))
Description: Investment
Non-Honduran cooperatives may establish in Honduras if they receive authorization from the Honduran Institute of Cooperatives (Instituto Hondureño de Cooperativas). Authorization will be granted if:
(a) the country of origin grants reciprocity; and
(b) the non-Honduran cooperative has at least one permanent legal representative in Honduras.
Sector: Customs Agents and Customs Agencies
Type of Reservation: National Treatment (Articles 10.4 and 11.3)
Level of Government: Central
Measures: Decree No. 212-87, Customs Act, Title IX, Chapter I, Section One and Three, Articles 177 and 182 (Decreto No 212-87, Ley de Aduanas, Título IX, Capítulo I, Sección Primera y Tercera, Artículos 177 y 182)
Description: Cross-Border Trade in Services and Investment
Licensed customs agents must be Honduran nationals by birth.
Employees of the customs agent who act on behalf of the customs agent must also be Honduran nationals by birth.
Sector: Agricultural
Type of Reservation: National Treatment (Article 10.4)
Level of Government: Central
Measures: Agreement No. 2124-92, Regulation on Land Adjudication Regulations on Land Reform, Articles 1 and 2 (Acuerdo No. 2124-92, Reglamento de Adjudicación de Tierras en la Reforma Agraria, Artículos 1 y 2)
Description: Investment
Agrarian reform beneficiaries must be Honduran nationals by birth, individually or organized in farm cooperatives or other farm worker enterprises.
Sector: All Sectors
Type of Reservation: National Treatment (Articles 10.4 and Article 11.3)
Level of Government: Central
Measures: Decree No. 255-2002, Administrative Simplification Act, Article 8 Amendments to the Commercial Code, Articles 308 and 309 (Decreto No. 255-2002, Ley de Simplificación Administrativa, Artículo 8 Reformas al Código de Comercio, Artículos 308 y 309)
Description: Cross-Border Trade in Services and Investment
So that a company established under foreign laws can do business in Honduras, it must:
Permanently have at least one representative in Honduras with broad powers to conduct all the required legal transactions and proceedings related to business in Honduras.
Have its own property for the business activity to be conducted in Honduras.
Companies that do not have their legal domicile in Honduras are considered to be established under foreign laws.
Sector: All Sectors
Type of Reservation: National Treatment (Article 10.4)
Level of Government: Central
Measures: Decree No. 549, Section 4, as amended by Decree No. 804, Act of Representatives, Distributors and Agents of National and Foreign Companies (Decreto No. 549, Artículo 4, reformado por Decreto No. 804, Ley de Representantes, Distribuidores y Agentes de Empresas Nacionales y Extranjeras)
Agreement No. 669-79, Regulation of the Law of Representatives, Distributors and Agents of National and Foreign Companies, Section 2 (Acuerdo No. 669-79, Reglamento de la Ley de Representantes, Distribuidores y Agentes de Empresas Nacionales y Extranjeras, Artículo 2)
Description: Investment
Licensees are required to be Honduran nationals or Honduran companies.
Individuals pursuing acting as representatives, agents or distributors must be previously registered as an individual business person. To be considered Honduran, at least 51% of the capital of the company must be held by Hondurans.
Sector: Communications Services – Mail
Type of Reservation: Market Access (Article 11.6)
Level of Government: Central
Measures: Decree No. 120-93, Organic Law of the Postal Office of Honduras, Articles 3 and 4 (Decreto No. 120-93, Ley Orgánica de la Empresa de Correos de Honduras, Artículos 3 y 4)
Description: Cross-Border Trade in Services
The operation of the postal system in Honduras is reserved exclusively for Postal Office Honduran Company (Empresa Hondureña de Correos [HONDUCOR] (1)
Sector: Radio, Television and Newspaper Services
Type of Reservation: National Treatment (Article 10.4)
Senior Management and Boards of Directors (Article 10.8)
Level of Government: Central
Measures: Decree No. 131, Constitution of the Republic of Honduras, Chapter II, Article 73, third paragraph (Decreto No. 131, Constitución de la República de Honduras, Capítulo II, Artículo 73, párrafo tercero)
Decree No. 6, Law of Freedom of Thought Chapter IV, Article 30 (Decreto No. 6, Ley de Emisión del Pensamiento, Capítulo IV, Artículo 30)
Decree No. 759, Law Association of Journalists of Honduras, Article 8, amended by Decree No. 79 of January 1, 1981 (Decreto No. 759, Ley del Colegio de Periodistas de Honduras, Artículo 8, reformado por Decreto No. 79 del 1ero de enero de 1981)
Description: Investment
Only Honduran nationals by birth may hold senior management positions in newspapers or broadcast media (radio and television), including the editorial, political and managerial policy thereof (2)
Sector: Telecomunications
Type of Reservation: National Treatment (Article 11.3)
Level of Government: Central
Measures: Decree No. 185-95, Telecommunications Sector Framework Law Chapter I, Article No. 26 (Decreto No. 185-95, Ley Marco del Sector Telecomunicaciones Capítulo I, Artículo No. 26)
Agreement No. 141-2002 dated December 26, 2002, General Rules of Telecommunications Sector Framework Law, Title III, Chapter I, Article 93 (Acuerdo No. 141-2002 de fecha 26 de diciembre del 2002, Reglamento General de la Ley Marco del Sector de Telecomunicaciones, Titulo III, Capítulo I, Artículo 93)
Description: Cross-Border Trade in Services
Foreign governments may not participate directly in the provision of public telecommunication services.
Sector: Telecomunications
Type of Reservation: National Treatment (Articles 10.4 and 11.3)
Level of Government: Central
Measures: Decree No. 185-95, Telecommunications Sector Framework Law, Chapter I (Decreto No. 185-95, Ley Marco del Sector de Telecomunicaciones, Capítulo I)
Agreement No. 141-2002, General Rules of Telecommunications Sector Framework Law (Acuerdo No. 141-2002, Reglamento General de la Ley Marco del Sector de Telecomunicaciones).
Description: Cross-Border Trade in Services and Investment
Except for the Government of Honduras, no operator or any of its partners with at least a 10% share or any affiliate or subsidiary thereof or anyone belonging to that economic group may hold directly or indirectly more than 10% of the capital of a company authorized to provide said services. Data transmission services are exempt from this provision.
The practice of callbacks involving telephone services provided inside Honduras that systematically originate outside the country as a direct result of international calls not originally completed inside Honduras is prohibited.
To qualify, foreign companies must have an address in Honduras and name a legal representative also domiciled in Honduras.
Sector: Construction or Consulting Services and Related Engineering Services - Civil Engineering
Type of Reservation: National Treatment (Artícles 10.4 and 11.3)
Most Favoured Nation Treatment (Article 11.4)
Market Acces (Article 11.6)
Local presence (Article 11.5)
Level of Government: Central
Measures: Decree No. 47-1987, Organic Law of the College of Civil Engineers of Honduras, Article 67 (Decreto No. 47 1987, Ley Orgánica del Colegio de Ingenieros Civiles de Honduras, Artículo 67)
Regulation of the Organic Law of the College of Civil Engineers of Honduras, Articles 100 (A) – (D) and 101 (Reglamento de la Ley Orgánica del Colegio de Ingenieros Civiles de Honduras, Artículos 100 (A – (D) y 101)
Decree No. 753, Organic Law of the College of Architects of Honduras, Sections 37 (b), (c), (d), (g) and (h) (Decreto No. 753, Ley Orgánica del Colegio de Arquitectos de Honduras, Artículos 37 (b), (c), (d), (g), y (h))
Regulation of the Organic Law of the College of Architects of Honduras, Articles 4 (h), 7 (a), (c), (d) and (h), 13, 68 and 69 (Reglamento de la Ley Orgánica del Colegio de Arquitectos de Honduras, Artículos 4 (h), 7(a), (c ), (d) y (h), 13, 68 y 69)
Decree No. 902, Organic Law of the College of Mechanical, Electrical and Chemical Honduras, Article 40 (c), (d) and (h) (Decreto No. 902 , Ley Orgánica del Colegio de Ingenieros Mecánicos, Electricistas y Químicos de Honduras, Artículo 40 ( c), (d) y (h))
Description: Cross-Border Trade in Services and Investment
Consulting and construction companies must be organized under Honduran law in order to be members of the College of Civil Engineering of Honduras (Colegio de Ingenieros Civiles de Honduras [CICH]) and to carry out civil engineering projects in Honduras. For greater certainty, consulting and construction companies organized under foreign law may register provisionally with the CICH to carry out specific civil engineering projects. Higher membership fees apply to foreign-owned companies. In addition, foreign personnel must be authorized by the CICH in order to work on such projects.
Sector: Distribution Services – Petroleum Products (Liquid Fuel, Automotive Oil, Diesel, Kerosene, and LPG)
Type of Reservation: National Treatment (Article 10.4)
Level of Government: Central
Measures: Decree No. 549, Act of Representatives, Distributors and Agents of National and Foreign Companies, Chapter I and VI, Articles 4 and 2 (Decreto No. 549, Ley de Representantes, Distribuidores y Agentes de Empresas Nacionales y Extranjeras, Capítulo I y VI, Artículos 4 y 2)
Decree No. 804, Amending Article 4 of the Act of Representatives, Distributors and Agents of National and Foreign Companies (Decreto No. 804, reforma el Artículo 4 de la Ley de Representantes, Distribuidores y Agentes de Empresas Nacionales y Extranjeras)
Description: Investment
Only Honduran nationals and companies organized under Honduran law may be authorized to sell petroleum products. Companies must be at least 51% owned by Honduran nationals.
Sector: Electricity
Type of Reservation: Market Access (Article 11.6)
Level of Government: Central
Measures: Decree No. 158-94 dated November 26, 1994, Framework Law under the Electricity Sub-Sector, Chapter V, Article 15 (Decreto No. 158-94 de fecha 26 de noviembre de 1994, Ley Marco del Sub-Sector Eléctrico, Capítulo V, Artículo 15)
Description: Cross-Border Trade in Services
Only the Honduran government, through the National Electricity Company (Empresa Nacional de Energía Eléctrica), may transmit electricity or operate the electricity transmission system and dispatch center.
Sector: Lotteries
Type of Reservation: Market Access (Article 11.6)
Level of Government: Central
Measures: Decree No. 438, dated April 23, 1977, Article 5 (c), Organic Law of the National Child Welfare Fund (Decreto No. 438, de fecha 23 de abril de 1977, Artículo 5 (c), Ley Orgánica de Patronato Nacional de la Infancia)
Description: Cross-Border Trade in Services