Roatán, Honduras, September 19, 2024 - The potential decision by the Supreme Court of Justice to declare the Law of Zones for Employment and Economic Development (ZEDE) unconstitutional with retroactive effect would have serious repercussions for the country, undermining its democratic and economic stability.
The overwhelming majority of Honduran legal scholars regard the retroactive application of any judicial ruling to extinguish jobs and investment as contrary to well-established Honduran law. Such a ruling would not only create a climate of insecurity and uncertainty for investors and employees, but it would also empower wholesale persecution of opposition parties for the supposed “crime” of voting for a law that has created more than 8,000 good-paying Honduran jobs and attracted over $300 million in investments to Honduras.
There is nothing to gain from such a ruling. A ruling that retroactively invalidates ZEDE investment would undeniably ripen claims of expropriation and defeat pending defenses raised by the State of Honduras to international arbitration claims. A ruling that deviates from decades of unbroken Honduran precedent would have no legitimacy.
Over 100 American investors have capital committed to these projects. The citizens of more than 20 countries are doing business in Prospera and other ZEDEs. On the international front, such a decision would gravely damage relations with the United States and many other countries, leading to sanctions, including the denial of visas, aid, and even remittances. In fact, dozens of members of Congress from both parties in the United States have already expressed concern about the possible expropriation of ZEDE investments.
The stability of the national financial system would also be at risk, as several Honduran banks have active loans tied to projects in the ZEDEs. The economic impact of a retroactive decision could increase the country's risk profile, raising financing costs for Honduras and hindering long-term economic growth.
In summary, an unprecedented decision of this magnitude would jeopardize the progress and opportunities that Honduras needs. We urge reasonable people to instead seek solutions that ensure stability, investment, and well-being for all Hondurans.
For more information, please contact:
Próspera is a governance platform that powers the development of new cities in special economic zones. Próspera’s pro-business framework and system of regulatory choice ensures that companies can operate under the most favorable regulatory conditions in the world.
Back to Newsroom
