Tariff Classification Tariff classification is based on the Harmonized Commodity Description and Coding System generally referred to as the Harmonized System.

Valuation Imported items are subject to an ad valor em duty based on the CIF value of the item.

Tariff Ranges and Charges As a member of the System of Central American Integration (formerly Central American Common Market - CACM comprised of Costa Rica, El Salvador, Guatemala, Nicaragua and Honduras) Honduras has a common external tariff schedule in which customs duties range from a maximum of 20% ad valor em with a minimum tariff of 5%, with certain exceptions including apparel.

There are additional taxes in addition to the ad valor em or CIF duties, including: (a) 5% on raw materials and 10% on manufactured products; (b) 20% surcharge on all imported goods, with the exceptions of medicines, serums, powdered mild, vaccines, basic grains, seeds, fertilizer, fungicides and cattle; and (c) 5% on all imports to cover administrative customs services.

The Import Declaration includes a L. 50.00 Honduran Lempiras form fee. A handling fee of L.0.05 per kilogram is also included. Customs warehouse charges are obligatory after one month use. Other charges include a 7% sales tax, a 3% administration charge, and a 30% tax on selected luxury items.

Temporary Entry The temporary entry law allows exporters to introduce raw materials, parts, and capital equipment into Honduran territory without payment of customs duties or consular fees when the final product of the process is exported outside Central America. The law also provides a ten- year tax holiday on profits from these exports. Companies that do not operate in free trade zones or export processing zones fall under the jurisdiction of the Temporary Import Law.

Free Trade Zones and Warehouses The principal free trade zone in Honduras is located in Puerto Cortes and is operated by the Government of Honduras through the National Port Authority. Privately owned free trade zones are legal extensions of the free trade zones. In addition, individual companies may obtain the benefits of free trade zone status if they are located in specially designated areas.

Labeling, Marking, and Packaging Requirements There are no special requirements regarding the marking of country of origin of goods or the labeling of general merchandise. There are, however, labeling requirements for some food stuffs and pharmaceutical.


INCENTIVES

Honduras'Trade Agreements and Preferences As a beneficiary of both the CBI and Generalized System of Preferences, most of exports enjoy duty-fee entry into the U.S. The major products exempt from CBI preferences are textiles, apparel, watches and petroleum products. Under the CACM (Central American Common Market), Honduras applies a common external tariff ranging from 5 - 20% on most products of non-CACM origin. In addition, Honduras receives duty-free access to the markets of other CACM countries for most products.