In light of the Honduran Supreme Court's 8-7 ruling on Friday, September 20, 2024, purporting to deem unconstitutional the ZEDE Organic Law and Constitutional Amendments, new terms of service and a rider have been adopted allowing for continued operations to the maximum extent that would be lawful under any foreseeable ultimate ruling.

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From what little we know, the decision appears to have been more than unprecedented, it was anti-precedential. It overruled a 2014 decree of the same Supreme Court upholding the ZEDE framework and also a 2021 administrative act of the same Supreme Court implementing the judicial division of the ZEDE framework.

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Serious questions exist as to:

• The nature and extent of political and other types of pressure to issue the ruling;
• The existence of jurisdiction to hear the challenge;
• Compliance with international principles of due process with respect to the deprivation of the rights of thousands of people and hundreds of businesses;
• The authority of the Court to issue a ruling with retroactive effect;
• Apparent disregard of decades of unbroken past decisions protecting existing investment in reliance upon a facially valid legal framework (acquired rights doctrine);
• And many other issues that we are still assessing.

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The narrowly-decided decision may yet be moderated. It might not be as broad as it appears. It might not foreclose reconsideration, procedural, or future substantive challenges to its enforcement. And, of course, it may be patently erroneous and abusive in all dimensions and yet, because the Supreme Court is the final word over matters within its competence, effectively final, leaving no recourse other than in international venues, such as ICSID. All of these aspects are currently unknown.

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Please allow us some time to obtain the final and published draft of the ruling, analyze the ruling, and determine our response to it. In the interim, our previous well-founded legal analysis is discussed below.

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What is Próspera?

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Próspera is a public-private partnership consisting of two aspects.

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The first aspect of Próspera is the ZEDE itself, or the zone of employment and economic development known as “Próspera ZEDE.” Próspera ZEDE is a local government and a political and administrative subdivision of Honduras, similar to a municipality, as defined by Article 329 of the Honduran Constitution. Próspera ZEDE operates under and within the jurisdiction of the Republic of Honduras. As such, Próspera ZEDE is not a private, for-profit city. It is a public body that functions in partnership with its private organizer during its founding.

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The second aspect of Próspera is the world-class, decentralized governance system that powers Próspera ZEDE’s business-friendly environment. This consists of intellectual property and infrastructure, as well as organizational, dispute resolution, and administrative services; i.e. what is called the Próspera Platform. The Próspera Platform is furnished by Honduras Próspera Inc., the zone’s U.S.-based promoter and organizer (and its affiliates). The Próspera Platform includes the initial real estate incorporated into ZEDE, the research and development of the ZEDE’s public policy framework, the eGovernance software, registries, and databases, and the administration of public services and authorities under contract with the ZEDE.

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Taken together, Próspera ZEDE is best conceptualized as a free trade zone in Honduras which is uniquely optimized by Honduras Próspera Inc. to protect human rights, to encourage investment by domestic and international companies, and to creategood-paying Honduran jobs. It is the only free trade zone in Honduras organized and developed by a U.S. Company that has attracted more than $120 million in U.S. private investment. It is the only free trade zone in Central and South America that has adopted English and Spanish as official languages, U.S. common law for commercial and civil transactions, high integrity dispute resolution, and innovation-friendly free market regulatory policy.

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As such, with the zone’s governance framework providing legal certainty and a streamlined regulatory environment, Próspera allows for innovation, collaboration, and development on a global scale; while also creating incredible economic opportunities for the local population. More than 70testimonials from Hondurans who currently benefit or have benefitted from Próspera ZEDE are available here.

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You can learn more about the legal status and economic impact of Próspera ZEDE by reviewing the relevant portions of the Honduran Constitution and the Próspera ZEDE Amended Charter; a Spanish translation of the entire Honduran Constitution; academic studies available here and here; and public policy analyses available here, here, and here.

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Does Próspera ZEDE operate outside of Honduran laws?

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No, Próspera ZEDE operates within the Honduran legal system. It is subject to the Honduran Constitution, national treaties, criminal laws, and other aspects of sovereign Honduran law. Próspera can create and has created local rules in areas like commercial and civil law, industrial, financial, and occupational regulation, labor law (compliant with the conventions of the International Labour Organization ratified by Honduras), and environmental regulation, but these rules must be approved by the national oversight body, CAMP (Committee for the Adoption of Best Practices), and are designed to stimulate economic growth and job creation. For more details, see the Próspera ZEDE Charter.

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Is Próspera ZEDE a “state within a state” with its own judicial system?

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No, Próspera ZEDE is a special jurisdiction similar to a municipality, not a separate state. It cannot establish its own judicial system (in fact, the Honduran Supreme Court of Justice directly created the ZEDE division of the Honduran judicial system through Accord No. CSJ-01-2021). Human rights principles of the Honduran Constitution and national laws related to sovereignty, and territory remain fully in force. Learn more here.

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Can Próspera businesses choose their regulatory framework?

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Próspera provides a flexible andincentive-based regulatory environment designed to foster innovation while ensuring optimal levels of safety.

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Regulatory Framework Options: Businesses in Próspera operate primarily under common law liability principles, which incentivize voluntary adoption of best practices and regulatory standards. This system encourages businesses to adopt due care based on their specific market needs while maintaining accountability for any harm caused.

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Additional Statutes: All businesses must also comply with key statutes, including the Coral Reef Protection Statute, the Hazard Precaution Statute, the Labor Statute, and the Industrial Regulation Statute, and their various amendments. The Industrial Regulation Statute prohibits conduct that is likely to cause injury and allows for significant remedies in case of violations, including piercing the corporate veil and imposing triple damages.

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Reciprocity and Safe Harbor: Businesses operating in traditionally regulated industries can benefit from a safe harbor if they adhere to relevant regulations in greater Honduras or in one of 35 other countries with equivalent or better regulatory frameworks. Additionally, businesses can propose new "optimal regulations" to the Technical Secretary and Council of Trustees, provided these regulations offer protections at least as effective as those in the benchmark countries.

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Does Próspera ZEDE lack environmental protection regulations?

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No, Próspera ZEDE has strong environmental protections, such as the Coral Reef Protection Statute and the Hazard Precaution Statute, which, together with the Industrial Regulation Statute and traditional common law liability for public and private nuisances, safeguard Roatán’s unique ecosystem and implement various treaties concerning the protection of the environment. These regulations create strong incentives favoring environmental stewardship without unduly impeding job creation or economic development. One of the most powerful aspects of Próspera ZEDE’s environmental protections is that they can be enforced by all (e)Residents, not just governmental agencies.

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Is (e)Residency in Próspera only for the wealthy?

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No, Próspera offers various levels of (e)Residency to suit different needs. Limitede-Residency is free for both visitors and low income workers, while both fulle-Residency and physical Residency now cost only $130 per year (the latter was reduced on September 3,2024 from $260 per year for Honduran nationals and $1,300 annually for foreigners). Keeping in mind these very recent fee reductions, more details are available on our e-Residency page.

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What is the Agreement of Coexistence, and why is it required?

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An Agreement of Coexistence reinforces the legitimacy of governance and the legal certainty that Próspera provides, while also ensuring transparency and respect for residents' rights. For anyone entering Próspera ZEDE, it is mandated by Article 10.1 of the ZEDE organic law, which is intended to ensure that anyone entering the zone is aware that they are entering into an area that may have different local laws than elsewhere in Honduras. In Próspera ZEDE, we also believe the agreement is the quintessential proof of consent of the governed. It ensures the social contract is literal, not figurative. This means governance in Próspera ZEDE has a degree of legitimacy and popular sovereignty not found anywhere else in the world. The requirements of the agreement are no more burdensome than those required to obtain a passport or driver’s license, to enter Disney World, or to fly on a plane. Moreover, as shown here, the agreement promises high quality public services and contractually guarantees the legal rights of (e)Residents; also allowing for discounted access to dispute resolution services furnished by the Próspera Arbitration Center.

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Do businesses in Próspera ZEDE pay local taxes?

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Yes, businesses in Próspera ZEDE pay taxes and fees to the ZEDE, which is apolitical subdivision of Honduras. The national government receives 12% of these revenues, even though it does not provide local public services to Próspera. Tax and fee revenues have been doubling annually since 2019. Learn more about our tax structure here.

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Can disputes in Próspera only be resolved through the Próspera Arbitration Center?

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No, the Próspera Arbitration Center (PAC)is just the default option if no other agreement has been made. Residents and businesses can choose alternative arbitration services or courts, such as the International Center for Dispute Resolution of the American Arbitration Association. But we expect most (e)Residents will be happy to choose the PAC because of its world class roster of high integrity retired U.S. jurists, experienced international litigators, and legal experts, all of whom serve as arbitrators. The PAC is required to resolve all cases within a year, with many resolved in 60 days or less. This allows Honduras to immediately elevate its justice system to world-class standards. Lastly, it should be noted that dispute resolution by arbitration is not imposed by the ZEDE framework. In a country riven by corruption, arbitration is a favored means of dispute resolution in Honduras. For example, Article 110 of the Honduran Constitution expressly protects the right to dispute resolution by arbitration. You can read more about dispute resolution in Próspera here.

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Is Próspera ZEDE an opaque tax haven like the Cayman Islands?

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No, Próspera ZEDE is committed to transparency.

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The National Congress of Honduras approved an independent tax regime for the ZEDEs, designed to follow a low-tax policy. Accordingly, Próspera ZEDE collects its taxes in line with the minimum and maximum thresholds set by the ZEDE Organic Law.

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All official deliberations (see, e.g., here), rules, and regulations are publicly accessible, and Council meetings are broadcast online. Próspera operates openly, allowing residents to participate in governance. Visit our public records here.

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Does Próspera operate experimental medical facilities? How does Próspera handle health industry regulations?

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First of all, Próspera does not “operate experimental medical facilities.” Próspera ZEDE is a jurisdiction. The Próspera Platform is the governance system for that jurisdiction. A handful of businesses operating in Próspera ZEDE on the Próspera Platform are running clinical trials.

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Secondly, with few exceptions, clinical trials are generally classified as part of the Health Industry, which is regarded as a traditionally regulated industry. This means that the entire suite of regulatory requirements and exposures applicable to Health Industry participants apply to those who run clinical trials. Although the applicable regulatory system is designed to promote innovation and entrepreneurialism, and avoid burdensome compliance requirements, it is nevertheless strongly protective of safety. Anyone threatening injury or a violation of the law can be enjoined by Próspera agencies or (e)Residents. Anyone causing injury in violation of their legal duties through a clinical trial is exposed to 3xdamages and piercing the corporate veil unless they are operating in good faith compliance with the regulatory framework of one of the 36 recognized Best Practice Countries (including the USA-FDA) or an approved optimal regulation (such as the Próspera Health Services Regulation A, which is heavily influenced by FDA standards). Compliance with such prescriptive regulation is overseen by the Próspera Health Industry Committee, which is populated by international medical experts.

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Regulatory insurance is required and compliance must be periodically certified by field experts and verified by insurance auditors; otherwise, the provider faces suspension or shut down. Relevant Próspera regulatory policies are available here.

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Does Próspera have its own set of labor systems?

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Próspera ZEDE is subject to applicable treaties and constitutional principles governing labor relations, including ILO standards. The ZEDE Organic law also imposes a number of labor law requirements, including allocating to Hondurans a minimum percentage of jobs and salaried compensation. Próspera ZEDE’s labor statute (available here) is expressly nested in this wider regulatory context. The Próspera Labor Statute meets all mandates imposed by these external standards, while also innovating as much as possible in the gaps that exist or with the policy implementation latitude provided. Within that context, it is important to underscore the governance zone guarantees civil liberties at not less than U.S. levels (and at least equal to that required by international and domestic national law), a minimum wage 10%-25% more than the surrounding national minimum wage,employer-funded UBI-like portable labor benefits that the employee owns and can use for any social welfare purpose, and union formation as easy as forming a corporation. Learn more here.

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Is Próspera considered a separate territory for the benefit of foreigners?

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The ZEDE framework was designed and adopted by Hondurans to uplift Hondurans. The establishment of particular zones in the ZEDE framework, such as Próspera ZEDE,was approved by the Honduran public officials appointed by the Executive and Legislative Branches of the national government to a Honduran national agency known as CAMP. In particular, Próspera ZEDE was established in December 2017under its original name, “ZEDE Village of North Bay,” by an administrative act of the national oversight agency known as “CAMP,” under Article 39 of the ZEDE organic law and the governing constitutional amendments of Honduras. The applicant for the establishment of this special jurisdiction was the parent company of a Delaware limited liability company, later known as “Honduras Próspera LLC.” This company was approved by CAMP in August 2018 as the promoter and organizer of the ZEDE, together with the zone’s original charter. The limited liability company was subsequently converted into the Delaware corporation now known as “Honduras Próspera Inc.” in December 2020.Consequently, the land incorporated into Próspera ZEDE is not a separate "territory" but rather part of Honduras under a special jurisdiction overlay, similar to how U.S. cities can have multiple special districts or how Honduran municipalities can enact their own ordinances (local laws) without being considered separate territories.

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Do residents in Próspera ZEDE vote democratically or based on the amount of land they own?

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This question poses false alternatives and requires greater consideration of the zone’s innovative governance structure.

First of all, Próspera ZEDE operates on the principle of true consent of the governed. Living and working in Próspera ZEDE is 100% voluntary. Every resident votes “with their feet” and contractually via the zone’s Agreement of Coexistence for the entire governance structure and leadership when they choose to become a resident. If a person does not agree with Próspera’s governance structure or leadership, they can avoid it by choosing not to become a resident.

Secondly, Próspera’s governance system is designed as a public trust, incorporating strong checks and balances, human rights guarantees, and eventual robust democratic participation. Currently, Próspera ZEDE is represented by a Technical Secretary whose decisions are reviewed and approved by a local Council of Trustees. This council has nine seats, one of which is held by the Technical Secretary. It is true that during a transitional phase of low density population, as the zone is being established, landowners fill two of these seats, and are entitled to one vote for each square meter of land they own. But during the same time frame, residents have the right to fill two seats as well, voting on a one vote per person basis. Once the population reaches high density, residents will assume the right to fill the seats currently assigned to landowners, controlling four seats on the council, and the right to repeal any rule by referendum, in addition to the right to nominate the Technical Secretary, subject to CAMP’s approval. This means that once the zone is up and running after a transition period, residents will select a majority of the public officials responsible for lawmaking.

Thirdly, enforcement of these checks, balances, and democratic civil rights is institutionally protected. When Próspera ZEDE reaches a population of 1,000natural person residents, CAMP will appoint an ombudsman to ensure compliance with the governing laws and the “Resident Bill of Rights,” modeled after the U.S. Bill of Rights. Residents will also have the power to replace the ombudsman by referendum.

Fourth and last, the initial design of Próspera ZEDE is not forever. Próspera’s charter can be amended by referendum after 2054, ensuring ongoing democratic involvement for future residents. Full details on Próspera’s governance can be found here in sections 1.02, 3.04, 3.09, 3.11,4.03, 6.03, 11.08, and 11.09 of the Próspera Charter.

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Does development in Próspera follow accredited international standards for design, construction, building codes, and worksite safety?

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There are powerful incentives for any development project to comply with optimal standards of safety by virtue of the default liability principle imposing on developers a duty of “reasonable care” under the common law, the absence of liability limitations for worker injuries, the prohibition of the Industrial Regulation Statute on the developer creating a likelihood of injury, as well as the prescriptive requirements of any best practice regulatory framework under which the developer elects to operate. These standards are not left to threats of litigation or the developer’s best judgment alone. The regulatory insurance system applicable to most construction projects requires periodic compliance certifications and third party compliance audits. And the zone’s General Service Provider, the Technical Secretary in his capacity as Labor Inspector, and every (e)Resident has standing to enforce these reasonable safety standards.

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How many people are physical or e-Residents of Próspera?

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 As of August30, 2024, there are 1,793 natural person (e)Residents (including 79 natural person full-time Residents, 443 e-Residents, and 1,271 limited e-Residents) and230 registered legal entity (e)Residents.

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How many and what types of businesses are operating in Próspera?

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Próspera is home to over 220 registered businesses spanning a wide array of industries. These include cutting-edge medical clinics, high skill remote work, innovative schools, a variety of food service providers, top-tier hospitality services, and state-of-the-art sporting facilities. In addition, Próspera is a hub for emerging technologies, with businesses offering drone delivery services and pioneering robotic manufacturing companies. Other essential services, such as professional cleaning and real estate development, also contribute to the diverse and thriving business ecosystem in Próspera. This dynamic mix of industries reflects Próspera’s commitment to fostering innovation, entrepreneurship, and economic growth.

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Is Próspera undermining the sovereignty of Honduras or violating its Constitution?

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No, Próspera operates fully within the framework of Honduran law, specifically under the ZEDE (Zones for Employment and Economic Development) constitutional amendments and organic law, which was enacted by the Honduran Congress in 2013,and guaranteed by the Kuwait-Honduras Bilateral Treaty, CAFTA-DR, and express sovereign legal stability agreements for at least 50 years. Article 1 of the ZEDE Organic Law explicitly states that ZEDEs are an integral part of the national territory of Honduras, affirming the country’s sovereignty. The law grants a level of legal autonomy to attract foreign investment and stimulate economic growth while protecting human rights, leading to over $150 million in investments and the creation of nearly 4,000 jobs for Hondurans.

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Is Bitcoin or other cryptocurrencies accepted as legal tender in Próspera?

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According to Article 30 of the ZEDE Organic Law, ZEDEs must ensure the free movement of capital within, into, and out of their jurisdictional area. In this regard, yes, “Qualifying Cryptocurrencies,”including Bitcoin, are widely accepted by businesses in Próspera. Most businesses in Próspera also accept traditional fiat currencies, providing a flexible payment system for residents and visitors alike. Additionally, residents can use Bitcoin and approved digital currencies to pay fees and taxes. Bitcoin also serves as a unit of account in Próspera ZEDE, as outlined in the Próspera Tax Statute 2019. This ensures that Bitcoin can be used for accounting purposes and for calculating taxes.

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How does Próspera incorporate land into its jurisdiction?

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Próspera incorporates land into its jurisdiction through a voluntary process initiated by the landowner. The process is entirely consensual and adheres to Honduran law. The ZEDE began with the voluntary incorporation of 4.7 acres in Roatán in December 2017, followed by the addition of 53.3 adjacent acres by the end of2019. Since then, landowners have incorporated 238.63 acres in Port Royal and384.76 acres near La Ceiba by the end of 2021, along with 322 acres in Pristine Bay by January 2022. Several smaller properties have also been integrated in to the ZEDE. You can view all incorporated properties on the Próspera Land Registry here: Próspera Land Registry (user/password: public).

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Can Próspera expand its jurisdiction through expropriation?

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No, Próspera cannot and will not expand its jurisdiction through expropriation. All land within Próspera’s jurisdiction has been acquired through voluntary transactions. This is confirmed by official documents from both the Honduran Judicial Branch, which found no expropriations by ZEDEs (Confirmation, September14, 2022), and the Honduran Secretary of State's Human Rights Office, which confirmed no human rights violations by ZEDEs (Confirmation, October 25, 2022). In fact, Próspera ZEDE was carefully organized to provide the world’s strongest guarantees of human rights, including property rights. This commitment is reinforced by a resolution that explicitly states it is impossible to use the power of expropriation to expand its jurisdiction. It is further reinforced by CAMP, the national agency overseeing the ZEDE system, which has promulgated its own regulation that strictly limits what use of expropriation or eminent domain it would ever approve, and it denies any ZEDE local government unilateral authority to expropriate to expand its boundaries.

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In contrast, ordinary Honduran municipalities and the state of Honduras pose a much greater threat of expropriation than Próspera ZEDE or any ZEDE. After all, the Honduran national government reserves the power of eminent domain no matter what the governing bodies of Próspera ZEDE would prefer on this policy point. But Article 28 of the ZEDE Organic Law limits this otherwise broad inherent expropriation power of the Honduran national government by requiring the additional concurrence of CAMP. This makes it more difficult for the national government to use expropriation to expand the jurisdiction of a ZEDE than to use expropriation for any other policy goal.

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Does Próspera provide private security for its properties and residents?

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Security within Próspera is managed through a combination of local law enforcement and private security personnel. The Próspera Charter and Rules have established a police department that is supervised by the Council’s Law Enforcement Committee. However, this police department has not yet been populated, as all property within Próspera ZEDE is private property. Currently, the General Services Provider handles security, including access control, under its public service contract, which imposes the same due process protections on its private security personnel as would be applicable to public police. Additionally, private property owners may provide their own internal security at their expense. A Police Chief is expected to be appointed soon to further develop the police department.

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Does Próspera ZEDE lack support among Hondurans or face significant opposition from neighboring communities?

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More than 70 testimonials from local Hondurans attest to how neighboring communities and the country as a whole have benefitted from Próspera ZEDE. Among Hondurans who follow the ZEDE issue, support for Próspera ZEDE outstrips opposition by 4 to 1. In contrast, the organized opposition to Próspera ZEDE is typified by ARCAH, a fringe newly-minted organization of self-described Marxists, which has been publicly supported in its attacks on the zone by the ambassadors of China, Venezuela, and Cuba. For this reason, the supposed opposition to Próspera ZEDE appears to be more of an artificial ideological construct or a geo-political gambit by foreign adversaries of the U.S., not an organic movement.

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This assessment has been confirmed by Virginia Mann, a prominent resident of Crawfish Rock, who has publicly stated that only a tiny, politically connected elite of her local community opposes ZEDEs. This clique does not represent the broader community's views. Moreover, polling data from January and February 2022 by CID-Gallup shows that a fringe minority (0.5% - 3%) of the Honduran electorate voted for the current administration to repeal ZEDEs. Informal television text polling during the2021 election year (here and here) also evidenced that nearly 80% of Hondurans saw the issue as a political distraction. Additionally, a September2023 survey of 1,583 voting-age Hondurans revealed that less than 1% believe repealing ZEDEs should be a major priority for Honduras. In fact, this survey shows that 61.93% of Hondurans believe that Próspera ZEDE is beneficial for the country, 63.3% think it is creating new job and business opportunities, and a majority express a desire to work or start a business within ZEDEs.

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Recent polling conducted by Macrodato further solidifies this sentiment, showing that 72.1% of Hondurans support ZEDEs as a solution to combat unemployment. Moreover, 58.2% of respondents believe that ZEDEs have played a decisive role in creating employment in the areas where they operate, a significant increase from 37% last year. This represents a clear 3 to1 advantage, indicating that Hondurans overwhelmingly support the well-payingjobs that Próspera offers. Opposing the job creation efforts of ZEDEs is not aligned with the desires of the Honduran people. These findings, endorsed by Macrodato, clearly indicate that Hondurans want the opportunities and economic growth that Próspera brings. You can view the entire polling data here.

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How does Próspera engage and inform neighboring communities?

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More than 70 testimonials from local Hondurans evidence that local knowledge and understanding of the benefits of Próspera is widespread. This level of support arises from Próspera’s commitment to transparency and active engagement with neighboring communities through multiple channels:

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Employment: Many residents from surrounding communities work within Próspera, providing them with direct insights into its operations and fostering a mutual understanding.

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Town Hall Meetings: Regular town hall meetings are conducted to discuss updates and address any concerns from local residents.

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Public Website: All relevant documents and information about Próspera’s activities are available on its public website.

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Volunteer Program: Próspera runs a comprehensive volunteer program aimed at engaging with the local community through a wide range of activities, including beach cleanups, entrepreneur fairs, and national holiday celebrations.

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This multifaceted approach ensures that neighboring communities are informed, involved, and positively impacted by Próspera’s initiatives.

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Has the government of Honduras declared ZEDEs, including Próspera, to be illegal?

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No, as publicly determined by Deloitte Legal, and the prominent regional law firm of Aguilar, Castillo and Love, among others, Próspera ZEDE continues to operate lawfully in Honduras. While the ZEDE Organic Law has been repealed, the ZEDE amendments to the Constitution were not repealed due to the failure of the subsequent legislative session in 2023 to ratify Decree32-2022.

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As a result, the ZEDE constitutional amendments remain in effect. Although the ZEDE Organic Law is repealed, it continues to apply to residents and investors with acquired rights, as stipulated in Article 45 of the Law, Article 2370.18 of the Civil Code, and Article 96 of the Constitution.

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Existing ZEDEs, such as Próspera, are protected for a minimum period of 50 years from any changes to the ZEDE regime. Próspera ZEDE enjoys special legal stability guarantees under the Kuwait-Honduras Bilateral Treaty, applicable to U.S. investors through themost-favored-nation provision of CAFTA-DR.

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Additionally, a solemn sovereign legal stability agreement, authorized by Article 12(2) of the ZEDE Organic Law, reinforces the 50-year legal stability guarantee. Importantly, efforts to repeal the constitutional authority for Próspera ZEDE have failed, maintaining its constitutional foundation. The Honduran Supreme Court has upheld the ZEDE Organic Law twice, including in June 2021, when it created the ZEDE court system.

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These protections are reinforced through the ZEDE Organic Law, which ensures a minimum transition period of at least 10 years or the duration of any legal stability agreement, safeguarding the rights of residents. Even though there is political pressure from the current administration to reverse these rulings, any future court decision deeming the ZEDE regime unconstitutional would not have retroactive effect. Under established Honduran law, such a ruling would not affect the constitutional autonomy already recognized for existing ZEDEs.

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Why Have So Many U.S. Lawmakers Stepped-Up to Protect Próspera?

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Attacks on Próspera ZEDE indirectly expropriate U.S. private investment in the zone by violating a solemn sovereign 50-year legal stability guarantee backed by the Kuwait-Honduras Bilateral Treaty, CAFTA-DR, and express sovereign legal stability agreements. Naturally, Próspera has garnered support from dozens of lawmakers from across the political spectrum, emphasizing the importance of legal stability, international investment protections, and economic opportunities for Hondurans. The bipartisan pro-Próspera members of the United States Congress have repeatedly expressed strong concerns over the current administration's attacks on U.S. investment and economic development in Próspera ZEDE.

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From a U.S. lawmaker’s perspective:

• Próspera reduces lawless migration to the U.S. by enabling world-class institutions tobe quickly established in Honduras.

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• Próspera empowers U.S. businesses to outcompete Chinese incursions in the Western Hemisphere without taxpayer funding.

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• Próspera is an optimal nearshoring site for U.S. companies seeking to relocate their supply chains away from distant places.

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Are Honduran public officials acting lawlessly by attacking Próspera ZEDE?

Yes, public officials who undermine Próspera ZEDE are acting outside the bounds of Honduran law and international agreements. ZEDEs are constitutionally protected, and attempts to violate these protections with respect to Próspera breach both national and international legal frameworks, including the Kuwait-Honduras Bilateral Treaty, CAFTA-DR, and express sovereign legal stability agreements. These actions not only jeopardize investments but also expose Honduras to significant legal and financial liabilities. A former Senior Attorney for ICSID has laid out the exposures faced by the national government of Honduras here.

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Are Honduran PEPs shareholders in Honduras Próspera Inc., the private organizer and promoter of Próspera ZEDE?

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No, Honduran Politically Exposed Persons (PEPs) are not owners of Honduras Próspera Inc. (“HPI”). For several years, Deloitte Legal has conducted an independent review of HPI’s policies and procedures related to anti-corruption andanti-money laundering (AML/KYC) regulations. Their findings have repeatedly confirmed that none of HPI’s shareholders are listed in international blacklists related to criminal activities, and none of them are considered Honduran Politically Exposed Persons (PEPs).

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