Civil Strife Damage - Property or income losses from domestic political violence, including hostile actions by national forces, civil war, revolution, insurrection, or politically motivated terrorism or sabotage. (MIGA)
Country Risk — A collection of risks associated with investing in a foreign country. These risks include political risk, exchange rate risk, economic risk, sovereign risk and transfer risk, which is the risk of capital being locked up or frozen by government action. Country risk varies from one country to the next. Some countries have high enough risk to discourage much foreign investment. (Investopedia)
Creeping Expropriation — A series of events by a government (or a subsovereign entity) that results in a deprivation of the investor’s rights. (MIGA)
Convertibility - The ease with which a country’s currency can be converted into gold or another currency. Convertibility is extremely important for international commerce. When a currency in inconvertible, it poses a risk and barrier to trade with foreigners who have no need for the domestic currency. (Investopedia) For opposite see “Inconvertibility.”
Expropriation — An action whereby a government seizes property of assets of the foreign investor without full compensation to the investor. This is also referred to as ‘ownership risk’ or nationalization. (MIGA)
Foreign Direct Investment (FDI) - An investment abroad, usually where the company being invested in is controlled by the foreign corporation. (Investopedia)
Government Risk Index (GRI) - An index of the CDS spreads of the United States, United Kingdom, Germany, France, Italy, Spain and Japan.
Inconvertibility - The risk that an investment’s returns could suffer as a result of political changes or instability in a country. Instability affecting investment returns could stem from a change in government, legislative bodies, other foreign policy makers, or military control. (Investopedia)
International Oil Company (IOC) - a privately-owned oil company. E.g. ExxonMobil, BP, Royal Dutch/Shell.
Macro-Level Political Risk - A type of political risk in which political actions in a host country can adversely affect all foreign operations. Macro risk can come about from events that may or may not be in the reigning government’s control. (Investopedia)
Micro-Level Political Risk - A type of political risk that refers to political actions in a host country that can adversely affect selected foreign operations. Micro risk can come about from events that may or may not be in the reigning government’s control.(Investopedia)
Multilateral Investment Guarantee Agency (MIGA) — a member of the World Bank group. It was established to promote foreign direct investment into developing countries. MIGA was founded in 1988 with a capital base of $1 billion and is headquartered in Washington, DC. (Wikipedia)
National Oil Company (NOC) - a state-owned oil company. E.g. Aramco, Petrobras.
Overseas Private Investment Corporation (OPIC) - A U.S. government agency that assists businesses looking to invest abroad. Operated out of Washington, D.C., the Overseas Private Investment Corporation (OPIC) helps companies investing overseas analyze and manage risks and tries to promote development in emerging markets in addition to supporting domestic foreign policies.
Paris Club — is an informal group of financial officials from 19 of the world’s richest countries, which provides financial services such as debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors. (Wikipedia)
Political Risk — Probability of loss due to political instability in the buyer’s country that may result in cancellation of a license or otherwise affect the buyer’s ability to make payments. Political risks are insurable risks, and overlap with the political component of force majeure risks. (Business Dictionary)
Political Risk — The risk of nonpayment on an export contract or project due to action by an importer’s or buyer’s host government. Such action may include intervention to prevent the transfer of payments, cancellation of a license, or acts of war or civil war. Nonpayment by sovereign buyers themselves is also a political risk. Political risk is one of the two main categories of risks insured by credit insurers (the other being commercial risk). (Export Finance Guide)
Political Risk — The risk of operating or investing in a country where political changes may have an adverse impact on earnings or returns. This concerns not only politically unstable countries, but also places where normal democratic procedures may bring about a change of government and thus a possible negative change in policy (e.g.: on tax, regulatory constraints; tariffs, etc.) (FT)
Political Risk - The risk of loss due to default on export credits arising from political causes, such as currency non-convertibility, expropriation of the obligor, government interference, war or revolution, etc. (GlossaryonTrade)
Political Risk - The risk of loss when investing in a given country caused by changes in a country’s political structure or policies, such as tax laws, tariffs, expropriation of assets, or restriction in repatriation of profits. For example, a company may suffer from such loss in the case of expropriation or tightened foreign exchange repatriation rules, or from increased credit risk if the government changes policies to make it difficult for the company to pay creditors. (Investorwords)
Political Risk - Political risks are associated with government actions which deny or restrict the right of an investor/owner (i) to use or benefit from his/her assets; or (ii) which reduce the value of the firm. Political risks include war, revolutions, government seizure of property and actions to restrict the movement of profits or other revenues from within a country. (MIGA)
Political Risk - The risk of nonpayment on an export contract or project due to action taken by the importer’s host government. Such action may include intervention to prevent transfer of payments, cancellation of a license, or events such as war, civil strife, revolution, and other disturbances that prevent the exporter from performing under the supply contract or the buyer from making payment. Sometimes physical disasters such as cyclones, floods, and earthquakes come under this heading. (OECD)
Political Risk - Any event occurring abroad which assumes the nature of force majeure for the insured or for the debtor, such as in particular, wars, revolutions, natural disasters, currency shortages, government action. (ONDD)
Political Risk - is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with proper aforethought and investment. (Wikipedia)
Political Violence Damage (PV) - Property or income losses arising from violence undertaken for political purposes, such as declared or undeclared war, hostile actions by national or international forces, civil war, revolution, insurrection and civil strife. (MIGA)
Sovereign Risk - similar to political risk, refers to an investment’s returns potentially negatively impacted by political turmoil in a country. This can include a change in government or institutions which revoke foreign debts and ban foreign investments/nationalize foreign companies. This is an important risk when investing in unstable developing countries. A sudden, unexpected change could cost an investor his whole investment in merely days or weeks. (Stocktradingtogo.com)
Structural Adjustment Program (SAP) - is a term used to describe the policy changes implemented by the International Monetary Fund (IMF) and the World Bank (the Bretton Woods Institutions) in developing countries. These policy changes are conditions (Conditionalities) for getting new loans from the IMF or World Bank, or for obtaining lower interest rates on existing loans. (Investopedia)