Glossary

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)

Other Glos­saries
MIGA
ONDD