Political risk


Economic risk resulting from the political decisions of sovereign governments as well as political and social events in a country. Political risks include confiscation, expropriation, nationalization, currency inconvertibility, contract frustration, war, civil unrest, revolution and annexation. Political risk can lead to the failure of a debtor to comply with a contract or to the loss, confiscation or damage to goods belonging to an exporter. An exporter may be able to cover this risk by utilizing a confirmed letter of credit or by applying for cover from export credit agencies. 

See commercial risk.

Was this article helpful?

Related Articles

Need Support?

Can't find the answer you're looking for?
Contact Support