Political risk is a clear and present danger to companies operating in today’s global economy. It may come from political instability, military conflict, terrorism, expropriation of assets or trade frictions. To understand and mitigate against these threats, International Risk offers political and business risk assessments that are specifically tailored to the requirements of corporate decision makers.

The Value of Political and Business Risk Assessments

Whether you are an investor, trader, insurer or business executive seeking to enter into an unfamiliar country or even if you already have a well-established presence, understanding the ever-changing political and business environments are critical to the success of your mission.

It is often the case that the actual political, economic, business and social dynamics within a country or region are significantly different from what appears on the surface or in the media. An independent risk assessment is vital in sorting out fact and insight from propaganda and gossip.

Political and business risk assessments can save valuable time and costs if conducted in the early stages of a business evaluation as issues can be identified that may need to be addressed before a company decides to commit considerable resources to proceed with the transaction. These assessments can also be used to decide if political risk insurance coverage is required to mitigate against potential risks, such as the non-honouring of sovereign guarantees, the imposition of foreign currency controls or the cancellation of operating licenses.

Our Approach

International Risk has access to an unrivalled range of information sources, including a global network of local associates, which allows us to provide assessments that are rigorous, comprehensive, timely and reliable. We work closely with clients to identify their requirements, which can be classified into three broad categories:

• Macro-level issues: Political, economic, regulatory, national security (including crime and terrorism), diplomatic, legal, social, labour and other concerns that could affect the overall operating environment.
  
• Specific business and transaction-related issues: Risks related to the confiscation, expropriation or nationalization of assets, trade-related disputes, government interference, corruption, labour unrest and other matters that have a direct impact on business operations.
  
• Micro-level issues: Political, economic, social, public order, environmental and other matters related to the specific local areas or economic sectors in which a client’s operations are or will be located.

We offer different types of products that depend on the needs of our clients. They include detailed country reports that can be updated regularly if required, as well as specific industry or broader regional geo-strategic analyses.

We can also conduct sophisticated scenario planning exercises to assist clients in assessing potential future trends and developments that might impact upon their operations in the short, medium and long term.

Our Track Record

We have an extensive track record of advising leading companies on the political and business risks they might potentially encounter in their business dealings around the world. They include insurance companies providing political-risk-related coverage and firms in the oil and energy sectors making substantial long-term investments in volatile regions.

Here are some examples of the work that we have conducted:

• A foreign manufacturer considering an investment opportunity in the Middle East: We conducted a political and business risk assessment of the costs and benefits of investing in a multi-million dollar manufacturing facility in a Middle Eastern country. Issues that were examined included the stability of the ruling political elite, demographic dynamics, the threat from militant religious groups, the reliability of the military and the broader regional security environment.
  
• A European firm seeking to make an investment in Africa: This firm was concerned by the potential expropriation of its assets, labour and race issues, the state of local law and order for its employees and the business prospects for the development of a regional free-trade accord that would expand market access for its goods.
  
• A multinational evaluating the need to take out political risk insurance coverage: A multinational that was investing several hundred million dollars in a major infrastructure project in Asia required an independent assessment of the need to undertake political risk insurance coverage and what risks should be considered.

Related Services

International Risk offers a number of other related services that complement our political and business risk assessments. They include:

• Investigative due diligence services, which identify off-balance sheet risks.
• Business intelligence assignments, which provide companies with market-based industry and competitor studies.
• Contingency and emergency planning, which assist firms to prepare for major crisis.
• Crisis management, which assists firms in the management of unfolding crisis.