Expropriation — the confiscation of privately-owned assets by a government — was the dominant political risk of the 1970s, but may make a comeback due to the instability created by the global financial crisis, warns Lloyd’s in a feature in its News Centre.

Latin America has a long history of nationalism, and in recent years Venezuela has been active in expropriation. However, other countries such as Bolivia, Ecuador and possibly Argentina remain at risk of confiscation of foreign-owned assets says Lloyd’s.

There is also a growing threat in Africa, where ‘more insidious attempts at gaining control of privately-held assets are a bigger problem than outright expropriation’. Here, contract frustration — where governments insist on better prices and terms for previously-agreed contracts — is a bigger risk for investors than confiscation of assets.

Read the full article.

•Date:9th June 2009• Region: Various •Type: Article •Topic: Operational risk
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