Some Kinds of Political Risks:

- Confiscation, Expropriation and Domestication

- Economic risks associated with the political environment (exchange controls, local- content laws,
import restrictions, tax controls, price controls, labor problems)
- Political Sanctions (boycotting trade altogether or on specific products by one country to another)
- Political and Social Activist and Nongovernmental Organizations
- Violence, Terrorism and War
- Cyberterrorism and Cybercrime

MACROPOLITICAL RISK – refers to a political risk that affects all business in a given country.
MICROPOLITICAL RISK – refers to a political risk that only affects a certain industry or set of
firms in a given country
TERRORISM – has become a significant political risk worldwide. It involves unlawful acts of
violence threatening the physical safety of others.

 ECONOMIC RISKS – include economic problems or mismanagement in a given country that

will have a meaningfully negative impact on the conduct of business there.

Examples:
- restrictions on the transfer or exchange of a given foreign country’s currency
- devaluation of the currency militant labor unions
- inflation

 CORRUPTION – is a form of dishonesty or a criminal offense which is undertaken by a person

or an organization which is entrusted in a position of authority, in order to acquire illicit benefits
or abuse power for one's personal gain. It is a situation where businesses are able to illegally alter
relevant private and/or public decision-making through bribes, kickbacks, blackmail, and
extortion

Types of Corruption:
PRIVATE CORRUPTION – is business corruption involving other private businesses,
individuals or groups. Private Corruption can be difficult to define. Definitions of private
corruption differ widely around the globe.
PUBLIC CORRUPTION – is the practice of making illegal payments to government officials or
engaging in blackmail, extortion, or related activities to obtain government contracts or
government approval for business activities.
 JURISDICTION IN INTERNATIONAL LEGAL DISPUTES – There is no absolute
international law system, so there are many ways to handle conflict. The question most
commonly asked in these instances is “Whose law governs?

- government vs. government

- company vs. government
- company vs. company