Our view on political and regulatory risks comes from extensive, hands-on and practical experience in addressing and overcoming these risks on behalf of our clients. As such, we use working definitions of these risks to guide us in understanding the issues involved and designing strategies that will be of material benefit to our clients. These working definitions are:
The risk that a government will pursue, or has already taken, a specific course of action to secure an economic, political, or financial benefit from a company or sector that it could not otherwise achieve through legitimate means. The forms these actions take include: breach of contract; adverse regulatory changes; transfer and convertibility restrictions; forced sale and disposition; and expropriation/ nationalization.
The risks that a government will include - or has already adopted - certain measures in legislation, regulations, and/or procedures that call for an unduly high degree of political involvement in the rendering of an administrative decision. Examples of these types of legislation, regulations, and/or procedures include: the US Foreign Investment and National Security Act, 2007; Investment Canada Act; the EU’s REACH Regulation; and the EU’s Anti-Dumping Measures.