Many sales transactions that are made to third countries, often have a country political risk or not always tends to value the exporter.
The country irrigation or political risk is the risk that exporters do not get the payment for goods or services rendered, or they fail to get the return on an investment due to the economic, financial or social instability in a country.
Such policies cover the risks of expropriation, confiscation and nationalization, armed conflict, revolution or internal or international war, and also default or breach of previous agreements.
There are several companies worldwide, specialized in covering this type of operations and ECAS usually are very active when they need to provide such services.
For years we thought that a world like we’re seeing lately, carries an inherent risk for our exports to certain countries and therefore there are chances of default, not by our client, but by the country in which it is.
In a world where so-called emerging countries are pushing strongly when purchasing our products and services, we should not lose sight of the political risk that underlies these operations.