Political and geopolitical risk
Types of political risk, with real examples
The main types of political risk companies face abroad, from expropriation and currency controls to unrest and contract breach, with recent examples.
Guide
Political and geopolitical riskLast updated
3 minute read
By Zed Three analysts
Short answer
The main types of political risk are expropriation and nationalization, currency inconvertibility and transfer restrictions, political violence, sanctions and regulatory change, contract breach by governments, and instability from elections or coups. Recent examples include Mali's seizure of Barrick's gold complex and Niger's takeover of Orano's Somair uranium mine.
Last updated
Government action
Expropriation: Niger took control of Somair from France's Orano and later transferred its permit to a state company. Nationalization: Burkina Faso transferred five gold assets to its state miner in 2025. Regulatory change: new rules can raise state stakes, taxes or royalties on existing projects.
Money and contracts
Currency inconvertibility and transfer restrictions stop investors moving profits home. Contract frustration happens when a state buyer stops paying or cancels an agreement. Both are core covers in political risk insurance.
Violence and instability
Coups, contested elections, civil unrest and terrorism can halt operations or damage assets. Political violence insurance and security planning address these risks.
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Frequently asked questions
What is the most common political risk?
It depends on the country, but regulatory change and contract disputes affect far more companies than outright expropriation.
What is creeping expropriation?
A series of government measures, such as tax, license or royalty changes, that together destroy an investment's value without a formal seizure.
Can political risk be insured?
Many types can, through political risk and political violence insurance, though cover has limits and exclusions.
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