The Political Risk Of Overseas Investment Guarantee System

　　 Overseas investment guarantee system Targeted only Political risk 。 The so-called political risk refers to the uncertainty of the host country's current social and political situation and the development trend of its legal policies. It includes two aspects: one is the uncertainty of the future political environment of the host country; the two is the uncertainty of the future behavior of the host country society and the government affecting the interests of foreign investors. It can be said that most of the political risks stem from the behavior of host governments, such as changes in legal policies and changes in foreign exchange control measures. There are also risks that the government can not foresee or control, such as civil strife, anti government behavior, etc. All countries domestic law Generally speaking, political risk includes three types:

　　 1. exchange insurance (foreign exchange insurance).

Exchange risks, including currency exchange risks and remittance risks, mean that the host country prohibits or restricts foreign investors from converting their original investment or profit into a freely available currency by issuing laws or other measures, and transfers the risk of damage to the investor outside the host country. Of course, different countries have different scope of insurance coverage. Some countries underwrite the "exchange insurance" and underwrite the "remittance risk". Some countries only underwrite the "exchange risk". According to the provisions of the Overseas Private Investment Company amendment act on the exchange insurance, the local currency obtained by the insured as the investment income or profit during the insurance period, or the local currency obtained through the sale of the property of the investment enterprise. If the host country prohibits the exchange of these goods into US dollars for repatriation to the United States, it should be exchanged by the Overseas Private Investment Company in the US dollar. But the premise is that there is no such injunction when the insurance contract is established. Obviously, American law only covers exchange insurance. Japan undertakes these two risks.

　 2. levy insurance (expropriation).

Levying insurance refers to the risk that the host country's government takes the expropriation, requisition, nationalization, forfeiture or similar measures to cause foreign investors' investment and related rights and interests to be damaged. Here, the term "levy" usually includes: collection, requisition, confiscation and nationalization. Although these behaviors have their own characteristics, they are generally not clearly distinguished. Some scholars call them "direct expropriation". The "similar measures" for "indirect expropriation", also known as "gradual collection", means that when the host government fails to obtain the ownership of foreign investors in accordance with the law, it adopts the act of impeding or affecting the exercise of effective control, right of use and disposition by foreign investors. For example, forced localization, forced equity transfer, forced transfer of management rights, and inappropriate increase of tax rates. The United States, Britain, Germany and other countries adopt the mode of "direct collection" and "indirect expropriation", but their scope is different. The meaning of "expropriation" stipulated in the US foreign aid act is more extensive. It stipulates that the collection includes, but is not limited to, the abandonment, refusal of performance of foreign governments, and damage to contracts concluded with investors, making it difficult for the investment project to continue operation. However, the above acts of the host government must be caused by the fault or improper conduct that cannot be attributed to the investor himself. The export insurance act of Japan stipulates that all assets invested in foreign countries are collected by foreign governments (or local public organizations). The "seizure" means collection, expropriation, confiscation, nationalization and deprivation of ownership.

　　 3. war risk (war risk).

War risk, including war risk and internal insurer insurance, refers to the risk of loss caused by foreign investors' investment in host country due to local operations such as war or civil war. "War and other military operations" refers to wars or armed conflicts between different countries, armies or groups and armed forces. "Civil strife" refers to the violent acts of revolution, riots and riots aimed at overthrowing the rule of the host government in the whole country or parts of the country, but does not include strikes and student movements. The loss caused by general terrorist activities or domestic riots is not a risk of war risk unless it is deliberately sabotaged by the hostilities of domestic or international organized armed forces. In the United States, war risk is limited to losses caused by sabotage by individuals or groups in order to achieve some political purpose.

In addition to the above three risks, the United Kingdom also underwrites "other non-commercial risks", and the United States undertakes "business interruption insurance". According to the Overseas Private Investment Company Amendment Act 1985, the basic meaning of business interruption insurance is: no matter the occurrence of a no insurance accident or an insurance accident or a war insurance accident, the business interruption of an investment enterprise insured by an overseas private investor shall be compensated by the insurer. The purpose of the "interruption insurance" as a separate risk is to provide greater investment guarantees for overseas private investment in the United States, so as to encourage capital to be exported overseas.