Political risk insurance takes two forms. It either insures the equity investment of a Canadian business abroad or it could insure the bank's participation in a foreign project for which they're comfortable with the commercial risk, but the political risk is something they're concerned about.
We insure three risks. One is the risk of expropriation, the loss due to expropriation, without getting adequate compensation from the host country. The second risk is the inability to transfer or convert earnings, be it in the form of dividends or fees, the repatriation of profits from that country back to Canada. The third is political violence that will either restrict one's ability to get access and therefore operate the investment or that damages the investment.
As I said, if you're a Canadian business and you're going to make an investment abroad, you can insure the investment against those risks. Alternatively, if you're a bank, you're could be trying to support a project.
For example, out west Agrium is building a fertilizer facility in Argentina for which EDC was a lender and a political risk insurer, a lender to help the project actually acquire the goods and services to build the project, and a political risk insurer because the banks were also lending on that project. They liked the commercial risk of the project, and it made sense to them, but in Argentina they were worried about an expropriation of the project ultimately leading to non-payment of the loans, so they asked the EDC to insure them against the political risks.
For examples of high political risk, I think Venezuela right now is certainly raising concerns, through some of its actions, that they could potentially engage in expropriation action. A bank, like Scotiabank, that is operating under a bank licence could worry about losing that licence without adequate compensation. It could be a mine that's operating there, and you're worried about the Venezuelans ultimately expropriating the mine without paying for it.