Political risk

Who it is for

Political risk underwriters, in-house lawyers in corporate finance departments, international project teams, country risk analysts, brokers to large corporate accounts.

What you will be able to do

• ·Classify a fact as expropriation, creeping expropriation, non-transfer or sovereign contract breach, and say which of the four prevails when several overlap.
• ·Build the evidence of a triggering event that leaves no official record, and place the notification between the duty to notify without delay and the requirement of a constituted loss.
• ·Separate the legitimate exercise of regulatory power from a compensable creeping expropriation, and date the latter to the day effective control was lost rather than to the day that pays best.
• ·Read a waiting-period clause and say what it actually takes away from blocked cash.
• ·Attach a political business interruption to covered physical damage link by link, and say where the chain breaks when nothing was broken.
• ·State what a sovereign contract breach cover requires before it pays, and what an arbitral award changes in the file.
• ·Assess what a recourse against a state can actually recover, separating immunity from jurisdiction from immunity from execution.
• ·Reconstruct the indemnity period of an asset held out of use, and the counterfactual world the calculation compares it to.
• ·Weigh settling with the state to limit the damage against preserving the recourse, saying what each branch costs.
• ·Separate taxation that changes from taxation that expropriates, naming the markers that make the good faith tax exclusion give way.
• ·Place an investor within the structure that holds it, minority shareholder, interposed holding or lender, and say what each can establish about one and the same loss.
• ·Assess what a multilateral guarantee or a bilateral treaty actually adds to a policy, and what a change of ownership can take away from them.
• ·Weigh a retention, a captive or a retained share across a portfolio of countries, spotting the common factors that geographic spread conceals.
• ·Take apart a placement structure, coinsurance, reinsurance or tower, and say who actually decides what the insured was sold.
• ·Run a claim through time: mitigation before knowing whether cover applies, notification, then a measure reversed that hands back an emptied asset.
• ·Read a forum and governing law clause and say what dispute resolution will cost against what is at stake.
• ·Recognize what in a file comes not from the state but from the partner, the broker or the structure, and say what remains covered.
• ·Handle the cases that fall outside this program's rule: the mobile asset that could have been moved, and the intangible asset that keeps producing without its owner.
• ·Faced with an asset frozen, cut off from its market or held after a sanction, say which state caused the loss and which policy can see it, reading the EU, UK and US regimes together.

The syllabus

Validation

Each course is validated by its questionnaire: a few easy questions, open to all, at the pass mark below. The specialization is validated once all its courses are, with no further questionnaire at this level. This check, unproctored and with a public answer key, does not prove knowledge under supervision.

6 questions per coursePass mark: 5 out of 6

What this specialization does not prove

This program attests to an understanding of the contractual mechanisms and of how facts are classified on an asset held abroad. It attests to no underwriting experience, no professional authorization, no competence in international arbitration, and it prepares for no regulatory examination. It does not cover export credit or non-payment, which are the subject of a separate program.

Who it is for

Export credit officers, credit and political risk underwriters, exporting treasury departments, sanctions and compliance counsel, specialist brokers.

What you will be able to do

• ·Separate, on one and the same unpaid receivable, what belongs to political risk from what belongs to trade credit, working from the cause of default rather than the nature of the debtor.
• ·State what a sanctions exclusion takes away from a cover, and why a loss can be covered and still be impossible to pay.
• ·Choose between a public export credit agency and the private market, naming what each recognizes as a loss and what each demands as proof.
• ·Run the arithmetic of an aggregate and a country limit both ways, and choose an aggregation position between one claim and several.
• ·Distinguish buyer credit from supplier credit, and name in each who is the insured, who bears the loss, and from what date the waiting period runs.
• ·Place a notice of overdue between the duty to report early and the requirement of a constituted loss, and name the recovery diligence required before indemnification.
• ·Compute an indemnity on a coverage share, and distinguish a first-demand guarantee from an accessory suretyship when a guarantee is called.
• ·Name which of the public window's bounds closes a given transaction, between the tenor cap, the national content share and the marketable-risk classification.
• ·State what becomes of an acknowledged indemnity whose payment is blocked by an intermediary, and which acts preserve its value during the wait.
• ·Distinguish a debtor that will not pay from a debtor that cannot transfer, and name the document establishing each of the two situations.
• ·Name, on a receivable that has been assigned, discounted or pledged, who notifies the loss, who is indemnified and who exercises subrogation.
• ·Situate a customs immobilization between the cargo policy and the political risk policy, giving the date on which one stops responding and the period after which the other begins.
• ·Quantify in present value what a sovereign rescheduling takes away from a covered receivable, and state what a schedule modification signed without the insurer does to its subrogation.
• ·Explain a refusal of capacity on a saturated country, and name the levers that reopen the transaction where the debtor's quality is not one.
• ·Build the body of evidence establishing a political cause against a silent debtor, and identify the requests that manufacture the commercial grievance one is trying to avoid.
• ·State what an enforceable title is worth against immunity from execution, and what recovery diligence actually requires in a country without useful recourse.
• ·Establish, on a private debtor, the link through which a public measure reached it, and say which of two competing policies responds when both decline.
• ·Set a whole-turnover policy against a single-buyer policy by naming what each buys, and say why sorting done by the insured makes cover dearer.
• ·Situate a contract on either side of the two-year boundary from its last possible maturity, and state what crossing it changes in the applicable framework.
• ·Distinguish the effects of under-declared turnover and of an omitted buyer on the indemnity, and not on the adjustment premium alone.
• ·Quantify a pre-shipment loss from committed cost and recoverable value, and say at what moment receivable cover takes over.
• ·Separate non-payment risk from exchange risk on a foreign currency contract, and state what the applicable-rate clause leaves with the insured.
• ·Set the sale of a receivable against its insurance by saying which one leaves the balance sheet, and what the warranty of existence and validity leaves with the transferor.
• ·Name what confirmation of a documentary credit transfers and what it leaves, and place documentary discrepancy among the causes of non-payment.
• ·Assess the risk of an issuing bank imposed by the buyer, and distinguish the rights opened before acceptance of documents, after it, and after maturity.
• ·Rank by cost the breaches that lose the cover on a valid receivable, and name the automatic controls that remove the two heaviest.
• ·Compute a national content share on an agency's rules rather than on gross value, and state what origin or a change of source does to it.
• ·Unwind a chain of counter-guarantees to the final risk carrier, and say where a mismatch of durations makes it break.
• ·Allocate between factoring and credit insurance the risk, the recovery and the financing of a receivable, and name the four questions a combined structure must settle.
• ·Allocate a sum recovered after partial indemnification under the three families of application clause, recovery costs deducted.
• ·Identify the law fixing the limitation of a foreign receivable, its starting point and what interrupts it, and say what a time-barred receivable does to subrogation.
• ·Sort an insurer's renewal requests between portfolio decision and assessment of the insured, and name what is really negotiable.
• ·Place a commercial receivable among the categories of a sovereign restructuring, and say in what order a country resumes paying.
• ·Read an advance payment guarantee on its effectiveness, its reduction mechanism and its calling ground, and say what makes it more dangerous than a performance guarantee.
• ·Locate the breaking points of a commodity financing, between the goods' location and the settlement account, and say which cover answers each.
• ·Assess the soundness and concentration of a cover's carrier, and say what an insured can do when its insurer deteriorates mid-contract.
• ·Allocate between insured and broker what each had to know and say, and distinguish a placement fault from the market's bounds.
• ·Quantify the trade-off between withdrawing an offer and performing at a fixed price during a bid's validity, and track releases as receivables.
• ·Measure the exposure created by a sole distributor, between peak outstanding, stock turnover and the substitution risk no policy covers.
• ·Name what a company without a credit department delegates to its insurer and the three obligations that remain, and replace them with automatic controls.
• ·Identify the insured debtor when a purchasing group buys for stores it does not own, and say what its failure leaves to recover.
• ·Locate the risk in a transaction paid in goods, and say what a set-off clause does to the receivable's insurability.
• ·State by what paths a subcontractor paid at home carries a country risk, and what it can insure on its own account.

The syllabus

Validation

Each course is validated by its questionnaire: a few easy questions, open to all, at the pass mark below. The specialization is validated once all its courses are, with no further questionnaire at this level. This check, unproctored and with a public answer key, does not prove knowledge under supervision.

6 questions per coursePass mark: 5 out of 6

What this specialization does not prove

This program attests to an understanding of the cover mechanisms applying to a receivable or to a payment blocked in a given country. It attests to no underwriting experience, no professional authorization, no competence in sanctions compliance, and it prepares for no regulatory examination. It does not cover expropriation or the protection of a fixed asset held abroad, which are the subject of a separate program.