Currency inconvertibility and transfer risk covers the inability to convert local currency to hard currency or transfer funds out of a country due to government restrictions. Expert evidence is needed when the cause of restriction is disputed between political risk and economic policy.
PRTC policies typically require a waiting period, commonly 180 days, before a currency restriction claim is triggered. Political risk experts analyse whether the restriction remained in effect throughout the waiting period.
Precedents from Argentina, Venezuela, and Zimbabwe inform analysis of exchange control measures, regulatory changes affecting convertibility, and the quantum of loss in currency restriction claims.
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Frequently Asked Questions
What is currency inconvertibility risk and when is expert evidence needed?
Currency inconvertibility/transfer risk covers the inability to convert local currency to hard currency or transfer funds out of a country due to government restrictions. Expert evidence is needed when the cause of currency restriction is disputed, the scope of the restriction affects coverage, or the quantum of loss requires analysis of currency markets and restrictions.
How is the "waiting period" interpreted in currency restriction claims?
PRTC policies typically require a waiting period, commonly 180 days, before a currency restriction claim is triggered. Political risk experts analyse whether the restriction remained in effect throughout the waiting period and whether the applicable regulatory changes affected the restriction's continuance.