The geopolitical drama unfolding with respect to Venezuela is loaded with opportunity and fraught with political risk arising from both Venezuelan and U.S. government actions. The country is still headed by a regime the U.S. government officially does not recognize, while a government that the United States does recognize stands on the outside seeking U.S. support to assume the reins. The President has stated that the U.S. has assumed “control” of Venezuela—and invites U.S. businesses to make massive investments on the ground—while the unrecognized Venezuelan government oscillates between official rejection and cooperation with U.S. political initiatives. Moreover, Venezuela has a history of expropriating assets, particularly in the oil and gas sector, and many state-owned companies have defaulted on significant payables to service companies that are essential participants in the efforts to rebuild and restore the Venezuelan infrastructure and economy.
Faced with such uncertainty, how might a U.S. business interested in making Venezuelan investments mitigate its risks? Political Risk Insurance is one way to help mitigate risk.