Strange Lands in Strange Times: Managing Overseas Political Risks

Welcome to the March 2022 edition of our newsletter!  In this issue, we’ll examine the risks posed by geopolitical instability when investing or conducting other business overseas.

Spillover Effects: How Political Instability Abroad Can Alter Plans at Home

An increasingly global corporate environment has created both opportunities and risks without borders.  When geopolitical events occur that can pose risks to an existing investment, or change the calculus for a potential one, how can you respond?

One due diligence measure your company can take is to look at a company’s contracts or other interactions with state actors or other parties that could be the subject of sanctions.  Are any customers or vendors on international watch lists, or is that possibility forthcoming?  If so, what is the nature of the business relationship with the sanctioned party, and what could prolonged sanctions mean for future expectations?

Concerning both individuals and entities that could be subject to sanction, extensive due diligence is recommended, especially if already engaged prior to sanctions.  Understanding how parties interact with a state government that may spur international condemnation, and what reputational risks those associations may carry, can be critical to transacting business in turbulent times – or deciding to walk away altogether.