Expropriation

Expropriation coverage protects against the nationalization, confiscation or expropriation of an investment, including “creeping” expropriation, due to unlawful government acts (or a series of acts) that deprive the investor of its fundamental rights in a project. The coverage excludes losses due to lawful regulation or taxation by host governments and actions provoked by the investor or foreign enterprise.

For equity investments, compensation is based on the book value of the investment as of the date of expropriation. In most cases, OPIC covers total expropriation only. To receive compensation, an investor must assign all rights in the insured investment to OPIC. For parent-company loans to subsidiaries, compensation is based on outstanding principal and accrued interest that would have been paid.

Coverage for expropriation of funds only — unlawful host government blockage of funds intended to be remitted as returns of the insured investment or earnings on it — may be purchased for a reduced premium in conjunction with currency inconvertibility coverage. Insurance for specialized risks peculiar to a specific project may be available, including, for example, coverage against losses resulting from the unlawful breach of specific host government obligations identified by the insured at the outset as vital to the successful operation of the project. Under certain circumstances, OPIC is also able to cover the unlawful breach of specific contractual obligations of a subsovereign or a corporation owned or controlled by a foreign government. These coverages are available on a case-by-case basis and will be individually rated.