Businesses today face many challenges managing their risk; one area of increasing concern is the risks associated with cross-border transactions, which seem to be at an all time high. The procedures and steps organizations face when conducting business internationally are continually becoming more complex. An article by Country Risk Solutions, Managing Political Risk in the New Normal, shows how the rules of engagement for conducting international business have changed.
Despite the current state of a country looking positive, it is becoming increasingly difficult to predict what may happen years down the road, after you have made your large long term investments in that country. There may be a long list of reasons why you should do business in a particular country but we live in a period of high economic volatility. Governments change, economies collapse, and a greater number of natural disasters can completely crumble a country’s economic footing. Simply put, there are no spreadsheets that can predict these events.
Having a political risk insurance policy is a must when doing business in foreign countries. It has been more apparent in years past than ever before that global economies change rapidly, and sometimes without warning. An independent risk management consultant can help your company understand the risks associated with cross-border transactions, and how they fit into the company’s Total Cost of Risk (TCoR). The ALS Group, for example, can perform a country risk review by exploring the regulatory environment of the target country. Such review will give the senior leadership of the firm the transparency they need to make strategic business decisions.
If you would like to find out more about how to deal with these ever increasing risks, please feel free to contact Albert Sica at 732-395-4251 or at [email protected].
