Expropriation in the 21st Century – New Challenge for Political Risk Analysis

The article treats expropriation as the main political risk for international business, which was scientifically conceptualized following the decolonization period and marked by the shift in development strategies of the third world countries. With the end of the third wave of democratization, the fall of the Berlin Wall and the active liberalization of new markets, research interest in political risks, including threats of expropriation of foreign capital, weakened, giving way to mainly economic indicators of the investment climate. In recent years, however, with the increasing geopolitical turbulence and escalating trade and diplomatic conflicts, political factors are being brought into the foreground of country risk profiles.In line with the expert discussions on the return of political risk, this article addresses the issue of the relevance of expropriation threats and reveals their modern nature. It focuses on the development of implicit mechanisms of state dispossessions and their current geographical distribution, which is no longer limited by the emerging markets. Based on the analysis of international arbitration cases, the article proves the modern relevancy and importance of both direct and creeping expropriations. It also stresses the necessity of the adaptation of political risk analysis methodology in accordance with the recent evolution of government takings, marked by the modification of its sources and fundamental political motivations. At the same time, the conducted analysis of scientific research in Russia reveals a noticeable gap in this direction and emphasizes this urgent need for reconsideration of political risk theory in order to bring it in line with current nature of direct and indirect forms of expropriation.