This term refers to losses arising from a government or state-owned-enterprise breaking or breaching of a business contract with the foreign private investor. A frequently cited cause of harm is either a change in host country law or a failure to comply with principles of the rule of law. This is the risk that a host country will restrict the ability of the multinational firm to move money in or out of the country. This is the risk that a host country will restrict the ability of the multinational firm to exchange local currency for foreign currency in an expeditious manner. This political risk is the practice of a government not allowing the conversion from the local currency into a major trading currency. This restriction of access and exchange is referred to as The most extreme form of political risk is expropriation, the seizure of the multinational company's business, assets, or license to operate in the country by the government-the public taking of private assets. Technically, if the seizure or transfer of ownership is made on a statewide or industrywide basis and not a singular or specific firm, the action is termed