June 26, 2009

The Trouble with Mass Expropriations...

Quico says: ...is that, these days, the world just isn't set up for that way of doing things. Take the Eastern Shore of Lake Maracaibo oil service company expropriations. Chávez never stopped to calculate that if you just grab the boats that those companies were using to service the rigs, you leave their property in some weird kind of international limbo. Which matters, because those boats are insured internationally. If you grab them, you find yourself holding a bunch of boats that somebody else has already taken out insurance on.

Not surprisingly, the international insurers weren't about to take that sitting down. The scarily named Joint War Committee - basically a talking shop London-based maritime insurers have set up to monitor conflict zones around the world - has put Venezuela on its "War, Strikes, Terrorism and Related Perils" list alongside such tourist hotspots as the Gulf of Aden, the coast of Yemen, the Indonesian island of Ambon and the Niger River Delta.

The decision activates the War Exclusion Clause on the insurance contracts covering - as far as I can tell - all vessels operating in Venezuela. Which means that nothing that floats within 12 miles of Venezuela's coastline can be internationally insured.