The risks and effects of terrorism in Latin America are emphasized. Terrorism results in property damage, ransom payments, security expenditures, and negative effects on productivity and quality control. Corporations' embargoes on employee travel have resulted in such problems as the need to ship machinery back to the United States for repairs and the inability to send in technicians to train the work force. In addition, the instability resulting from terrorism may cause host governments to enact currency or ownership policies which reduce the viability of an overseas operation. Nevertheless, businesses remain optimistic about the future of investment abroad. Terrorist attacks against American businesses occur for ideological reasons, to generate publicity, to embarrass the incumbent government, and to obtain money. Terrorist attacks have included bombings, kidnappings, assassinations, facility attacks, lock-ins, robberies, and extortion. Firms generally react individually and on their own to the problems of a high-risk environment. Many firms have developed broad security programs. Some firms have reduced the exposure of their crucial personnel. However, employee kidnappings cause major trauma. Corporations have invariably assumed the responsibility for dealing with these kidnappings, although host governments have sometimes facilitated the process. Figures, 41 references, and appendixes summarizing terrorism on U.S. businesses in Argentina and El Salvador are provided. (Author summary modified)