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Expert group proposes new foreign direct investment screening rules

In a green paper (NOU) published on 4 December 2023, an expert group, consisting of among others partner at Simonsen Vogt Wiig Ørjan Nilsen, proposes a full revision of Norway's current FDI screening legislation.
European Union flags in front of the Berlaymont

In recent years, the intersection of economic openness and national security has prompted international policy development in various countries, including Norway. Concerns about vulnerabilities arising from foreign investments, particularly in security-sensitive sectors, have led to the revision of legislation and the initiation of supply chain assessments by trading partners. While recognizing the importance of foreign investments for economic growth, a Norwegian Commission has evaluated the nation’s current investment screening system, highlighting several challenges.

The Commission emphasizes the need to balance national security interests with maintaining an open economy. It notes that Norway’s current screening system is narrow, fragmented, lacks transparency, and deviates from international principles. The Commission recommends developing a new set of rules to address these issues, aligning with European standards and the EU’s FDI Screening Regulation.

Key challenges identified include the insufficient detection of relevant cases, a lack of transparency, a narrow legal basis for intervention, and non-compliance with international principles. The Commission proposes a mandatory notification system for foreign direct investments in security-sensitive sectors, aiming for a clear, targeted, and standardized approach. The new legislation should incorporate rules on confidentiality, ownership control, and a single authority for case processing.

The suggested system distinguishes between investors from EEA countries and third countries, with varying reporting duties. The Commission advocates for international cooperation, suggesting participation in the EU’s FDI screening mechanism and taking a leading role in forums like the OECD and IMF. Despite acknowledging associated costs, the Commission believes a well-designed system can balance national security without impeding foreign investments.

In conclusion, the Commission proposes a comprehensive overhaul of Norway’s investment screening system, emphasizing the importance of adapting to evolving international norms and safeguarding national security while fostering an open economy.

Link to the document with a more comprehensive summary in English:

NOU 2023: 28 – regjeringen.no