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Screening of foreign direct investments in Norway

Norway is a part of the European Economic Area but has its own national rules governing the screening of foreign direct investments ("FDI"). This article gives a brief overview of the relevant legislation and filing requirements.

Prior to the entry into force of the FDI Screening Regulation on 11 October 2020, there was no EU-wide formalized cooperation among the Member States and the European Commission on these matters. In the EU, the European Commission’s strong expectation is that all 27 EU Member States will put national FDI screening mechanisms in place. A national screening mechanism in all 27 Member States serves to safeguard all individual Member States against potentially risky foreign investments.

Norway is not a part of this cooperation but has chosen to introduce its own national rules in the Security Act. The Act entered into force on 1 January 2019 but has not been applied in significant matters until now. Due to the current security situation in Europe, the rules are likely more relevant than they have previously been.

The Security Act applies to companies where the relevant ministry responsible for the sector in question has decided that the legal entity in question:

  • handles classified information;
  • controls information, information systems, objects, or infrastructure which is of vital importance to fundamental national functions, or
  • engage in activities that are of critical importance to essential national functions.

The Act contains restrictions on the ownership of companies where the relevant ministry has decided to include the company on the so-called Section 1-3 list. So far, the National Security Authority has not decided on whether the list of companies covered by the Act shall be made public. For the time being, only companies included on the list are given notice of a decision.

The Act provides a duty to notify in connection with the acquisition of an undertaking on the list. The main rule is that “Any person who wishes to acquire a qualified ownership interest in an undertaking which is subject to the act … shall notify the ministry accordingly.”

A qualified ownership interest exists if the acquisition will, overall, give the acquirer, either directly or indirectly,

  • at least one-third of the share capital, participating interests, or votes in the undertaking:
  • the right to own at least one-third of the share capital or participating interests, or
  • other means of significant influence over the management of the target company.

Within 60 working days, the ministry or the National Security Authority shall notify the party which has given notice that the acquisition has been approved or that the King in Council (government) will consider prohibiting the transaction. The timeline may be suspended if the ministry or the National Security Authority submits a written request for further information within 50 working days.

If an acquisition represents a “not insignificant risk of a threat to national security interests,” the government may decide that the acquisition shall not be approved or that implementation shall be subject to conditions. This applies even if a final agreement has been entered into or closing has already taken place. Thus, there is no deadline for intervention if a transaction has not been notified.

The requirements relating to the content of notification of an acquisition of a qualified ownership interest in an undertaking subject to the Security Act are further detailed in the implementing regulation. They comprise, among other things, detailed information about ownership structure, management, and other matters that “may have an impact on the assessment of whether the acquisition can be approved.”