In brief: foreign investment review procedure in Norway

Procedure

What jurisdictional thresholds trigger a review or application of the law? Is filing mandatory?

There are no nominative jurisdictional thresholds in Norway.

Mandatory notification applies only to acquisitions of ‘qualified ownership interest’ in a company that has been made subject to the National Security Act of 1 June 2018 No. 24 (NSA) by way of an administrative decision under section 1-3 NSA. Each ministry has a delegated authority, within its field of competence, to issue administrative decisions rendering a company subject to the NSA.

A ‘qualified ownership interest’ encompasses the situations where the acquisition will, overall, give the acquirer, either directly or indirectly:

1. at least one-third of the share capital, participating interests or votes in the undertaking;
2. the right to own at least one-third of the share capital or participating interests; or
3. significant influence over the company through other means.

Item (3) has an open-ended wording and is meant to cover all other types of control over the company. According to the preparatory works to the NSA, this covers the situation where the size of the share entitles the owner to appoint the majority of the board and change the company by-laws.

The Norwegian regime also includes a ‘safety valve’ provision under section 2-5 NSA allowing the government to adopt decisions necessary to prevent ‘activities’ that present a not insignificant threat to national security. This is a broadly worded provision which, according to the preparatory works to the NSA, can apply to acquisitions. However, it is important to note that it is meant to be used only in ‘limited and serious’ situations. To date, the provision has only been applied once.

What is the procedure for obtaining national interest clearance of transactions and other investments? Are there any filing fees? Is filing mandatory?

The filing must be submitted to the relevant ministry responsible for the sector in question. If the undertaking does not fall within the field of responsibility of any ministry, the filing must be submitted to the National Security Authority. There are no filing fees connected to the process for obtaining national interest clearance of transactions and other investments.

There is no specific notification form, but pursuant to the Regulations Relating to the Protective Security Work of Undertakings (FOR-2018-12-20-2053), the acquirer must provide the following information as part of the notification:

• the acquirer’s name, address, company register number, birth number or similar number;
• the company register number of the company to which the acquisition relates;
• the acquirer’s ownership share after the acquisition concerned is completed;
• the ownership structure of the acquirer;
• the names of the persons who are members of the acquirer’s board of directors;
• the names of the persons who are members of the acquirer’s management;
• possible relations between the acquirer and other existing owners of the company to which the acquisition relates;
• the acquirer’s ownership interests in other companies that are covered by the NSA;
• the acquirer’s ownership interests in other companies within the sector concerned;
• the acquirer’s annual turnover and annual accounts for the last five years, to the extent this information is available; and
• other circumstances that the acquirer believes may be of relevance for the assessment of whether the acquisition will be approved.

The objective is to ensure that the authorities are able to consider the investor’s total influence on the target, and the investor’s reliability.

In order for the acquisition to be subject to a mandatory notification under the NSA, the target must have been made subject to the NSA by a formal decision under section 1-3 NSA. There is no public overview of which companies have been issued with a section 1-3 decision. However, the National Security Authority may provide guidance on whether a company has been brought within the scope of the NSA, on a case-by-case basis.

Which party is responsible for securing approval?

Any person ‘who wishes to acquire’ a qualified ownership interest in an undertaking that is subject to the NSA shall notify the ministry accordingly. The responsibility for obtaining the necessary approval thus rests on the investor.

How long does the review process take? What factors determine the timelines for clearance? Are there any exemptions, or any expedited or ‘fast-track’ options?

Within 60 working days from the date of notification, the relevant ministry or the National Security Authority must inform the notifying party that either (1) the acquisition has been approved; or, (2) the matter has been referred to the government for further reveiw. If the ministry or the National Security Authority submits a written request for further information within 50 working days of the notification being submitted, the review period will be suspended until the acquirer’s reply is received.

If the relevant authority does not consider the acquisition to be a potential threat to national security, it will clear the acquisition and notify the acquirer of the clearance. If the relevant authority identifies a potential threat to national security, it will refer the acquisition to the government for a final decision. There is no timeline for the government to issue a final decision.

There are no exemptions or any provisions regarding expedited or ‘fast-track’ procedures.

Must the review be completed before the parties can close the transaction? What are the penalties or other consequences if the parties implement the transaction before clearance is obtained?

The approval of the acquisition can be obtained prior to, or after, closing. The notification to the relevant ministry does not have a suspensory effect, and there are no penalties if the parties implement the transaction before the approval has been granted. However, if approval is refused, the transaction will have to be reversed.

Can formal or informal guidance from the authorities be obtained prior to a filing being made? Do the authorities expect pre-filing dialogue or meetings?

The NSA is silent on the issue of whether potential investors can engage in advance consultations with the authorities and ask for formal or informal guidance on the application prior to a filing being made.

Under general administrative law, the authorities are required to provide general guidance to a certain extent. To this end, pre-notification consultations can be conducted.

When are government relations, public affairs, lobbying or other specialists made use of to support the review of a transaction by the authorities? Are there any other lawful informal procedures to facilitate or expedite clearance?

There are no set rules on the involvement of advisors in the review procedure. However, external legal counsel are usually involved at some stage in the procedure.

The reviewing authority will request advisory opinions from relevant governmental bodies with expertise in the relevant specialist area. It will be the ministry that receives the notification that must assess the case and decide how it should be handled. The Police Security Service, the National Security Authority and the Intelligence Service are examples of relevant bodies it would be natural to consult in such situations.

There are no official informal procedures.

What post-closing or retroactive powers do the authorities have to review, challenge or unwind a transaction that was not otherwise subject to pre-merger review?

Section 2-5 NSA allows the government to adopt decisions necessary to prevent ‘activities’ that present a not insignificant threat to national security. This provision is purposefully broad and is designed as a ‘safety valve’ to ensure a means of reviewing and, possibly, blocking transactions that raise national security concerns. However, the preparatory works to the NSA clearly state that it should be used only in ‘limited and serious’ situations. To date, the provision is only publicly known to have been applied once.