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PR(00)06: The EFTA Surveillance Authority sends a letter of formal notice to Norway concerning restrictions in the law on acquisition of business undertakings

16.9.2002

The EFTA Surveillance Authority sent a letter of formal notice to Norway, on 24 March 2000, for failure to comply with EEA rules concerning the free movement of capital (Article 40 of the EEA Agreement and Directive 88/361/EEC) and the freedom of establishment (Articles 31 and 34 of the EEA Agreement).

The Law on acquisition of business undertakings of 23 December 1994, No 79 (Lov om erverv av næringsvirksomhet) provides for a general authorisation procedure when an investor or a group of investors acquire more than 1/3 or at least 1/ 2, or at least 2/3 of ownership participations carrying voting rights in a Norwegian company, which fulfils one of the criteria set out in the law concerning number of staff, turnover or receipt of public support in respect of research and development.  Same applies to assets, of which an acquisition implies a take-over of an operation.

The law makes the acquisition contingent upon approval of the Norwegian authorities, which must be sought by means of a notification, unless exempted.  Both the Norwegian State and the counties and municipalities where an enterprise is situated are exempted.

Until the Ministry of Trade and Industry approves the acquisition, usually by inaction within 30 days from the notification, the acquirer can exercise limited ownership rights in the company or of the assets.  The acquisition can be made subject to closer examination and the acceptance of it can be made subject to conditions, which are not set out in the law. 

It is the Authority’s view that a system requiring an administrative authorisation involves a certain degree of discretion, creates legal uncertainty for investors and is, consequently, liable to hinder or make less attractive the exercise of the freedom of establishment and the free movement of capital.  As the rules have not been justified they must be regarded contrary to the EEA Agreement.

The Norwegian Government has been invited to submit its observations to the content of the letter of formal notice within two months upon its receipt.  In light of these observations the Authority will consider whether to proceed with the case.

For further information please contact Mr. Peter Dyrberg (Director of Legal & Executive Affairs), telephone (32)-2-286-1865. 

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