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PR(02)02: Restrictions on the acquisition of waterfalls in Norway in breach of the EEA Agreement

16.9.2002

On 20 February 2002 the EFTA Surveillance Authority issued a Reasoned Opinion to Norway concluding that Norway’s legislation concerning the acquisition of concessions over waterfalls for the production of energy breached the EEA fundamental freedoms of establishment and movement of capital.

According to the Norwegian Act No. 16 of 14 December 1917, the acquisition of waterfalls by other persons than the State is subject to a concession. In principle, concessions are granted for a limited period of time up to a maximum of 60 years. At the end of that period, undertakings are obliged to return all installations to the State without compensation. However, this rule does not apply to municipalities, counties or State-owned undertakings, as defined by the Norwegian Act, including limited liability companies where the State owns 2/3 or more. Such undertakings have the right to unlimited concessions.

In its Reasoned Opinion the Authority maintains the position expressed in its letter of formal notice sent in June 2001. According to the Authority, the very existence of the difference in treatment between Norwegian public undertakings which enjoy concessions for an unlimited period of time, and private undertakings which are only granted concessions for a maximum of 60 years and which must return all installations to the State without compensation at the end of the period, only favours undertakings of Norwegian nationality. This rule is contrary to the freedom of establishment provided by Article 31 of the EEA Agreement. Moreover, the fact that the Norwegian Act allows situations where private undertakings may only, in some circumstances, run the concession for a limited period of time may deter investors from acquiring shares in those undertakings, contrary to the provisions on the free movement of capital (Article 40 of the EEA Agreement).

In the Authority’s opinion, Norway has not demonstrated that its national measures are justified.

The purpose of a Reasoned Opinion is to give the State in question a last chance to take corrective measures before the Authority decides whether to bring the matter before the EFTA Court. Norway has been given two months to take the measures necessary to comply with the Reasoned Opinion.

For further information please contact Mr. Peter Dyrberg (Director of Legal & Executive Affairs), telephone (32)-02-286-1830.




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