NORWAY Trends and Developments Contributed by: Kai-Ståle Kristiansen, Pål Lieungh and Hedvig Moe, Advokatfirmaet Thommessen AS
sector’s use of the exemption reviewed by KOFA, by ESA or through ordinary court proceedings. The distinction is a legal question, but also has direct commercial consequences in terms of those who may participate in a competition, the requirements that apply, and how the contract is structured. For a Norwegian supplier, the difference between compet - ing under FOA and being invited to a directed request under Article 123 can be the difference between being excluded and winning the contract. As procurement volumes increase and the sup - plier base expands to include actors without tradi - tional defence experience, this boundary should be expected to be challenged more frequently – both by suppliers who consider themselves excluded without sufficient legal basis, and by the defence sector, which must document the security rationale in each case. FDI Screening Under the Security Act Chapter 10 of the Security Act constitutes Norway’s FDI screening mechanism for entities that have been made subject to the Act by individual administrative decision on the basis of their significance to national security. Notification requirements upon acquisitions were substantially tightened by an amendment act of 20 June 2023, which has not yet entered into force: thresholds are lowered from one-third to 10% of share capital or votes, with additional notification steps at 20%, one-third, 50%, two-thirds and 90%. The noti - fication obligation is simultaneously extended to the seller and the target entity. A standstill obligation will apply until the notification has been processed. The amendments are expected to enter into force early 2027. A new Section 10-4 will prohibit the sharing of infor - mation that could be used for security-threatening activities without ministerial consent in a pending transaction. In addition, the Norwegian government, through the King in Council, holds a broad “golden power” authority to intervene in any activity that is considered a non-negligible risk to national security interests, including transactions. Through this golden power, the government holds the authority to decide that an acquisition may not proceed, or to impose conditions.
The information-sharing prohibition should be expect - ed to have an impact on typical due diligence pro - cesses, including availability of information concern - ing important value or risk drivers. Certain information cannot be shared with a potential buyer without the ministry’s prior consent. The authorities may grant consent and may impose conditions. From a trans - actional standpoint, this will be an important consid - eration when negotiating deal terms. Export Control: Essential Compliance Function for New Market Entrants Norwegian defence exports have quadrupled in six years – from NOK5.7 billion in 2019 to NOK21.3 billion in 2025. Over 90% of this goes to NATO countries and other European allies. The figures reflect a tightened security environment, but also that the Norwegian defence industry has strong high-tech specialised expertise positions in missiles, air defence, underwa - ter technology and tactical communications. For companies seeking to capture part of this growth, the authors see that an early understanding of the export control framework and the role of the Directo - rate for Export Control and Sanctions Administration (DEKSA) is essential. New market entrants without sufficient export control expertise risk not being posi - tioned to participate in markets for which they may otherwise be technologically qualified. Industrial Co-Operation: Market Access and Supply-Chain Consolidation Industrial co-operation requirements ( bestemmelser om industrielt samarbeid (BIF)), regulated in Annex 6 to the Guidelines on Acquisitions in the Defence Sec - tor (RAF), apply to defence procurements from for - eign suppliers that can be justified under Article 123 and exceed NOK100 million. The purpose is to main - tain, develop or create competitive national industrial capacity in technology areas of significance to the Armed Forces. A binding industrial cooperation agree - ment – up to 100% of the contract value – governed by Norwegian law must be signed before entering into the supply contract. The BIF distinguishes between three project categories: Category I (strategic projects of significance to the Armed Forces or national secu - rity); Category II (defence-related projects); and Cat - egory III (projects related to the protection of critical
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