Member Articles
Year in Review: Financial Regulation General Since the European System of Financial Supervision (ESFS) was introduced in 2010, several legislative acts have been adopted in the EU without being incorporated into the EEA-agreement. This is mainly due to Norwegian constitutional issues. These constitutional issues were resolved in 2018, and as result, a huge backlog of EU legislative acts needs to be incorporated into the EEA-agreement and transposed into Norwegian law... |
Year in Review: Dispute Resolution To avoid a complete halt in critical functions in society, the government proposed a new law, the Corona Law, which provided the government with the authority to give regulations that were contradictory to statutory law. The most prominent feature on the field of litigation was the court’s new ability to decide that an oral hearing should be held by the use of videoconference. Furthermore, the Supreme Court also showed their ability to adapt quickly to the new situation... |
Year in Review: Tax Law Application of the exemption method conditional on fulfillment of requirements with regards to ownership fraction and period The Norwegian rules regarding participation exemption have in general entailed that companies tax resident in Norway investing in companies tax resident in the UK have benefited from participation exemption rules with regards to dividends and capital gains on such shares, and the same has been the case for UK companies investing in Norwegian companies... |
The Trade and Cooperation Agreement between the EU and the UK Post Brexit – What Happened to "A Level Playing Field"? At Christmas, the Trade and Cooperation Agreement (TCA) consisting of 1256 pages was finally agreed between the EU and the UK. Crucially, the Agreement is between the EU and UK only and not the EU and its member states and the UK. The TCA establishes a free trade area for goods and services, in accordance with the WTO law. Both sides can apply trade remedies as is usual for free trade agreements such as on condition anti-dumping duties, anti-subsidy duties, and economic safeguards... |
Year in Review: Banking and Financing After a hectic first quarter, the focus shifted dramatically after the lockdown in mid-March. Within a few days, we went from negotiating new financings within most industries to assisting our clients with urgent waivers and liquidity loans. After the initial chaotic period, we have, however, seen a more normalized period with considerable activity where strong companies and good projects have been able to obtain new financings on acceptable terms... |
The Norwegian Supreme Court Rules on Access to Evidence in the MV "Cheshire" Litigation The underlying dispute relates to the MV «Cheshire» incident in 2017, where a cargo of fertiliser was subject to a major decomposition incident. The fertiliser that was carried on the vessel was damaged, and the vessel was declared a total loss. In February 2020, Oslo District Court ruled in favour of the cargo interests, holding the carriers liable for the cargo loss (approx. USD 25 million) (TOSLO-2017-180657-1). The carriers have appealed the judgement... |
Year in Review: Real Estate 2020 has been a year of new challenges and uncertainty due to the Covid-19 pandemic. Despite these turbulent times, the Norwegian real estate market has remained relatively stable and strong. According to the last known reports and statistics, we see a total transaction value that has surpassed NOK 51 billion in 2020, compared to NOK 100 billion in 2019. The project finance facilitators remain more active than ever... |
Short & Sweet – Direct Agreements between Lenders and Borrowers’ Counterparties So called ‘direct agreements’ in the context of debt financing, has the main purpose of establishing a direct contractual relationship between a lender and the borrower’s counterparties for the purpose of enabling the lender to gain control over the borrower’s contracts. Direct agreements are most common for project financings and other facilities where the value of the assets being financed at large depend on the borrower’s contracts. Examples are e.g... |
The Most Important Changes in the New Inheritance Act The new Inheritance Act enters into force on 1 January 2021. The law was passed on 15 May 2019 and replaces the current law from 1972. The most important change is pedagogical, as the law has a better language and a clearer structure. The language has been simplified, and terms such as «landowner» and «legatee» have been replaced by the common term «heir»... |
Short & Sweet – Financial Assistance Restrictions With ‘financial assistance’ in this context, we refer to assistance granted by a company in connection with the purchase of the shares in that company or its parent company. The most common example is that a company grants a guarantee or security in connection with the purchaser’s financing of the purchase price for the acquisition of shares in the company... |
Short & Sweet – Group Account Systems What is it? A group account system (Nw: konsernkonto) («GAS«) is a technical solution a bank may offer its customers that simplifies the process for lending amounts within the customer’s group. It can be a useful tool for managing and controlling the liquidity in the group and ensuring flexibility for allocating liquidity within the various participating group members... |
Short & Sweet – Priority of Security Interests in Aircraft Norway has acceded to the Cape Town Convention on International Interests in Mobile Equipment and its Protocol on Matters Specific to Aircraft Equipment (the «CTC»). The CTC has been implemented and given effect under Norwegian law as of 1 April 2011. It is still possible to register security interests over an aircraft with the Norwegian Civil Aircraft Registry («NCAR»)... |
Short & Sweet: Ship Sale and Purchase #8 – Default Provisions in Saleform 2012 Buyers’ Default Clause 13 of Saleform 2012 regulates Buyers’ default. The potential Buyers’ defaults are quite restricted to payment defaults. There are no Buyers’ default linked to failure to take over the Vessel (like you often find in shipbuilding contracts) or failure to provide the agreed documents. Nor is it likely that a Buyer will pay for the Vessel but not accept physical delivery... |
Short & Sweet – Licensing Requirements Contrary to what is the case in many jurisdictions, in Norway the business activity of lending is subject to strict licensing requirements. Only certain financial institutions are eligible for a license permitting them to conduct the business of lending in Norway... |
Short & Sweet – LIBOR Transition The London Interbank Offered Rate («LIBOR«) is arguably the financial world’s most important number; it is a proxy for banks’ marginal funding costs and serves as benchmark rate in millions of loans, floating-rate debt, and financial contracts. The publication of the LIBOR will in all likelihood, cease by the end of 2021. The shift from LIBOR is an immense change to global finance and will have far-reaching impacts on the financial services industry... |
Workers Hired from Temporary Work Agencies are Entitled to Performance-Related Bonus from the Company A temporary work agency had, over a period of four years, hired out workers to an oil company that had a bonus scheme at company level for its employees. The Supreme Court found that the bonus scheme was a form of performance-related pay and thus covered by the term «pay» in section 14-12 a subsection 1 (f) of the Working Environment Act. The temporary work agency was thus obliged to pay a bonus to the two workers as if they had been permanently employed in the oil company... |
The Norwegian Parliament Adopts New Corona Act On Wednesday 18 March 2020, the Norwegian Government put forward a bill which will give the Government vast authorization to fight Covid-19 and its consequences for the society. Today, 21 March 2020, a more narrow Corona act was adopted by the Norwegian Parliament. Read more about the initial proposal. After the initial critical voices, the Parliament chose to initiate a speedily hearing, where it invited i.a... |
Corona: The Importance of Contingency Planning and Risk Management Many businesses are struggling due to the Covid-19 outbreak and associated restrictions. They face immediate consequences in terms of reduced labor force, counterparties unable to deliver and own failure to deliver. In this phase, it is crucial for the business to be proactive and set out a plan to maintain operational operations and mitigate the risk. In a chaotic situation with unforeseen and complex consequences, one may easily react with panic... |
The Transport Sector is Exempted from Norwegian Equivalent to Article 101 TFEU - "Crisis Cartels" in the Wake of the COVID-19 Pandemic The Norwegian Ministry of Trade, Industry and Fisheries has adopted a new regulation exempting the transport sector from the prohibition in Section 10 of the Norwegian Competition Act; cf. FOR-2020-03-18-340. Section 10 is the national equivalent to Article 101 TFEU and 53 EEA. The new rules are set to apply for three months but may be prolonged or shortened, depending on how the ongoing covid-19 pandemic evolves... |
Enforcement of Security Interests and Repossession of Aircraft in Scandinavia – A Brief Practical Note The aviation industry came to a standstill this month due to the outbreak of the Covid-19 virus, and this has hit the airlines worldwide. With the majority of the fleet on the tarmac, we could potentially see a number of airlines defaulting on their lease agreements and loan facilities. The question of how to enforce security or repossess an aircraft could sadly turn out to be something the lessors and the lenders would have to look into more closely in the time to come... |
Far Reaching Legislative Measures to Fight Consequences of COVID-19 Outbreak Yesterday, Wednesday 18 March 2020, the Norwegian Government put forward a bill which will give the Government vast authorization to fight Covid-19 and its consequences for the society. It is called the corona act. The aim is to facilitate "sound and effective measures necessary to limit the disruption of normal social functions" of the Covid-19 outbreak (article 1)... |
State Aid Rules Open Up for Rescue Packages Many companies are now in crisis due to the Covid-19 outbreak. The European Commission and EFTA Surveillance Authority, therefore, ease state aid rules. In practice, large parts of the state aid rules and guidelines are now virtually "suspended... |
The Norwegian Government Proposes New Loan and Guarantee Schemes On 15 March 2020, the Norwegian government presented their proposal for new loan and guarantee schemes in the total amount of NOK 100 billion, to strengthen Norwegian companies' liquidity during the Covid-19 outbreak. The proposal includes: A NOK 50 billion funding which will be applied to issue guarantees in favour of banks as security for new loans granted to small and medium sized companies... |
Public Procurement Law and the COVID-19 Crisis The authorities have been quick to publish public procurement law guidance for the Covid-19 crisis. In this article we argue that Norwegian authorities could have provided even more clear guidance on what is to be considered at the crossroad between public procurement law and the protection of life and health. The exceptional Covid-19 crisis has given contracting authorities new and unforeseen challenges... |
Corona: Beware of Increased Cyber Risk Many organizations are these days in a phase of reorganizing their operations and establishing alternative solutions to ensure continued business work capacity. Meanwhile numerous hackers and other cyber criminals around the world are mobilizing themselves to take advantage of the extraordinary situation. All business should therefore be aware of a significant increase of cyber risk in relation to the current corona crisis... |
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