Chapter

NORWAY

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of February 29, 2004)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 11, 1967.
Exchange Arrangement
CurrencyThe currency of Norway is the Norwegian krone.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the krone is determined on the basis of supply and demand in the foreign exchange market. Monetary policy is anchored in accordance with an inflation-targeting framework.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsYes.
Use of foreign exchange among residentsEffective January 1, 2004, use of foreign exchange for cash payments between residents is permitted, subject to notification to the Bank of Norway (BN). Previously, foreign exchange cash payments between residents were not allowed.
Payments arrangementsNo.
Administration of controlThe BN exercises control in cooperation with the MOF.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On February 24, 2004, Norway notified the IMF that, in accordance with the relevant UN Security Council Resolutions, measures have been taken to freeze financial assets and impose restrictions on financial transactions with respect to: (1) certain individuals associated with the former government of Iraq (effective May 25, 2003, UN Security Council Resolution No. 1483) and the previous government of the former Federal Republic of Yugoslavia; (2) certain members of the current governments of Myanmar (effective August 15, 2003) and Zimbabwe (effective July 4, 2003); and (3) individuals and organizations associated with terrorism. Effective September 26, 2003, financial sanctions imposed against Libya were lifted following the adoption of UN Security Council Resolution No. 1506.
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesA resident or nonresident who on entry into or departure from Norway is carrying Norwegian and/or foreign banknotes and coins equivalent to more than NKr 25,000 a person a journey is required to notify the Customs Administration on the prescribed form.
A resident or nonresident staying in Norway who receives a dispatch by post, courier, or other form of transport containing Norwegian and/or foreign banknotes and coins from abroad, or who sends such a dispatch abroad, equivalent to more than NKr 25,000, is required to notify the BN in writing.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadA notification and reporting requirement applies if transactions and/or average balances at the end of the previous 12 months exceed the equivalent of NKr 100 million.
Accounts in domestic currency held abroadA notification and reporting requirement applies if transactions and/or average balances at the end of the previous 12 months exceed the equivalent of NKr 100 million.
Accounts in domestic currency convertible into foreign currencyA notification and reporting requirement applies if transactions and/or average balances at the end of the previous 12 months exceed the equivalent of NKr 100 million.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThe accounts belonging to the following are blocked: (1) certain individuals associated with the former government of Iraq and the previous government of the former Federal Republic of Yugoslavia; (2) certain members of the current governments of Myanmar and Zimbabwe; and (3) individuals and organizations associated with terrorism.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listThe direct or indirect imports of all rough diamonds, round logs, and timber products from Liberia are prohibited. Imports of cultural items from Iraq are prohibited. Other imports subject to regulation are listed and require licenses.
The trade in or transfer of cultural property that has been removed from Iraq illegally is prohibited.
Other imports subject to regulation are listed and require licenses.
Open general licensesYes.
Licenses with quotasYes.
Other nontariff measuresCertain measures are imposed for sanitary or phytosanitary reasons or in order to satisfy labeling requirements.
Import taxes and/or tariffsUnder the EEA agreement and other preferential agreements, most imports are not taxed. In general, tariffs on industrial goods are low, while tariffs on agricultural products are higher. All products from the least-developed countries may be imported duty- and tariff-free.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExports subject to regulation are listed and require licenses.
Export taxes
Other export taxesYes.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThe BN has not issued any foreign exchange regulations governing these transactions. The only control applies to the purchase of shares and other securities of a participating nature that may be affected by laws on inward direct investment and establishment.
Controls on derivatives and other instruments
Purchase abroad by residentsCollective investment schemes, insurance companies, and private funds are subject to nondiscriminatory limitations on exposure to derivatives.
Sale or issue abroad by residentsLimits on exposure to derivatives apply to issues by residents of derivatives abroad and locally.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentThe BN has not issued any foreign exchange regulations governing these transactions. The only control applies to the purchase of shares and other securities of a participating nature that may be affected by laws on inward investment and establishment. This includes general nondiscriminatory provisions on ownership control in financial institutions based on EEA directives.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Credit institutions and investment firms are subject to nondiscriminatory, exposure regulations. Net positions must be kept within 25% of these institutions’ capital liability (equity and subordinated loan capital).
Investment regulations
Abroad by banksThe book value of a bank’s domestic and foreign holdings of real property, and shares in real estate holding companies may not exceed 4% of total assets.
Savings banks are not allowed to acquire or purchase shares in a sea vessel.
In banks by nonresidentsNondiscriminatory rules on ownership control in financial institutions, based on EEA directives, apply.
Open foreign exchange position limitsCredit institutions and investment firms are subject to exposure regulations. Net positions of up to 15% of institutions’ equity and subordinated loan capital may be taken out in individual currencies, and the aggregate positions must be kept within 30% of the financial institutions’ equity and subordinated loan capital.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsInsurance companies and pension funds are subject to controls regarding classes of investments held against technical provisions to ensure a sufficiently diversified portfolio (e.g., there is a combined cap of 35% on domestic and foreign shares). Collective investment schemes are subject to limitations on investments, which are related to the place of listing.
Insurance companies are subject to nondiscriminatory exposure regulations. Net positions must be kept within 4% of non–life insurance companies’ technical provisions and within 3% of life insurance companies’ technical provisions.
Currency-matching regulations on assets/liabilities compositionThere are no currency-matching regulations on assets/liabilities composition for investment funds. However, such regulations exist for insurance companies and pension funds, for which net financial assets in a given currency have to be equivalent to at least 80% of technical provisions in the same currency at any time. An insurance company cannot have negative financial assets in a currency.
Other controls imposed by securities lawsOther controls are included in the Act on Securities Funds and Rules for Asset Management, and regulations on insurance activities and pension funds.
Changes During 2003
Arrangements for payments and receiptsMay 25. Restrictions were imposed on financial assets and financial transactions with respect to persons and entities associated with the former government of Iraq (UN Security Council Resolution No. 1483/2003).
July 4. Restrictions were imposed on financial assets and financial transactions with respect to certain individuals of Myanmar.
August 15. Restrictions were imposed on financial assets and financial transactions with respect to certain citizens of Zimbabwe.
September 26. Restrictions on Libya were lifted (UN Security Council Resolution No. 1506).
Changes During 2004
Arrangements for payments and receiptsJanuary 1. Use of foreign exchange for payments in cash between residents was permitted, subject to notification to the BN.
February 24. The authorities informed the IMF of certain restrictions imposed in accordance with the relevant UN Security Council resolutions.

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