Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

NORWAY

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of January 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: May 11, 1967.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On January 15, 2007, Norway notified the IMF that in accordance with UN Security Council resolution, restrictions have been imposed on certain individuals and entities of the Democratic People’s Republic of Korea. On October 11, 2006, Norway notified the IMF that in accordance with (1) UN Security Council resolution, restrictions have been imposed on certain individuals and entities of Sudan and the Democratic Republic of the Congo; and (2) EU regulations, restrictions had been implemented against certain citizens of Belarus and entities linked to them. The restrictions involve the freezing of funds and other financial assets or economic resources and a prohibition against making funds, financial assets, or economic resources available to such persons and entities. 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 and the previous governments of the former Federal Republic of Yugoslavia and Côte d’Ivoire; (2) certain members of the current governments of Myanmar and Zimbabwe; and (3) Osama bin Laden, Al-Qaida, the Taliban, and other individuals and organizations associated with terrorism. Similar restrictions have been imposed on certain Liberian individuals and entities.
Other security restrictionsYes.
References to legal instruments and hyperlinksAct of June 7, 1968, No. 4, relating to the implementation of binding resolutions of the UN Security Council; Royal Decree of June 2, 2006; Prince Regent’s Decree of October 10, 2003, as amended June 3, 2005; Royal Decree of September 8, 2006; sanctions in force (in Norwegian only), www.lovdata.no.
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.
References to legal instruments and hyperlinksRegulation on Monetary Policy; Royal Decree, dated March 29, 2001; www.norges-bank.no.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNorway participates in the CLS system. Norwegian banks participate in EURO1, STEP1, and STEP2—pan-European clearing systems operated by the Euro Banking Association.
Regional arrangementsYes.
Administration of controlBanks and finance companies under supervision, including EU/EEA branches of such entities, are allowed to undertake foreign exchange activity. Specialized foreign exchange dealers may get authorization as finance companies. The Foreign Exchange Register Act requires that banks and finance companies report foreign payments to the foreign exchange register operated by the customs authority. In addition, the customs authority must report coins and notes brought from or into the Norwegian customs territory.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesResidents bringing coins or notes in domestic or foreign currency exceeding the equivalent of NKr 25,000 are required to notify the customs authority. Transport of domestic or foreign banknotes and/or coins across the border, through the postal service or by couriers, exceeding the equivalent of NKr 25,000 must be reported to the customs authority on the prescribed form.
References to legal instruments and hyperlinksCustoms Regulation of December 15, 1967, No. 8962, Article 4.5.7 and Article 4.10.2; Foreign exchange activity is regulated by the Financial Institutions Act (LOV 1988-06-10-40), www.kredittilsynet.no; Foreign Exchange Register Act (LOV 2004-05-28-29), www.ub.uio.no.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadThe notification and reporting requirement does not apply to transactions and/or average balances at the end of the previous 12 months exceeding the equivalent of NKr 100 million.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsAccounts belonging to the following are blocked: (1) certain individuals associated with the former government of Iraq; (2) certain individuals and entities of Liberia; (3) the previous government of the former Federal Republic of Yugoslavia; (4) certain members of the current governments of Myanmar and Zimbabwe; (5) individuals and organizations associated with terrorism; (6) certain individuals and entities of Côte d’Ivoire; (7) certain individuals and entities of Sudan and the Democratic Republic of the Congo; and (8) certain citizens of Belarus and entities linked to them.
References to legal instruments and hyperlinksSanctions in force (in Norwegian only), www.lovdata.no.
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 listDirect 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 licensesImport licenses are maintained mainly for MFN and preferential quota administration purposes.
Licenses with quotasYes.
Other nontariff measuresCertain measures are imposed for environmental, health, safety, sanitary, and phytosanitary reasons or to satisfy labeling requirements.
Import taxes and/or tariffsUnder the EEA agreement and other preferential agreements, most imports are not taxed. In general, tariffs applied on industrial goods are zero, except for some textiles and chemical products, whereas tariffs on agricultural products are higher. All products from least developed countries may be imported duty- and tariff-free. The national customs laws are being modified to enhance their legal structure and transparency.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExports subject to regulation are listed and require licenses.
Export taxesExports of fish and fish products are subject to levies varying between 0.3% and 0.75%, depending on the species and the stage of processing. In addition, a research and development duty of 0.3% is levied on most products.
Other export taxesYes.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsControl applies to the purchase of shares or other securities of a participating nature that may be affected by laws on inward direct investment and establishment. This includes general nondiscriminatory provisions on ownership control in financial institutions based on EEA directives.
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.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentControls apply to (1) acquisitions exceeding one-third, one-half, or two-thirds of the shares of the voting share capital of an enterprise owning or leasing secondary residences, unless authorization is granted; (2) investment in enterprises engaged in mineral exploration unless all members of the board of directors are Norwegian nationals; (3) establishment of branches of foreign banks; (4) establishment of branches of securities brokerage firms or management companies for collective investment funds; (5) investment in air transport, except through a limited liability company in which at least two-thirds of the capital is Norwegian; (6) investment in the accounting sector exceeding 49%, and in the legal sector by nonresidents; (7) ownership of Norwegian flag vessels, except (a) through a partnership or joint-stock company in which Norwegian citizens own at least 60% of the capital and (b) by registering the vessel in the Norwegian International Ship Register under the applicable conditions; (8) investment in a registered fishing vessel bringing foreign ownership of the vessel above 40%; and (9) investment in a national operating broadcasting corporation bringing foreign ownership above one-third of the corporation’s share capital.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsControls apply to the acquisition of secondary residences by nonresidents.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
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
Insurance companiesInsurance companies 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) and 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 compositionThe net financial assets of an insurance company in a given currency have to be equivalent to at least 80% of the technical provisions in the same currency at any time. An insurance company cannot have negative financial assets in a currency.
Pension fundsPension 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).
Currency-matching regulations on assets/liabilities compositionThe net financial assets of a pension fund in a given currency have to be equivalent to at least 80% of the technical provisions in the same currency at any time.
Investment firms and collective investment fundsInvestment firms are subject to nondiscriminatory exposure regulations. Net positions must be kept within 25% of these institutions’ capital liability (equity and subordinated loan capital). Collective investment schemes are subject to limitations on investments, which are related to the place of listing.
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadYes.
Currency-matching regulations on assets/liabilities compositionThere are no currency-matching regulations on the composition of assets and liabilities for investment funds.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Exchange measuresOctober 11. Norway notified the IMF that, in accordance with (1) UN Security Council resolution, restrictions were imposed on certain individuals and entities of Sudan and the Democratic Republic of the Congo; and (2) EU regulations, restrictions were implemented against certain citizens of Belarus and entities linked to them. The restrictions involved the freezing of funds and other financial assets or economic resources and a prohibition against making funds, financial assets, or economic resources available to such persons and entities.
Changes during 2007
Exchange measuresJanuary 15. Norway notified the IMF that in accordance with UN Security Council resolution, restrictions were imposed on certain individuals and entities of the Democratic People’s Republic of Korea.

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