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Norway
Norway


CONTENTS
 Executive Summary                                               3
 Background                                                      4
 Economic statistics                                             5
 Country credit rating                                           6
 Legal and regulatory                                            7
   Bank account issues                                           7
   Exchange controls                                             7
   Anti-money laundering legislation                             8
   Lifting fees practices                                        8
   Balance of payments/central bank reporting                    9
 Taxation                                                       10
   Resident/Non-resident                                        10
   Tax year                                                     10
   Corporate taxation                                           10
   Advance tax ruling availability                              10
   Thin capitalisation                                          10
   Transfer pricing                                             11
   Capital gains tax                                            11
   Stamp duty                                                   11
   Withholding tax (subject to tax treaties)                    12
   Tax treaties                                                 12
 Banking system                                                 13
   Regulatory framework                                         13
   Major domestic banks                                         13
   Market overview and trends                                   13
 Payment/Clearing systems                                       14
   Overview of different payment systems                        14
 Payment & collection instruments (domestic and cross-border)   15
   General overview                                             15
   Table of instrument usage                                    15
 Liquidity management                                           16
   Cash concentration/zero balancing/target balancing           16
   (Notional) pooling                                           16
 Electronic and internet banking                                17
   General overview                                             17
   Bank account structure                                       17
 Short-term investment alternatives                             18
   Bank deposits                                                18
   Interest payable on bank account surpluses                   18
   Commercial paper/CDs                                         18
   Government paper                                             18
   Money market funds                                           18
   Other                                                        18
 Trade finance                                                   19
 Useful contacts                                                20
 ING/SEB local contact details                                  21




                              Summary country report
                                         2
Norway


EXECUTIVE SUMMARY
         Norway is a member of the European Free Trade Association.
         Norway’s currency is the Norwegian krone.
         Norway’s country credit rating is AAA (source: Fitch Ratings)
         There are no restrictions on residents holding foreign currency accounts both
         within and outside Norway. Non-resident accounts in domestic or foreign
         currency are also permitted.
         The forward foreign exchange market operates under the supervision of
         Norges Bank and the Ministry of Finance.
         All transactions between residents and non-residents and all foreign currency
         transactions between residents have to be reported to Statistics Norway
         (and the Norwegian Banking, Insurance and Securities Commission in the
         case of financial companies) on a quarterly basis.
         Norway has an independent central bank, Norges Bank.
         There are 139 banks operating in Norway. Of these, 121 are regionally-
         based savings banks.
         There are two main interbank payment systems in Norway — NBO and
         NICS.
         NBO is a national RTGS system, operated by the central bank, Norges
         Bank.
         The other system is NICS (Norwegian Interbank Clearing System). This
         has three components — RTGS, multilateral netting and bulk payment net
         settlement. NICS is operated by BBS (Bankenes Betalings Sentral).
         Payment cards are the most popular payment instrument in Norway in
         terms of volume. In common with other European countries, electronic
         credit transfers are the predominant method of making payments, in terms
         of value. Paper-based credit transfers have been declining in use in recent
         years.
         Domestic and cross-border cash concentration techniques are available.
         Balance netting (also called single legal account cash pooling) is the most
         common domestic liquidity management technique. Zero balancing is also
         available.
         Notional cash pools are relatively expensive to arrange and therefore not
         widely used.
         Some banks offer domestic, cross-border and cross-currency interest
         compensation schemes, especially for accounts located in the Nordic
         region.
         Electronic banking is widely available in Norway, although there is no
         electronic banking standard.
         There are a wide range of alternative short-term investment instruments
         available in Norway.
         Norway is a member of the European Free Trade Association. As a result,
         Norwegian trade finance regulations are broadly aligned with the EU customs
         code and its associated regulations and commercial policies.




                              Summary country report
                                        3
Norway


BACKGROUND

Official name of country       Kingdom of Norway (Norge)
Capital                       Oslo
Other major cities            Bergen, Stavanger, Trondheim
Area                          323,802 km2
Currency/SWIFT code           Norwegian krone/NOK
Population                    4.66 million
Official languages             Norwegian
International dialling code   + 47
Public holidays               2009 —
www.goodbusinessday.com       1, 17, 21 May,
                              1 Jun,
                              25-26 Dec.
                              2010 —
                              1 Jan,
                              1, 2, 5 Apr,
                              1, 13, 17, 24 May, ,
                              25-26 Dec.
Head of State                 King Harald V (since 17 January 1991)

Head of Executive             Prime Minister Jens Stoltenberg (since 17 October 2005)
Next election due             September 2009




                                Summary country report
                                             4
Norway

    ECONOMIC STATISTICS

                                                                                                                             2008
                                                   2003     2004      2005         2006     2007
                                                                                                      Q1        Q2            Q3             Q4           YEAR
    Population                       x1,000,000      4.58     4.61      4.64         4.67     4.70         -         -               -             -           NA
    Exchange rate                Kroner per USD1   7.0802   6.7408    6.4425       6.4133   5.8617   5.3100    5.0833       5.3700        6.7967         5.6400

    International liquidity                 USD
                                                   37,220   44,308    46,986       56,842   60,840   55,597    50,396       44,269        50,959         50,959
    – total reserves                 x 1,000,000
    Deposit interest rate 1                   %      2.12     1.48      1.83          NA      4.86     5.28      5.67          6.12             NA             NA
    Unemployment                              %       4.3      4.4       4.6          3.5      2.5      2.5       2.8            2.5            2.6            2.6
    GDP deflator 2 3                           %     + 2.2    + 5.9     + 9.4        + 8.5    + 1.5   + 10.0    + 11.5            NA          + 1.9             NA
    Gross national                        Kroner
                                                    1,604    1,746     1,959        2,154    2,293         -         -               -             -           NA
    income                       x 1,000,000,000
    GNI per capita                Kroner x 1,000     350      379       422          461      488          -         -               -             -           NA
    Trade balance as % GNI                    %      12.4     13.2      16.1         17.8     15.4         -         -               -             -           NA
    GDP volume increase3                      %     + 1.1    + 3.8     + 2.8        + 2.2    + 3.2    + 1.4     + 5.2         + 0.6             NA             NA
                                                                                                                         Source: IMF, International Financial Statistics, March 2009

Notes:
1
    Period average;
2
    A broad measure of prices;
3
    Year-on- year.




                                                                   Summary country report
                                                                               5
Norway


COUNTRY CREDIT RATING

         FitchRatings rates Norway for issuer default as:-

                   Term                Local Currency Rating    Foreign Currency Rating
                   Short                           -                           F1 +
                   Long                           AAA                          AAA

           Long term rating alert                        Outlook Stable
                                                                Source: www.fitchratings.com April 2009




                                    Summary country report
                                              6
Norway


LEGAL AND REGULATORY

Bank account issues

Resident/non-resident status
          To have resident status, a company must:
          1. either have a registered office in Norway
          2. or maintain a branch in Norway.

Domestic and foreign currency account restrictions
          There are no restrictions on residents holding foreign currency accounts
          either within or outside Norway. Residents may also hold domestic currency
          accounts outside Norway. Non-resident accounts denominated in domestic
          currency (NOK) and foreign currencies are also permitted.
          All accounts are fully convertible.
          Interest-bearing current accounts and term deposits are available. The
          benchmark interest rate is the Norwegian Interbank Offered Rate (NIBOR).

Exchange controls

          The forward foreign exchange market operates under the supervision of
          Norges Bank and the Ministry of Finance.




                               Summary country report
                                         7
Norway


 Anti-money laundering legislation

               Norway has enacted anti-money laundering legislation, including legislation
               modelled on the first two EU Money Laundering Directives (Act on Money
               Laundering No. 41 of 2003 and Sections 147a and 147b of the Penal
               Code).
               As a Financial Action Task Force (FATF) member, Norway observes most of
               the FATF-49 standards. Norway is also a member of the European Economic
               Area (EEA).
               Norway has established a financial intelligence unit (FIU), the Central Unit
               for Investigation and Prosecution of Economic and Environmental Crime
               (ØKOKRIM/Hvitvaskingsenheten), which is a member of The Egmont
               Group.
               Financial institutions and a number of non-financial institutions are required
               to record and report suspicious transactions and to declare all incoming and
               outgoing cross-border transportations of currency equal to or exceeding
               EUR 3,000 to the FIU.
               Financial institutions must retain copies of any documents used to verify
               the customer’s identity for five years after termination of the customer
               relationship, and to keep transaction records for ten years.
               Account opening procedures require formal identification of the account
               holder.
               For natural persons, formal identification includes full name, signature,
               photograph and personal identity number (or D number which is issued to
               a foreign national). New legislation now permits electronic signatures to be
               a valid form of identification evidence. Nationality, including dual nationality,
               must be recorded for non-Norwegian nationals and the permanent address
               must be included.
               All legal entities are required to produce documentary evidence from
               the official register of companies. Any individual that represents either a
               registered or a non-registered entity must be verified.
               All financial institutions have to identify clients for all transactions exceeding
               EUR 12,000.
                            All information supplied by BCL Burton Copeland (www.bcl.com). Data as at January 2009.




 Lifting fees practices1

               Per item charges are usually levied on transfers between resident and non-
               resident bank accounts.




1        Lifting fees are additional charges on transfers between resident and non-resident bank accounts
and on international transfers, calculated as a percentage of the transaction value. These fees are deducted
from the principal of the transfer.




                                         Summary country report
                                                       8
Norway


Balance of payments/central bank reporting

Which transactions must be reported?
          All transactions between residents and non-residents and foreign currency
          transactions between residents have to be reported to Statistics Norway on a
          quarterly basis for balance of payments (BoP) statistics. These transactions
          which involve financial entities must also be reported to the Norwegian
          Banking, Insurance and Securities Commission.

Who is responsible for reporting the transaction?
          Norwegian banks are only responsible for submitting reports on their own
          account transactions and positions with non-residents. Banks submit
          quarterly and annual data integrated with joint accounting reports to Statistics
          Norway.
          Data from all other sectors is reported on a quarterly and annual basis
          directly by companies.

Are liquidity management schemes subject to BOP reporting?
          There are no specific requirements.




                               Summary country report
                                           9
Norway

TAXATION

Resident/Non-resident

         A company is generally considered resident in Norway if it is incorporated
         under Norwegian law, or if its effective management is located in Norway.

Tax year

         The tax year corresponds to the calendar year. However, companies may
         apply for assessment based on their financial year. Tax returns must be filed
         by the end of March of the year after the financial year-end. If the tax returns
         are delivered electronically they must be returned by the end of May of the
         year after the financial year-end.
         Companies are required to make two equal advance payments of tax
         based on the previous year’s tax assessment, increased or reduced by a
         percentage calculated by the tax authority.

Corporate taxation

         The rate of national corporate income tax is 28%. Income and capital gains
         are pooled, and the same rate of taxation therefore applies to both. A resident
         company is taxable on its worldwide income. Non-residents are liable to the
         same rates of taxation on all ‘Norwegian-source’ income.

Advance tax ruling availability

         It is possible to ask for a statement in advance from the tax authority
         (Skattedirektoratet). The transaction can not be carried out before the
         statement is issued.

Thin capitalisation

         Financing arrangements between related parties are within the scope of
         the transfer pricing regime under self-assessment, and adjustments must
         be made to ensure that tax returns are completed on an arm’s length basis.
         Where excessive interest is paid to a non-resident related party, there are
         provisions to deny a tax deduction for excess interest. Excess interest may
         also be treated as a dividend, and subject to withholding tax.
         No ‘safe harbour’ ratios are prescribed by statute except for financing
         arrangements which are taxed under the offshore tax regime. For such
         companies, where equity capital represents less than 20% of the aggregate
         of the company’s liabilities and equity capital on the balance sheet as at the
         year end, the interest deduction is restricted for tax purposes. It is typically
         assumed that the general safe harbour for financing arrangements for other
         businesses is the same, i.e. a debt/equity ratio of 4:1.


                              Summary country report
                                         10
Norway


Transfer pricing

         Companies are required to prepare their corporate tax return on arm’s length
         principles. The Norwegian transfer pricing rules are based on the OECD
         transfer pricing guidelines.

Capital gains tax

         Capital gains are taxed at the ordinary corporate tax rate of 28%.
         The gross sales proceeds arising on the disposal of assets in certain
         depreciation groups may either be treated (wholly or partly) as income, or
         deducted from the tax written-down value of other assets in the group.
         Gains on assets in other depreciation groups and gains on non-depreciable
         assets are for tax purposes allocated to the so-called capital gains and loss
         account, to the extent that the taxpayer does not elect to treat the gain as
         taxable income.
         Losses on such assets must be allocated to the account. This also applies to
         gains on the disposal of goodwill as well as gains/losses arising on acquired
         goodwill. At the end of each year, 20% of the balance on the account is
         added to or deducted from taxable income.
         Reinvestment relief is available where the disposal of the asset results from
         a fire, an accident or a compulsory purchase.
         The gain on sale of shares is calculated as the proceeds less the base cost
         for tax purposes, which is adjusted each year for taxes and dividends.
         From 26 March 2004 onwards, capital gains on shares and dividends are
         not taxable when a limited company sells the shares or distributes the
         dividend to another limited company. This is part of the exemption regime,
         fritaksmetoden, under Norwegian tax legislation.

Stamp duty

         A flat fee of NOK 1,935 is payable on the registration of loan agreements.




                              Summary country report
                                        11
Norway


Withholding tax (subject to tax treaties)

                                                                                                  Other
Payments to:                    Interest            Dividends             Royalties
                                                                                                 income
Resident companies                  -                     -                     -                     -

Non-resident companies              -                   25%                     -                     -


          No withholding tax is levied on payments made to resident companies.
          Dividends paid by resident companies to non-residents are subject to a
          withholding tax of 25%, unless a reduced tax treaty rate applies. No other
          withholding tax is levied on payments made to non-resident companies.
          Limited companies resident in EEA countries will not pay tax on dividends
          from a Norwegian company under the exemption regime.

Tax treaties

          Norway has tax treaties with various countries. Different rates of withholding
          tax can apply to dividend payments, depending on the terms of the agreement
          with the particular country. No withholding tax is levied on interest and
          royalties.
                         All tax information supplied by Deloitte LLP (www.deloitte.com). Data as at 1 April 2008.




                                   Summary country report
                                                 12
Norway


 BANKING SYSTEM

 Regulatory framework

 Central bank
                 Norway has an independent central bank, Norges Bank.

 Bank supervision
                 The independent Financial Supervisory Authority of Norway (Kredittilsynet)
                 is the body responsible for all financial, including bank, supervision. Its
                 authority derives from the Ministry of Finance.

 Major domestic banks

                                                                     Total assets (USD x 1,000,000)
 Bank
                                                                           31 December 2007
 Nordea Bank Norge*                                                                  660,546***
 DnB NOR Bank                                                                        214,428
 Sparebanken Vest**                                                                   13,813
 SpareBank 1 SR-Bank**                                                                13,472****
 Sparebanken SMN**                                                                    13,072
 Sparebanken Nord Norge**                                                              11,201
 Storebrand Bank                                                                        7,764
 Sparebanken Hedmark**                                                                  7,000
 Sparebanken Sør                                                                        5,550
 Nordlandsbanken                                                                        5,188
*Part of the Nordea banking group formed from the merger of Merita Bank (Finland), Nordbanken (Sweden), Christiania
Bank (Norway) and Unidanmark (Denmark).
** Parts of the Sparebank 1 Alliance.
*** Figures from 31 December 2008, **** figures from 31 December 2006.
                                                                                     Source: www.bankersalmanac.com



 Market overview and trends

                 There are 139 banks operating in Norway. Of these, 121 are regionally-
                 based savings banks and 18 commercial banks. There are additionally 46
                 branches of foreign credit institutions and three e-money institutions.
                 The major domestic cash management banks are Nordea Bank and DnB
                 NOR Bank. In addition, some of the major international cash management
                 banks have a presence in Norway.


                                           Summary country report
                                                        13
Norway


PAYMENT/CLEARING SYSTEMS
              There are two main clearing systems in Norway — NBO and NICS. NBO is
              a RTGS system, operated by the central bank, Norges Bank.
              The other system is NICS (Norwegian Interbank Clearing System). This
              has three components — RTGS, multilateral netting and bulk payment net
              settlement. NICS is operated by BBS (Bankenes Betalings Sentral).
              Norges Bank is expected to replace the NBO with a new RTGS system in
              2009, and is currently working in tandem with the provider to specify the
              requirements for its new system.
              In addition, there are proprietary systems in operation.
              EDB Fellesdata clears retail payments between smaller (level 2) Norwegian
                  banks before forwarding the cleared items to a specific level 1 bank
                  which operates as a private settlement bank.
              DnB NOR’s own system settles payments between many of the smaller
                  (level 2) Norwegian savings banks.
              Sparebank1 Midt-Norge also operates a priority private settlement system,
                  which is used by about 17 mid-sized mutual savings banks.

Overview of different payment systems

Clearing          Clearing        Transactions                                 Cut-off
system              type           processed          Value dating rules       time(s)
                                                    Settlement on same day
NBO              RTGS           High value          basis with immediate      16:30 CET
                                                    finality
                                High value (above
                                                    Settlement on same day
NICS/SWIFT                      NOK 25 million)
                 RTGS                               basis with immediate      16:45 CET
RTGS                            and urgent
                                                    finality
                                payments
                 Multilateral   Large value
NICS/SWIFT                                          Usually same-day
                 net            (below NOK 25                                 15:30 CET
Net                                                 settlement
                 settlement     million) payments
                                                                              05:30 CET
                                                    Same-day settlement       (for 06:00
                 Multilateral                                                 settlement)
                                Non-urgent, low-    is possible, but some
NICS Retail      net
                                value payments      payments are settled on   14:30 CET
                 settlement
                                                    a next-day basis          (for 15:00
                                                                              settlement)




                                   Summary country report
                                              14
Norway


PAYMENT & COLLECTION INSTRUMENTS
(DOMESTIC AND CROSS-BORDER)

General overview

           In common with other European countries, electronic credit transfers are the
           predominant method of making payments, in terms of value. Paper-based
           credit transfers have been declining in use in recent years.
           In terms of volume, payment cards are the most popular method of making
           payments.
           Banks in Norway have been implementing SEPA (Single Euro Payments
           Area) standards for EUR-denominated payments. Banks now only issue
           SEPA-compliant debit cards (since 1 January 2008). They are preparing to
           offer pan-European SEPA credit transfers from 28 January 2008. The SEPA
           direct debit (SDD) will be launched in November 2009.

Table of instrument usage

                   Transactions x                       Traffic (value) (NOK x
                      1,000,000       % change              1,000,000,000)                % change
                    2006     2007     2007/2006             2006            2007          2007/2006
Giros              489.3     510.7       4.4               8,904.8        10,428.8           17.1
– paper-based
                     51.9     48.4      - 6.7                224.7            216.5          - 3.6
 giros
– electronic
 giros
 (including
                   437.4     462.3       5.7               8,680.1        10,212.2           17.7
 credit
 transfers,
 direct debits)
Payment cards      851.0     966.9      13.6                 381.0            426.2           11.9
Cheques               0.7      0.5     - 28.6                  15.8            12.9         - 18.4
Total             1,341.0   1,478.1      10.2               9,301.6        10,867.9           16.8
                                                Source: Norges Bank, Annual Report on Payment Systems 2007




                               Summary country report
                                          15
Norway


LIQUIDITY MANAGEMENT

Cash concentration/zero balancing/target balancing

Domestic
           Domestic and cross-border cash concentration techniques are available.
           Balance netting (also called single legal account cash pooling) is the most
           common domestic liquidity management technique. Zero balancing is
           also available. Lending rules apply if resident and non-resident accounts
           participate in the same structure and so legal advice should be sought before
           a structure is implemented.

Cross-border
           Cross-border cash concentration techniques are also commonly available,
           especially amongst the Nordic countries. It can be difficult including non-
           resident accounts in a Norwegian cash concentration structure.

(Notional) pooling

Domestic
           Under Norwegian regulations, banks are not permitted to offset debit and
           credit balances. This means that notional cash pools are relatively expensive
           to arrange and, therefore, are not widely used.
           As an alternative, banks have developed interest rate enhancement products,
           mainly for Nordic companies. These can include resident and non-resident
           accounts.

 Cross-border
           Some banks offer domestic, cross-border and cross-currency interest
           compensation schemes, especially for accounts located in the Nordic
           region.




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                                          16
Norway


ELECTRONIC AND INTERNET BANKING

General overview

           Electronic banking is widely available in Norway. There is no electronic
           banking standard in Norway. Proprietary bank platforms provide their users
           with access to transaction and balance reporting and with the ability to
           initiate payments.
           One of the world leaders in internet banking, online services are widely
           available and offered to companies and individuals by all the larger banks.
           Almost 4.4 million internet banking agreements were in place (including
           approximately 348,000 agreements between banks and companies) at the
           end of 2007 and approximately 318.8 million giro transactions were effected
           online in 2007.

Bank account structure

National
           Norwegian bank accounts can be identified by the use of:
           A four numeric digit bank/branch code.
           A six numeric digit account number.
           A final numeric check digit
           The eleven digits are submitted electronically as a single field, with the bank
               code followed by the account number, with the final check digit.
           e.g. a Norwegian bank account number could be:
               33040056391

International Bank Account Number (IBAN)
           These numbers are also used in the determination of the Norwegian IBANs.
           All Norwegian bank accounts are represented by a fifteen digit alpha-numeric
           code:
               NO-dd-bbbb-aaaaaaaaaaa
           Where:
           AT is the two digit ISO Country Code for Austria;
           dd are two IBAN check digits;
           bbbb represents the bank/branch code; and
           aaaaaaa is the six digit account number plus the check digit.
           e.g. the IBAN for the above number could be:
               NO-19-3304-0056391




                                Summary country report
                                          17
Norway


SHORT-TERM INVESTMENT ALTERNATIVES

Bank deposits

         Time deposits for a range of maturities (from overnight to over a year) are
         readily available in domestic (NOK) and major foreign currencies, although
         they can be subject to a minimum investment requirement.

Interest payable on bank account surpluses

         It is possible for companies to open interest-bearing current accounts,
         although they are not usually interest-bearing. The interest rates on such
         accounts tend to be low and are typically only applied above a threshold
         balance.

Commercial paper/CDs

         Commercial paper and certificates of deposit (CDs) are both available in
         Norway.

Government paper

         The Norwegian government issues Treasury Bills, either directly by Norges
         Bank or via banks acting as dealers.

Money market funds

         Money market funds are available in Norway. The Norwegian mutual fund
         association’s definition of rentefond includes both money market and bond
         funds.

Other

         There is an active repo market in Norway.




                             Summary country report
                                       18
Norway


TRADE FINANCE
         Norway is a member of the European Free Trade Association. As a result,
         Norwegian trade finance regulations are broadly aligned with the EU customs
         code and its associated regulations and commercial policies.




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                                       19
Norway


USEFUL CONTACTS

National investment promotion agency

         Innovation Norway                                    www.innovasjonnorge.no

Central bank

         Norges Bank                                             www.norges-bank.no

Supervisory authority

         The Financial Supervisory Authority of Norway           www.kredittilsynet.no

Payment system operator

         BBS (Bankenes BetalingsSentral)                      www.bbs-nordic.com/no/

Banks

         Nordea Group                                                 www.nordea.no

         DnB NOR Bank                                                 www.dnbnor.no

         Fokus Bank                                                     www.fokus.no

Stock exchange

         Oslo Stock Exchange                                         www.oslobors.no

Ministry of finance

         Ministry of Finance                     www.regjeringen.no/nb/dep/fin.html

Ministry of trade

         Ministry of Trade and Industry         www.regjeringen.no/nb/dep/nhd.html

Chamber of commerce

         Oslo Chamber of Commerce                         www.oslohandelskammer.no

Bankers’ association

         Norwegian Financial Services Association                         www.fnh.no

         Norwegian Savings Banks Association              www.sparebankforeningen.no




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                                           20
Norway


SEB LOCAL CONTACT DETAILS




                                SEB
                                P.O.Box 1843 Vika
                                Filipstad Brygge 1
                                NO-0123 Oslo
                                Sigrun Eggen Fredriksson
                                +47 22827043
                                cmreferral@seb.se




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                        21

				
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