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Country Commercial Guides FY 2000: Norway Report prepared by U.S. Embassy Oslo, released July 1999 Note*

CHAPTER VIII. TRADE AND PROJECT FINANCING

Banking system:

Participants in the Norwegian banking market vary from large full-service banks active in both the wholesale and retail sectors to small private institutions. There is also a range of savings banks, and the Post Office runs a giro system. The banking system, i.e., the actual payment system, is highly automated and computerized. Banking activities are regulated by the Commercial Banking Act, the Savings Bank Act and the Act on Financing and Finance Institutions. Recent liberalization of regulations now permits foreign banks to operate in Norway.

The Bank of Norway (the Central Bank) is a joint-stock company where the government has all the shares. It is the executive and advisory entity for monetary, credit and exchange policy. It is the sole bank of currency issue.

Commercial banks enjoy a very close relationship with trade and industry. Savings banks have a long tradition in Norway and also cover a substantial part of local credit requirements.

Merchant banks have not achieved the same position in Norway that they enjoy in some countries. This is partly because of the market dominance by the very large commercial banks, all of which maintain specialized departments covering the areas generally regarded as typical of merchant banking.

There are special banks for fisheries, agriculture, shipping, industry, house building, and export finance. The State, to varying degrees, participates in all of these.

Exchange controls

The Norwegian krone (NOK) had been connected to the European currency unit, the ECU, through the European monetary system (EMS). This was a unilateral connection and other EMS members had no obligations with regard to coordination with Norway. From December 10, 1992, the NOK has been floating, and the Bank of Norway intervenes in the foreign-exchange market when appropriate.

In 1990, all currency and foreign-exchange controls were abolished. There are no longer any licensing requirements in force. The only requirement in force is a reporting requirement for international payments and financial transactions. This reporting is generally taken care of by the transaction bank.

General financing availability:

In principle, all kinds of financing are available to foreign investors. Overdrafts and mortgages are available from banks, which will also assist in the issuance of such financial instruments as discount bonds, convertible bonds, etc.

Financial lease arrangements are supplied by leasing companies. If a leased asset is financed through funding abroad, a license is required from the Bank of Norway. If the lessee is foreign and the agreement is of a financial character (financial leasing), a license is required. No license is required if the leasing agreement can be said to be operational.

Venture capital and merchant banking is not highly developed, but does exist. Under very strict conditions it is possible to obtain fresh capital at the stock exchange.

Export financing

Eksportfinans A/S finances exports of Norwegian capital goods and services on both market- and government-supported terms. The financing programs are designed to promote the sale of Norwegian capital goods and services, and financing is also available to foreign buyers.

Eksportfinans A/S
Dronning Mauds gt. 15
0250 Oslo, Norway
Tel: (47) 22 83 01 00
Fax: 011 (47) 22 83 22 37

Credits on market terms are given for purchases of Norwegian capital goods. Eksportfinans extends credit on market terms at competitive rates, ensuring that the financing is appropriately matched to project requirements in terms of currencies, loan period, interest rates and repayment structure.

Eksportfinans also administers a number of trade-subsidy schemes on behalf of the Norwegian government. Where exports are involved, the GON is able to offer subsidized fixed-rate loans to most countries.

Government-supported loans are regulated under the OECD consensus agreement. This scheme was introduced to enable Norwegian exporters to match the financing terms offered by foreign competitors. The loans are repayable in equal semi-annual installments, and the interest rate is fixed for the entire period of the loan.

Norway has no significant financing programs available for either domestic or foreign investors. One exception is investments in northern Norway, where a reduced payroll tax schedule and other incentives apply. There are no free-trade zones, although taxes are minimal on Svalbard. A state industry and regional development fund provides support (e.g., investment grants and financial assistance) for industrial development in areas with special employment difficulties or with low levels of economic activity.

Major Norwegian banks--and two U.S.banks operating in Norway

Den norske Bank A/S		Chase Manhattan Bank Norge A/S
P.O. Box 1171, Sentrum		Fr. Nansens Plass 1
0107 Oslo, Norway		0160 Oslo, Norway
Tel: (47) 22 48 10 50		Tel: (47) 22 94 19 19
Fax:  22 48 27 10		Fax: 22 42 58 61

 
Kredittkassen			Citibank International PLC	
Middelthunsgt. 17		Norway Branch
0368 Oslo, Norway		Tordenskjoldsgate 8/10
Tel: (47) 22 48 50 00		0116 Oslo, Norway
Fax: (47) 22 48 61 97		Tel: (47) 22 00 96 00
				Fax: (47) 22 00 96 96