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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. Numerous changes at the sectoral level have taken place since the last Trade Policy Review of 
Norway in 1996.  Some of these are the result of adjustments required to comply with engagements 
under the EEA and WTO Agreements, particularly in agriculture and services.  In agriculture, price 
support measures have to some extent been replace d with direct income payments.  Nevertheless, 
assistance to domestic producers is still high, and ta riffs for agricultural goods remain way above 
average. 
2. A wide range of manufacturing activities exist in Norway, although their share in GDP has 
been shrinking in recent years.  In 1999, the sector contributed 10. 4% of GDP (Table IV.1), and 
exports of manufactured products accounted fo r some 30% of total merchandise exports.  A 
substantial part of manufacturing activities are con centrated around petroleum, shipbuilding and metal 
processing.  
3. The petroleum and natural gas industry is the backbone of the Norwegian economy.  Norway 
is the largest exporter of crude oil outside OPEC , ranking second in the world after Saudi Arabia.  
Norwegian petroleum exports contributed some 30 % of Norway's total export earnings.  Although 
open to foreign companies, State ownership in the hydrocarbons sector is substantial. 
4. The services sector accounts for some two thirds of GDP, and has been expanding at rates 
similar to or above GDP during the second half of the 1990s, particularly in the areas of financial 
services, tourism, and telecommunications.  Norway's GATS Schedule grants unlimited market access 
and national treatment for cross-border supply, c onsumption abroad and commercial presence of a 
number of services, including telecommunications, construction and related engineering services, 
distribution services and transport services.  Ma rket access through commercial presence in banking 
and other financial services is subject to certain c onditions with respect to establishment.  In some 
cases these restrictions also apply to nationals;  in other cases, they appl y only to nationals or 
companies from outside the EEA.  The Government is set to maintain a certain percentage of 
Norwegian ownership in banking.  The reform of the telecommunications sector in Norway has 
somewhat lagged behind that of other European countries; the market was fully liberalized only 
in 1998. 
(2) AGRICULTURE  
(i) Features 
5. The agriculture sector is relatively small;  it contributed an estimated 1.1% to GDP in 1997 
and employed 1.3% of the total work force.  Liv estock is the main activity, particularly the production 
of meat and meat products, and milk.  Among crops, the most important are cereals, and flowers, fruit 
(chiefly apples and pears) and berries (Table IV.2 ).  Production remained stagnant between 1994 and 
1997;  there was a decline in the value of productio n of meat, eggs and dairy products, while the value 
of production of grain and of vegetables increased. 
6. Protection rates in agriculture remain substa ntially higher than for manufactured goods.  The 
average MFN tariff rate in 1999 was 39.7%.  Excl uding fish and fish products, Norway is a net 
importer of agricultural products.  The main export products include feeding stuff for animals, dairy 
products (particularly cheese), and cereals and cereal preparations, while it imports a wider range of 
agricultural products. Norway WT/TPR/S/70 
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Table IV.1 
Gross domestic product and value added by industry at current prices, 1997-99 
(NKr billion and per cent) 
 NKr billion  % of total 
 1997 1998 1999  1997 1998 1999 
Gross domestic product 1,089.0 1,107.1 1,189.3  100.0 100.0 100.0 
Agriculture and hunting 11.9 12.3 11.9  1.1 1.1 1.0 
Forestry and logging 2.8 2.6 2.5  0.3 0.2 0.2 
Fishing and fish farming 7.3 9.0 9.0  0.7 0.8 0.8 
Oil and gas extraction 159.6 108.9 158.6  14.7 9.8 13.3 
Mining and quarrying 2.2 2.2 2.2  0.2 0.2 0.2 
Manufacturing 118.1 129.3 123.9  10.8 11.7 10.4 
Food products, beverages and tob acco 17.8 18.0 16.7  1.6 1.6 1.4 
Textiles, apparel, leather 2,.2 2.0 1.8  0.2 0.2 0.2 
Wood and wood products 4.8 4.8 4.4  0.4 0.4 0.4 
Pulp, paper and paper products  4.8 5.8 5.5  0.4 0.5 0.5 
Publishing, printing, reproduction 13.2 13.9 13.4  1.2 1.3 1.1 
Refined petroleum products 2.4 4.0 1.0  0.2 0.4 0.1 
Basic chemicals 6.6 6.8 6.3  0.6 0.6 0.5 
Chemical and mineral products 11.2 10.8 10.6  1.0 1.0 0.9 
Basic metals 8.3 10.0 10.6  0.8 0.9 0.9 
Machinery and other equipment 31.2 35.3 35.4  2.9 3.2 3.0 
Building of ships, oil platforms and modules 11.6 13.6 13.9  1.1 1.2 1.2 
Furniture 4.1 4.5 4.2  0.4 0.4 0.4 
Electricity and gas supply 25.3 25.4 26.0  2.3 2.3 2.2 
Construction 39.6 45.4 49.0  3.6 4.1 4.1 
Service industries excluding general government 436.7 466.6 492.4  40.1 42.1 41.4 
Wholesale and retail trade 98.6 102.9 107.6  9.1 9.3 9.0 
Hotels and restaurants 13.8 15.3 16.7  1.3 1.4 1.4 
Transport via pipelines 13.0 13.4 14.6  1.2 1.2 1.2 
Water transport 18.3 17.9 16.7  1.7 1.6 1.4 
Ocean transport 15.9 15. 4 14.0  1.5 1.4 1.2 
Inland water and costal transport 2.4 2.6 2.7  0.2 0.2 0.2 
Other transport industries 44.9 47.2 50.7  4.1 4.3 4.3 
Post and telecommunications 19.8 20.0 20.2  1.8 1.8 1.7 
Financial intermediation 37.0 39.9 44.0  3.4 3.6 3.7 
Business services, etc. 63.5 73.6 78.2  5.8 6.7 6.6 
Dwelling services 66.0 68.4 71.3  6.1 6.2 6.0 
Service activities incidental to oil and gas extraction 7.2 7. 9 7.2  0.7 0.7 0.6 
Personal services 54.7 60 .3 65.2  5.0 5.5 5.5 
General government 166.1 180.8 193.0  15.3 16.3 16.2 
Mainland Norway (basic prices) 773.7 836.9 874.0  71.1 75.6 73.5 
Value-added tax and investment levy 104.4 110.5 112.7  9.6 10.2 9.5 
Other taxes on products, net 44.1 44.9 46.2  4.1 4.1 3.9 
Financial intermediation services indirectly m easured -28.5 -31.9 -38.2  -2.6 -2.9 -3.2 
Statistical discrepancy -0.4 1.1 0.3  -0.1 0.1 0.0 
Note: Gross domestic product is valued at market prices , while industries are valued at basic (factor) prices. 
Source:  Information provided by the Norwegian authorities. 
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Table IV.2 
Value of agricultural production, 1994-97 
(NKr million)  
 1994 1995 1996* 1997 
Total gross value 21,291 21,028 21,413 21,117 
Cropsa, total 5,182 5,482 5,624 5,702 
Grain, dry peas and oil-seeds 2,115 2,448 2,588 2,582 
Other seeds 26 38 50 57 
Potato 531 516 514 544 
Hay 44 45 41 42 
Vegetables 781 816 850 870 
Fruit, berries, flowers 1,685 1,620 1,582 1,607 
Livestock products, total 15,224 14,422 14,593 14,245 
Milk 6,849 6,453 6,406 6,329 
Meat and porkb 7,136 6,851 6,984 6,895 
Wool 229 198 177 167 
Eggs 669 581 525 508 
Live animals -2 -2 -4 1 
Fur-bearing animals 300 290 453 286 
Rabbits and bees 42 51 53 59 
Other  905 954 1,088 1,116 
Changes in stocks -20 170 107 54 
a Excluding seed and feed used on the farms. 
b Including by-products. 
Source : Statistics Norway. 
7. Norwegian agricultural policy is currently aimed at improving cost efficiency, making the 
sector more competitive and market-oriented, and at achieving lower food prices.  Although some progress has been made in this respect, production costs and food prices remain high.  Agricultural 
policy also pursues objectives concerning income, re gional development, the agricultural landscape, 
and the environment.  These objectives and the mul tifunctional role of agriculture in general, have 
been gathering increasing weight in the last few y ears.  Policy measures in this direction include 
support to mountain dairy farming, promotion of environmentally friendly production, encouragement 
of labour-intensive production in rural areas, a Ru ral Development Support Scheme, and headage and 
acreage support.  In the context of the upcoming negotiations on agriculture, Norway is one the WTO 
Members supporting the consideration of agriculture  as a multifunctional activity.  For the Norwegian 
authorities this implies that agriculture is a provi der not only of food and fibre, but also of rural 
settlements, food security, a living cultural la ndscape, cultural heritage, and biodiversity. 
8. The main legislation regulating the agriculture sect or is the Marketing Act of 10 July 1936.  
There has been no change in the responsibilities of th e authorities in charge of policy formulation and 
implementation since the last Trade Policy Review of Norway in 1996:  the Ministry of Agriculture is 
responsible for all aspects concerning agricultural policies;  and regulatory measures are introduced 
by the Norwegian Agricultural Marketing Board.  Th is body is also responsible for the collection of 
producer levies, which, together with payments pr ovided by the Government through the Agricultural 
Agreement, are the main source of financing for the different support programmes in the sector.   
9. In December 1999, the Minister of Agricultu re presented to Parliament White Paper No. 19 
(1999-2000) stating the general policy goal of adap ting food production more closely to consumer 
interests.  Agricultural policy should be aimed at producing safe and healthy foods of high quality in 
the light of consumer preferences, and public goods such as viable rural districts, environmental and 
cultural benefits, and long-term food security.  Th e White Paper considers national food production a 
major element in securing long-term security, and also  argues for increased attention to consumers by Norway WT/TPR/S/70 
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encouraging competition in the food chain while k eeping  production and value creation in the whole 
of the country.  With respect to the WTO negotiati ons on agriculture, the White Paper states that the 
maintenance of reliable import protection is essen tial in securing room for manoeuvre and in giving 
preferential treatment to Norwegian production impor tant to agricultural policy goals.  Recognizing 
that export subsidies have negative effects on global food markets, the White Paper foresees a 
possible, gradual reduction of these. 
10. Government intervention to regulate prices and produ ction has declined in recent years, but  is 
still present in some areas.  Support remains high,  at about the same level as agricultural GDP.  
Production-limiting measures are used in the dairy sector, with quotas applied on milk production;  
quota arrangements were slightly modified in 1998 (see below).  Currently, administered prices are 
maintained for some grains.  Under the Agricultu ral Agreement, the Government is committed to 
purchasing grain up to a given amount at guaranteed pr ices.  This amount is negotiated each year with 
the Farmers Union, together with target prices.  In 1999, certain adjustment s to the agreement were 
announced, aimed at obtaining more flexibility in  the market and enhancing competitiveness.   Target 
wholesale prices, based on average domestic market prices, are used for meat, dairy products, poultry, 
eggs, and potatoes.  Maximum wholesale prices fo r milk products are no longer used.  Market 
intervention to secure target prices is funded main ly from producer levies, but also from the state 
budget.  Intervention takes the form of temporary tariff reductions when domestic prices exceed an 
upper limit above the target price for two consecutive weeks.  Intervention takes place if the domestic 
price for meat and eggs exceeds an upper price limit of  10% above the target price.  The upper limit is 
12% for fruit and vegetables . 
11. Administered prices for grain, together with target prices for other farm products, as well as 
the fiscal support to be accorded to agriculture, are laid down in the annual Agricultural Agreement 
between the Farmers’ Union and the Government .  The Agricultural Agreement is subject to 
ratification and appropriation of bu dget funds by the Parliament.  A llocations made for regulation of 
consumer prices have been abolished.  Support is provided for grains and oilseeds, fruit and 
vegetables, milk and dairy products , meat of bovine animals, veal, sheep, pig and poultry, eggs and 
wool.  Direct payments are used substantially, through schemes differentiated by region, size of 
farms, amount of arable land, and number of animals. 
12. Under the EEA Agreement, there are on-going bilateral negotiations between the EU and 
Norway concerning increased trade in basic agricultural products.  A Protocol 3 to the EEA 
Agreement concerning trade with processed agricultur e products is yet to be approved.  Meanwhile, 
trade in processed agricultural goods is governed by Protocol 2 of the free-trade agreement between 
the EC and Norway. 
13. Norway has notified the WTO Committee on Agriculture of its food aid programmes within 
the framework of the Decision on Measures Concerni ng the Possible Negative Effects of the Reform 
Programme on Least-Developed and Net Food-Importi ng Developing Countries.  In the notification 
for calendar year 1998, Norway reports food-rela ted relief aid of NKr 321.4 million and long-term 
programme disbursements of NKr 117.4 million.1 
(ii) Border measures 
(a) Tariffs and tariff quotas 
14. The applied average tariff on agricultural pr oducts (WTO definition) is 38.7% including 
ad valorem  equivalent rates (AVEs) of specific duties (33.6% if HS chapters 1-24 are considered) 
                                                      
1 WTO document G/AG/N/NOR/26, 9 March 2000. WT/TPR/S/70 Trade Policy Review 
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(Chapter III).  The average preferential rate for agri cultural products is just slightly lower, 38.5%.  
Preferences are granted to other EEA and EFTA St ates, to countries with FTAs with EFTA, and to 
countries benefiting from Norway's GSP scheme.  In the case of FTAs, preferences vary and are inscribed in each country's Bilateral Agricultural Protocol. 
15. Average bound rates remain well above applied duties as a result of the Uruguay Round.  
Average bound rates in 2000 stand at 94.4%, and show a wide dispersion, ranging from duty free for sugar for human consumption to 372.2% for meat  and edible meat offal.  Imports of most 
fruit and vegetables (potatoes, cabbages, cauliflo wer, tomatoes, Brussels sprouts, lettuce, 
cucumbers, artichokes, asparagus, celery, peppers, and others) are subject to seasonal tariffs 
(Chapter III(2)(iii)(d));  a range of imports of fruit and vegetables are duty free.  Import duty rates are 
determined through regulation and may vary consid erably according to the period;  the difference 
with out-of-season rates may sometimes be quite large. 
16. Tariff quotas are, in principle, applied to some 280 eight-digit HS headings and two headings 
at the four-digit level (goat meat HS 0204, and cheese HS 0406), on which Norway made minimum or current access commitments under the WTO Agreemen t on Agriculture.  In practice, however, only 
products subject to minimum access commitments (meat and meat products, poultry, eggs, cabbage 
and butter), are subject to quotas (Table IV.3).  Some products are subject to preferential quotas under 
the EEA/EFTA and related bilateral agreements (cheese,  hay, strawberries);  others are subject to GSP 
quotas (honey, corned beef, and some canned vegeta bles).  Imports of products subject to current 
access commitments under the WTO Agreement on Agricu lture take place in unrestricted quantities at 
MFN rates.
2  
17. Only out-of-quota rates are established in the Norwegian Tariff Schedule for products subject 
to tariff quotas.  In quota rates, under minimum a ccess commitments which were determined during 
the Uruguay Round, are one third of the MFN rates.  All imports of products for which there is a 
current access commitment take place  at the MFN rate, since in-quota rates are equal to out-of-quota 
rates.  Applied out-of-quota rates are all specific,  determined as krona per kilogramme.  Out-of-quota 
AVEs may reach three-digit levels for some vegetables (potatoes, tomatoes, cabbages, and other 
vegetables), as well as for meat.  Although Norway br ought forward to 1 July 1995 its final tariff 
bindings under the WTO Agreement on Agriculture , applied tariff quotas have increased under an 
annual schedule between 1995 and 2000, resulting in  different (and decreasing) weighted-average 
bound levels of protection each year.  Bound out-of -quota duty rates on farm and food products are 
high, ranging up to 372% in ad valorem  terms for milk products. 
18. Despite their relatively limited scope, the use of tariff quotas plays a significant role in 
shielding sensitive activities, such as meat and e gg production, from foreig n competition.  In the 
1996-98 period, in-quota imports of some products subject to minimum access commitments have 
been close to the ceiling set by the quota, which is an indication of strong demand for these products, 
despite the high levels of protection (Table AIV.1) . This was the case for swine, bovine meat, apple 
and pears, and, in 1998 only, for eggs.  Total imports of products subj ect to minimum access 
commitments are shown in Table IV.3. 
                                                      
2 WTO document G/AG/N/NOR/24, 5 January 2000. Norway WT/TPR/S/70 
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Table IV.3 
Tariff quotas and total imports for produc ts under minimum access commitment, 1999 
(Tonnes) 
Description of products Tariff it em number(s) Tariff quota Imports 
Minimum access quota    
Meat of bovine animal, frozen 02.02.1000; 2000; 3001;3009 904 2,230 
Meat of swine, frozen 02.03.2100 1,151 1,130 
Meat of sheep and goats, fresh, chilled or fr ozen 02.04.1000;  2100;  2200; 3000;  4100; 
4200;  4300;  5000 171 470 
Meat of Gallus domesticus 02.07.1200 200 77 
Meat of turkeys 02.07.2500 200 42 
Meat of poultry ducks, geese and guinea fowl 02.07.3300 200 36 
Meat of deer 02.08.9041 25 26 
Meat of elk 02.08.9042 100 85 
Meat of game 02.08.1000;  9030;  9099 250 249 
Butter 04.05.1000;  2000;  9000 532 182 
Hens eggs 04.07.0019 1,160 352 
White cabbage 07.04.9013;  9020 113 1,048 
Red cabbage 07.04.9040 113 14 
Apples 08.08.1011 8,000 16,820 
Pears 08.08.2021 250 4,540 
Source : Information provided by the Norwegian authorities. 
19. The import regime for agricultural products, in cluding tariff quotas, is administered by the 
Norwegian National Grain Administration.  Mini mum access quotas are allocated to the highest 
bidders at quota auctions;  allocations to impor ters are made by the Norwegian National Grain 
Administration, mostly during the month of October, and are valid for the following year.  The system 
of quotas allocation for turkey roll, meat of deer and elk, and meat of game, based on past import 
performance, was eliminated in 1998-99 and replaced by an auction system.  Quotas for meat for 
promotional fairs and product testing are allocated to  applicants to cover their special needs.  Tariff 
quotas for apples and pears are seasonal;  allocati ons are based on import performance in the past 
three years. 
20. Tariff quotas for canned vegetables and tongue of bovine meat, under the GSP, are allocated 
through an auction system.  Under the free-trad e agreements with Poland, Hungary, Estonia and 
Lithuania, Norway maintains tariff quotas that allow for duty-free importation of fruit and berries 
reserved for the Norwegian domestic industry.  Th e total quota of 3,570 tonnes is distributed as 
follows:  1,620 tonnes of frozen strawberries and 750 tonnes of frozen raspberries for Poland, 
200 tonnes of frozen raspberries and 500 tonnes of  apple juice concentrate for Hungary, and 
500 tonnes of apple juice concentrate for Poland, Estonia and Lithuania. 
(b) Non-tariff measures 
21. As a result of the WTO Agreement on Agriculture, Norway transformed its previous licensing 
requirements on agricultural products into bound ta riffs, with effect 1 January and 1 July 1995.  
Import licensing and restrictions are now limited to  feeding stuff in domestic animal production, and 
to genetically modified products (Chapter III(2)(v)(ii)). 
22. Norway has reserved its right to use the Special Safeguard provisions of the Agreement on 
Agriculture but has not invoked it to date.3 
                                                      
3 WTO documents G/AG/N/NOR/4, 3 May  1996;  G/AG/NOR/8, 21 February 1997; 
G/AG/N/NOR/16, 13 May 1998, and G/AG/N/NOR/21,18 February 1999.  WT/TPR/S/70 Trade Policy Review 
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(iii) Internal measures 
(a) Assistance levels 
23. Despite structural reforms in the agriculture sector in the past decade, support in Norway 
remains high.  According to calculations by the No rwegian authorities, support to agriculture accounts 
for some 1% of GDP, about equal to the sectors shar e of total GDP.  Total net budget outlays reached 
some NKr 12,057 million in 1998 (Table IV.4).4  Norway's Producer Subsidy Equivalent (PSE), as 
calculated by the OECD, was 75% in 1998, among the highest in the OECD area.5  Budgeted outlays 
were expected to have increased in 1999 with respect  to the previous year.  Deficiency payments, 
structural income support, acreage and headage support, as well as the vacation and replacement 
scheme are granted directly to farmers. Other pr ogrammes are mainly market regulation schemes and 
other indirect schemes.  Market regulation outlays are primarily financed through the marketing levy 
charged on producers when selling a product. 
Table IV.4 
Support to the agriculture sector 
(NKr million)  
 1997 1998 1999 (provisional) 
Total outlays of the Ministry of Agriculture 13,628 13,431 14,121 
Less: Revenue 1,688 1,374 1,297 
Net outlays 11,940 12,057 12,824 
Total outlays under the Agricultural Agreements 11,789 11,764 12,405 
Less:  Revenue 110 112 110 
Net outlays 11,679 11,652 12,295 
 Agricultural Agreements 10,069 10,379 .. 
 Agricultural Development Fund 515 515 .. 
 Market Regulation 96 96 .. 
 Other direct payments to producers 6,858 7,282 .. 
 Price support 2,599 2,486 .. 
 Milk and milk products 708 625 .. 
 Beef, veal, sheep-meat and pig-meat 890 878 .. 
 Cereals 708 671 .. 
 Wool 165 172 .. 
 Other 129 139 .. 
 Other direct payments to producers 6,858 7,282 .. 
 Structural income support 1,450 1,422 .. 
 Headage support, animals 1,692 2,015 .. 
 Acreage and cultural landscape scheme 3,354 3,385 .. 
 Production support on market crops 67 70 .. 
 Transport support, meat and eggs 83 81 .. 
 Other 213 310 .. 
.. Not available. 
Source:  Ministry of Agriculture. 
24. In 1998, the Aggregate Measure of Support (AMS) notified to the WTO totalled 
NKr 10,885.5 million, or some 88% of agricultural GDP .  Despite its high level, the total AMS was 
well below the total AMS commitment for the year, NKr 12,403 million.6   Most of the AMS consists 
in implicit transfers (revenue forgone), achieved by fi xing target prices and maintaining high levels of 
protection in the sector;  there is also support in the form of deficiency payments (Table IV.5). 
                                                      
4 This figure is not directly comparable with th e AMS, because it refers to actual outlays from the 
Ministry of Agriculture and includes "Blue Box" and "Green Box" measures, while  the AMS excludes these, 
and includes revenue forgone through price support, i.e. target prices, and possible disbursements from 
Ministries other than Agriculture. 
5 OECD (1999b). 
6 WTO document G/AG/N/NOR/25,  8 March 2000.  Norway WT/TPR/S/70 
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Table IV.5 
Product-specific Aggregate Measure of Support:  market price support, associated fees and direct payments, 1995-98  
 Total Aggregate Measure of Support 
(NKr million) 
Description of basic products (measure type) 1995 1996 1997 1998 
Wheat (fixed farm gate price) 492.8 372.4 361.6 4,881.0 
Barley (fixed farm gate price) 697.5 769.1 731.8 707.9 
Oats  (fixed farm gate price) 370.7 410.3 353.6 395.9 
Milk (target price, farm feed adjustment, base deficiency 
payments) 3,510.1 3,836.8 3,978.8 4,025.1 
Beef and veal (target price, transport subsidy, farm feed 
adjustment, base deficiency payments) 1,690.4 1,814.9 1,978.2 1,995.6 
Pork (target price, transport subsidy, farm feed adjustment) 1,704.0 1,879.9 1,852.4 1,899.7 
Sheep (target price, transport s ubsidy, farm feed adjustment, 
base deficiency payments, wool deficiency payments) 650.0 670.5 632.9 585.9 
Poultry (target price, transport subsidy, farm feed adjustment) 457.6 512.7 556.5 669.0 
Eggs (target price, transport s ubsidy, farm feed adjustment, 
contract production scheme ) 388.7 393.6 442.7 448.6 
Potatoes (target price, deficiency payment) 172.5 166.7 184.7 59.7 
Fruit, berries and vegetables (regional deficiency payment, 
transport subsidy) 76.7 55.6 54.8 47.4 
Total market price support  10,134.2 10,882.5 11,128.0 11,322.9 
Milk (associated fees and levies) -698.7 -449.8 -470.4 -412.4 
Beef and veal (associated fees a nd levies) -155.9 -190.9 -197.8 -192.4 
Pork (associated fees and levies) -360.3 -311.6 -308.6 -296.1 
Sheep (associated fees and levies) -11.5 -50.5 -48.1 -44.9 
Poultry (associated fees and levies) -62.2 -128.5 -113.9 -9.1 
Eggs (associated fees and levies) -128.4 -104.8 -96.9 -93.3 
Total associated fees and levies  -1,417.0 -1,236.1 -1,235.7 -1,130.1 
Milk (base deficiency payments)  432.4 344.8 258.4 172.6 
Beef and veal (base deficiency payments)  252.1 264.3 273.4 263.0 
Sheep (base and wool deficiency payments)  308.3 277.1 107.8 277.5 
Eggs (contract production scheme)  28.4 13.5 0.6 0.0 
Potatoes (deficiency payments)  39.4 53.9 41.2 19.6 
Fruit, berries and vegetables (fruit storage subsidy, transport 
subsidy)  9.8 9.8 9.8 4.7 
Total non-exempt direct payments 1, 070.4 963.4 691.2 737.4 
Other product-specific budget ary outlays 79.5 78.5 80.5 81.1 
Other non-product specific AMS -78.5 -80.4 -122.7 -125.7  
Total Aggregate Measure of Supp ort 9,785.7 10,529. 4 10,525.9 10,885.5 
Source : WTO documents G/AG/N/NOR/5, 30 September 1996, G/AG/ N/NOR/11, 19 Septembe r 1997, G/AG/N/NOR/22, 
29 April 1999, and G/AG/N/NOR/25, 8 March 2000. 
25. The prices of wheat, barley and oats are fixed at farmgate level.  Target prices are used for 
milk, beef and veal, pork, sheep meat, poultry, and potatoes.  Administered prices are roughly 
between twice and four times the external refere nce price established in accordance with the WTO 
Agreement on Agriculture.  Milk receives the high est support per unit of production, followed by 
different types of meat.  In absolute levels, the m ilk industry is also the main beneficiary, receiving 
some 37% of the AMS in 1998, followed by beef and veal with 18% of the total, and pork with 
some 17.5%.  These three products combined account for almost three quarters of total support (Table IV.5).  WT/TPR/S/70 Trade Policy Review 
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26. The share of non-exempt (linked to production) direct payments in the total AMS has been 
falling since 1995, due mainly to lower payments fo r sheep-meat and milk.  Base deficiency payment 
rates for (cow) milk have been d eclining, while those for meat have  remained stable (Table IV.6). 
Table IV.6 
Deficiency payments, 1997-99 
(NKr per litre or kg.)  
Base deficiency payments 1 July 1997–30 June 1998 1 July 1998-30 June 1999 
Milk 0.118 0.066 
Beef and veal 2.70 2.70 
Goat-meat 5.15 5.15 
Sheep-meat 4.90 4.90 
Regional deficiency payments 1 July  1997 –30 June 1998 1 July 1998-30 June 1999 
Milka 00/1.54 00/1.57 
Meata 00/13.00 00/13.00 
Wool 30.00 31.00 
a Minimum/maximum payment. 
Source:  Ministry of Agriculture. 
27. Norway also provides support under a number of production-limiting programmes 
("Blue Box" measures), as well as "Green Box" measures.  The value of measures included under 
the "Green Box" increased substantially in 1996, bu t has since declined (Table IV.7);  it totalled 
NKr 3.89 billion (some US$475 million) in 1998.  Pa yments under the Blue Box are substantially 
larger than those under the Green Box;  they reach ed NKr 7.88 billion in 1998.  Norway has three 
types of Blue Box measures:  payments based on fixed areas and yields (45% of total payments 
in 1997);  payments made on 85% or less of the ba se level of production (32%  of total payments, of 
which 20% for structural income support to dairy farmers and 6% regional deficiency payments to 
milk production);  and 6% are regional deficiency payments to meat producers, and headage support 
payments (23% of total payments).  Headage and acreage support is paid mainly within the Acreage 
and Agricultural Landscape Scheme and the Head age Support programme, based on cultivated area 
and number of animals, and differentiated by regi on, farm size and kind of animal.  To receive 
support, certain environmental criteria must be me t;  there is a maximum rate of support per farm. 
Table IV.7 
Measures exempt from the reduction commitment, 1995-98  
 Value of the measure during the reporting period 
(NKr million) 
Type of measure 1995 1996 1997 1998 
1.    Green Box 4,101.1 4,116.1  3,673.5  3,889.1 
General services 1,023.1 971.2 706.9 827.6 
Public stockholding for food security purposes 506.1 693.7 747.0 725.4 
Payments for relief from natural disasters 125.0 20.0 30.0 30.0 
Structural adjustment assistance 741.2 763.3 653.5 713.1 
Environmental programmes 180.4 161.0 180.0 187.8 
Regional assistance programmes 11.0 10.6 10.6 15.7 
Other 1,514.2 1,496.3 1,346.5 1,389.5 
2.    Blue Box 7,117.3 7,246.3 7,375.1 7,880.3 
Payments based on fixed areas and yields 2,750.7 3,209.0 3,305.1 3,752.1 
Payments made on 85% or less of the base level of production 2,495.5 2,426.2 2,392.2 2,380.3 
of which:     
      Structural income support to dairy farmers 1,539.3 1,482.5 1,442.7 1,424.8 
     Regional deficiency payments  to milk production 450.4 431.7 433.9 432.7 
     Regional deficiency payments to meat producers 505.8 512.0 515.6 522.8 
Livestock payments made on a fixed numb er of head 1,871.1 1,611.1 1,677.8 1,747.8 
3.    Total of table 11,218.4 11,362.4 11,048.6 11,769.3 
Source : WTO documents G/AG/N/NOR/5, 30 September 1996, G/AG/N/NOR/11, 19 September 1997, G/AG/N/NOR/22, 
29 April 1999, and G/AG/N/NOR/25, 8 March 2000. Norway WT/TPR/S/70 
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(b) Interest rate support 
28. The State Bank for Agriculture (SBA) provides cr edit to farmers at below market rates.  
Interest rates are determined taking into account ma rket interest rate conditions and the situation of 
the agriculture sector.  The inte rest rate charged on ordinary lo ans from the SBA was 5.9% in 1998, 
compared with a market rate of approximately 6.5%  in the same year.  Credit is granted mainly to 
support investment in the agriculture sector;  th e support element of these credits is budgeted under 
the Agricultural Rural Development Fund:  NKr 220 million were allocated for this purpose in 1998.  
(c) Levies and fees  
29. A number of levies and fees are applied on ag ricultural products.  Marketing fees are paid by 
producers, mainly for market regulation purposes;  they are levied on all agricultural goods, with the 
exception of vegetables, potatoes, fruit and berries.   Fees are charged per kg. and may vary throughout 
the year.  The authorities indicated that fees are determined on the basis of costs associated with 
market regulation and vary according to market e xpectations.  The overall costs are calculated on the 
basis of:  transport of goods between different parts of the country;  storage;  and export regulation.  
Fees vary during the year in accordance with the mark et situation;  for instance, fees are lowered for 
pork-meat production in November and December to  stimulate production for the Christmas season.  
The fee system is also used to discourage overprodu ction;  in this case, they are adjusted upwards.  
Fees are paid only by Norwegian farmers;  they are not levied on imports.  
30. Basic agricultural products and semi-processed agricultural products of Norwegian and 
imported origin are subject to the payment of th e inspection fee of 0.82%; the inspection fee for 
processed food is 0.64%.  Meat is subject to a meat  control fee that varies between slaughterhouses in 
relation to differences in efficiency and capacity .  Environmental levies are charged on pesticides. 
(iv) Export subsidies 
31. Export subsidies are applied on a number of products ;  they are notified annually to the WTO.  
Reflecting commitments in the Uruguay Round, Norw ay has been reducing outlays (Table IV.8).  
Exports of cheese account for the majority of subsidiz ed exports.  Exports of eggs and butter are also 
heavily subsidized.  Export subsidies continue to be funded mainly through producer levies, but also 
through government transfers through the Agricultural Agreement. 
Table IV.8 
Export subsidies, budgetary outlays and annual commit ments under the WTO Agreement on Agriculture, 1995-98  
(NKr million, calendar year) 
 Outlay allocated  Annual commitments 
 1995 1996 1997 1998  1995 1996 1997 1998 
Bovine meat 17.8 9.2 49.4 65.9  102.2 88.8 75.3 61.9 
Swine-meat 8.4 6.4 84.9 17.3  127.4 119.3 111.1 103.0 
Sheep-meat 1.6 6.3 25.2 9.6  25.9 24.3 22.6 21.0 
Poultry-meat 1.7 0.0 0.0 0.0  0.7 0.7 0.6 0.6 
Egg and egg products 19.4 16.1 17.7 13.1  25.3 23.7 22.1 20.5 
Butter 50.5 27.8 28.0 18.4  78.2 73.2 68.2 63.2 
Cheese 400.2 404.0 477.0 425.4  537.6 479.3 420.9 362.5 
Whey powder 3.1 0.0 0.0 0.0  4.4 3.5 2.7 1.8 
Fruit and vegetables 0.0 0.0 0.0 0.0  1.3 1.2 1.0 0.9 
Honey  0.0 0.0 0.0 0.0  0.0 0.49 0.4 0.3 
Processed agricultural products 24.7 35.5 41.5 32.9  25.4 4.79 45.0 42.1 
Source: WTO documents G/AG/N/NOR/3,  28 March 1996, G/AG/N/NOR/10,  20 May 1997, G/AG/N/NOR/18, 
17 June 1999, and G/AG/N/NOR/23, 16 November 1999.  WT/TPR/S/70 Trade Policy Review 
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(v) Assistance to specific subsectors 
(a) Dairy products 
32. Despite a certain opening of the milk and dairy sector, border protection remains high.  Actual 
imports of milk and other dairy produc ts are subject to face an average ad valorem  equivalent tariff of 
83% in 2000, while the average bound rate is 354.6% .  Tariffs may, however, be reduced in some 
cases by administrative decision;  the authorities i ndicated that this has occurred on a few occasions 
since 1996. 
33. High domestic prices, due to high tariffs and a policy of target prices, have encouraged 
production;  a shift in consumption patterns has, on the other hand, led to a reduced demand for milk.  
Reductions in milk quotas have taken place, but only with a time-lag leading to a situation where 
domestic supply has been larger than demand.  As a result, a small trade surplus in dairy products has 
been posted in the last few years, despite the la rge difference between domestic and international 
prices, with imports in the range of US$25 milli on annually, and exports of around US$80 million, 
largely in the form of cheese. 
34. The majority of producers are members of the dairy co-operative Tine Norwegian Dairies.  A 
new Milk Marketing Regime including a reviewed pr ice pooling system was established in 1997.  The 
price pooling system is aimed at equalizing producer  prices for milk irrespective of end use or 
whether it has been produced in remote areas.  A pr ice matrix that contains 21 reference products is 
used when the prices are set in th e Agricultural Agreement.  The pr ice matrix is the basis for the 
internal fees and refunds fixed within the price pooling system.  Target prices are set for 10 of the 
21 products.  The price pooling system replaced the prior equalization system under the Marketing 
Act. 
35. Producers of cow's and goat's milk receive va rious forms of government support through the 
Agricultural Agreement.  Milk producers receive production subsidies consisting of a base deficiency 
payment, for a maximum 1,600 million litres of cow's milk and 21 million litres of goat's milk, and a regionally differentiated price supplement for most  regions.  The deficiency payment to milk 
producers is paid for each litre of milk delivered to the dairy;  the amount varies according to region, 
with the northernmost districts receiving the highest support.  No changes with respect to the nature 
and scope of he deficiency payments system has taken place since the last Review of Norway.  Payment rates are determined each year according to  market conditions:  rates for cow's milk were 
reduced slightly in 1998/99 from 1997/98 levels, wh ile rates for goat's milk were substantially 
increased.   
36. In addition to base deficiency payments, a regi onal deficiency payment is granted to rural 
regions.  As an income equaliza tion measure between larger and smaller holdings, a structural 
income support is provided to each farm;  this is  paid as a lump sum.  For production lower than 
30,000 litres of cow’s milk, and 15,000 litres of  goat’s milk, payments are reduced.  A VAT 
compensation scheme fo r liquid milk and cheese was abolished in 1996.  Headage payments are granted 
for dairy cows, suckling cows and  goats;  the am ount per animal varies with the size of the herd. 
37. Supply control measures on the production of  milk include a quota system in place 
since 1983.  The system is aimed at maintaini ng the structure and geographical distribution of 
production by regulating the extens ion and establishment of milk production enterprises.  A portion of 
the quotas is purchased by the Norweg ian Agricultural Marketing Board for further sale.  In principle, 
there is no possibility of establishing new milk hol dings under the quota system, and it is difficult to 
extend the existing enterprises.  The total quota fo r 1999 was fixed at 1.6 billion litres;  several Norway WT/TPR/S/70 
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measures were used to curtail production by some 100,000 litres with respect to 1998.  In general 
terms, the quota system has shown scarce flexibility  and, as a consequence, the capacity in milk 
production has not been fully utilized.  In an attemp t to introduce some flexibility, a system for the 
purchase and sale of quotas among producers was put into force in 1997, to give producers an 
opportunity to utilize their capacity and increase thei r incomes.  New technology has been introduced, 
but large-scale operation advantages may not have been  fully exploited.  To maintain the regional 
distribution of milk production, the purchase and sale of milk quotas is only allowed within the nine targeted regions. 
38. After the changes implemented in 1997, only a few modifications in the milk marketing 
system were introduced in the Agricultural Agreem ent in 1998 and 1999.  Changes were introduced in 
the regional divisions of the quota programme;  th e trading of quotas is to take place first and 
foremost within each municipality, and only in the case of a surplus supply within a municipality, 
may quotas be sold within the present regional boundaries. 
39. Imports of butter are subject to minimum access commitments under the WTO Agreement on 
Agriculture;  quotas remained largely un filled (at around 13%) in 1997 and 1998. 
(b) Meat and eggs 
40. The meat market is regulated by the Norwegian Farmers' Meat Marketing Organization 
(Norsk Kjøtt);  regulation activities are guided by  the target wholesale prices established in the 
Agricultural Agreement, and include mostly  quantity and price stabilization measures . 
41. Producers of meat and eggs receive various form s of support.  Producers of bovine animals, 
and sheep receive a base deficiency payment for all th eir output, differentiated by region and type of 
meat, with the northern regions receiving the highest  payments.  Additionally, regional deficiency 
payments are granted to producers of meat in regions  classified as less favoured.  Transport support is 
granted to equalize differences in farm-gate returns caused by the distance of farms from 
slaughterhouses, processing plants, and the major consumer markets.  A deficiency payment for wool is provided to secure producer prices for wool.  As in the case of milk, compensation for the VAT 
charged on meat sales has been abolished.  For the production of eggs, the Agriculture Agreements 
for 1998 and 1999 introduced a regional deficiency paym ent for eggs for rural areas (western parts of 
Norway, the counties of Trondelag and northern parts of Norway).  Transport support is also granted. 
42. Imports of meat into Norway are very li mited (US$28.2 million in 1998), accounting for 
some 1% of total consumption;  this reflects the hi gh protection level, with an average applied tariff of 
180.2% in 1999 and a bound tariff of 372.2% in 2000.  Minimum access quotas granted under the 
WTO Agreement on Agriculture for meat and eggs we re not completely filled in 1997 or in 1998.  
The filling rates were particularly low in 1997 (Tab le AIV.1);  there were no imports of turkey and 
practically no imports of chicken in 1997 and 1998.  The authorities noted that in the latter case 
quotas were bought by importers but not used due to the market situation.  
(c) Grains 
43. Although the former state monopoly on imports of grains was eliminated in 1995, the 
Government purchases wheat, rye, oats and barley at  guaranteed farm-gate prices; these are the only 
products for which price guarantees are used in Norw ay.  Guaranteed prices are set in the yearly 
agreement between the Government a nd the two farmers' organizations.  
44. Applied tariffs for cereals are specific and high, w ith an average AVE tariff of 44.9% in 1999.  
Imports are relatively small (US $63 million in 1998), most of it wheat for human consumption, WT/TPR/S/70 Trade Policy Review 
Page 84 
 
 
reflecting the high protection in the sector.  Tariffs on grains fluctuate throughout the year, 
corresponding to changes in international markets and storage costs, which may trigger changes in 
guaranteed producer prices for Norwegian grain:  tariffs are determined as the difference between 
world prices and administered prices plus a margin of preference of NKr 50 per tonne on coarse grain 
and NKr 100 on grains for human consumption.  Th is arrangement is meant to make up for the non-
use of quantitative restrictions or indicative ceili ngs, and forms the basis of the Grain Price Support 
programme.  This programme is aimed at securing th e current level of production for food security 
reasons;  although tariff quotas have been determined for a range of grains in the WTO Agreement on 
Agriculture, all imports take place at MFN rates.  The Norwegian Tariff reflects maximum rates 
established for a whole year;  however, applied ra tes may be changed administratively during the 
year.  Tariff rates were set in such a way that domest ic grain was attractively priced for traders, while 
supplementary imports could be e ffected without resorting to quotas or indicative ceilings.  Average 
bound rates for HS chapters 10 and 11 were 221.1% and 305.9% in 2000.  
(d) Vegetables and fruit 
45. Imports of vegetables, which to talled US$119.3 million in 1998, were subject to an average 
AVE applied MFN tariff rate of 40. 5% in 1999.  Imports are in many cases subject to preferential 
treatment through the EEA Agreement, EFTA b ilateral trade agreements, and the GSP.  
46. Market regulation programmes are applied for apples, pears, potatoes and strawberries.  
Production of potatoes, fruit and berries receive ac reage support;  since 1998 this support, in the case 
of potatoes, is no longer linked to product quality.  Potato growers also receive deficiency payments, 
while producers of fruit, berries and vegetables benef it from regional deficiency payments.  Transport 
support and storage support is also provided.  
(3) FORESTRY , WOOD AND PAPER PRODUCTS  
47. Forestry and logging represented just 0.2% of GDP in 1998, but the industry is linked to 
Norway's regional policy and hence receives suppor t that goes well beyond its economic importance.  
The wood and wood products and paper industries combined accounted for nearly 1% of GDP in the 
same year, and for over 3% of total exports.  Norw ay is a net importer of wood and wood products;  
imports worth NKr 5.26 billion (some US$700 milli on) entered the country duty free in 1999, 
compared with rates of up to 5% in 1995.  Norway  is a net exporter of pul p, paper and paperboard 
products,  exports totalled NKr 12.1 billion in 1998, while imports we re NKr 6.7 billion.  Imports of 
pulp and paper, also enter Norway duty free, compared with rates of up to 15% in 1995. 
48. The main products of the wood processing i ndustry are timber, ch ipboard and building 
materials, and around half of production is export ed.  The pulp and paper industry is also mainly 
export-oriented.  Most exports go to the EEA area, and a small quantity to the United States and other 
countries.  The most important product is newspr int.  In addition, there is production of wood-
containing printing and writing paper, wood-free printing and writing paper, wrapping paper, 
corrugated board, sanitary paper, greaseproof pa per, board, and carton;  a few large companies 
account for most of the production.  
49. The forestry sector is assisted through sever al schemes administered by the Ministry of 
Agriculture through the National Forest Service (T able IV.9).  Total outlays under the different 
programmes were NKr 300.9 million in 1998, and NKr 298.7 million in 1999, some 15% of the 
forestry and logging industry's GDP.  Since its last Review in 1996, Norway has made a new Norway WT/TPR/S/70 
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notification concerning subsidies, including those for forestry.7  Although the number of subsidy 
programmes has remained unchanged, the amount of support granted to the sector has fallen 
substantially:  in 1998 it was less than two thirds of the support granted in 1994.  Several of the 
support programmes are driven by resource mana gement and cost equa lization (among regions) 
considerations.  The final stated aim is to pr event overexploitation of cer tain areas by extending 
forestry activities to more remote areas.  The di fference in exploitation and transportation costs among 
areas is generally taken into account when dete rmining the percentage of subsidization. 
Table IV.9 
Assistance to the forestry sector, 1997-98 
(NKr million) 
Year Assistance programme Type of measure Support 1997 Support 1998 
1965 Tax concessions in forestry, the Forest Trust Fund, and the 
Five-Year Average Tax Assessment tax concessions 77.0 76.0 
1971 Subsidies for forest management planning grants 36.1 35.7 
1931 Subsidies for afforestation an d silviculture grants 93.5 106.0 
1961 Subsidies for construction of forest roads grants 54.7 66.2 
1976 Subsidy for harvesting of roundwood in  difficult terrain grants 7.7 9.6 
1976 Subsidies for roundwood sale and transport grants 1.6 7.4 
 Total   270.6  300.9  
Source:  WTO documents G/SCM/N/38/NOR, 25 August 1998,   G/SCM/N/38/NOR/Suppl.1, 19 October 1999, and 
G/SCM/N/48/NOR, 19 October 1999. 
50. The Forest Trust Fund is a mandatory forest i nvestment scheme to encourage long-range private 
investments in forestry based on sustainable use of  forest resources.  The Forestry Act requires all 
forest owners to place into the Fund from 5 to 25% of their gross sales of r oundwood.  At the time of 
sale, the buyer automatically deducts a pre-decided percentage from the sales receipt, which is deposited in the forest owner's trust fund account at his lo cal bank and may be used for specified forestry 
investments.  Long-range forest investments may be fully written off and deducted on the income tax 
return the year the investment is made;  pe rcentages vary from 65% for investments up to 
NKr 50,000, to 95% for investments exceeding NKr 500,000.  Forest owners do not receive the 
interest on the Forestry Trust Fund;  this interest is used for the benefit of forestry at municipal, 
county or national levels.  In 1998, the amount di sbursed by the Forest Trust Fund Accounts to 
investment eligible for tax advantages tota lled NKr 176 million, while the non-taxable amount 
(subsidy element involved) totalled NKr 56 million.   
51. Under the Five-Year Average Tax Assessment Programme, Norwegian forest owners may 
benefit from an average tax assessment, whereby inco me tax is based on average income over the last 
five years, entailing a reduced marginal tax percentage compared with other income groups.  The method implies that the forest owner receives a tw o-year tax credit.  Revenue forgone for 1997 and 
1998 was estimated at between NKr 15-20 million. 
52. The Subsidies for Forest Management Planni ng programme makes grants available to all 
types of forest land and owners to stimulate fo rest management planning and promote sustainable 
forestry.  Grants cover resource registration survey s of larger designated areas and preparation of 
individual forest management plans on the individual properties, as well as training.  Subsidy rates are 
decided by the County Governor based on the total resource registration and plan preparation cost.  Area registrations may under certain circumstances be 100% subsidized;  subsidy rates for preparing 
individual forest management plan vary between  regions, averaging 60-70%.  The Subsidies for 
                                                     
 
7 WTO documents G/SCM/N/38/NOR, 25 Augu st 1998,  and G/SCM/N/38/NOR/Suppl.1, 
19 October 1999. WT/TPR/S/70 Trade Policy Review 
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Afforestation and Silviculture programme aims at  stimulating the establishment and composition of 
quality forests and securing district employment.  Grants are available throughout the country, although priority is given to northern and western Norway an d mountainous regions.  The grant is given either as a 
percentage of the total verified costs or as a per he ctare subsidy.  Subsidy rates differ according to the 
region and type of work.   
53. The aim of the Subsidies for Construction of  Forest Roads programme is to encourage 
construction and reconstruction of forest roads for transport of roundwood from the forest.  New rules for this programme, introduced since the last Review , are contained in Regulations on Planning and 
Approval of Roads for Agricultural Pu rposes of 20 December 1996.  All forest owners are eligible for 
grants for construction of new roads and for rec onstruction of existing ones on land where forestry 
may be economically operated;  however, priority is given to the northern, western and mountainous 
regions.  Support is calculated as a percentage of total costs;  maximum grant rates vary:  75% for 
northern Norway;  60% for western Norway and mountainous districts;  and 40% for other forestry regions.   The Subsidy for Harvesting of Round Wood in  difficult Terrain programme consists of 
grants for the sustainable utilization of forest res ources in steep terrain.  S ubsidies are allocated per 
hectare harvested based on the steepness of the terra in and length of the hillside.  The Subsidies for 
Roundwood Sale and Transport in Forestry programme  of grants aims at supporting wood 
transportation in northern Norway.  The grants fo r transport must cover only part of the costs 
exceeding the normal national average, in order to  cover a negative externality and not distort 
competition or prevent the eventual establishment of a local industry.  
(4) F
ISHING AND FISH FARMING  
(i) Features 
54. Fishing is one of the traditional sectors of the Norwegian economy, although it currently 
accounts for just 0.7% of GDP (1.3% if fish pro cessing is included).  Total catch in 1999 reached 
2.62 million tonnes, a slight decrease from 1997.  The main species by volume are herring, blue whiting, cod, sand eel, and mackerel (Table IV.10). 
55. The first-hand value of fishing reached NKr 9.9 billion (US$1.2 billion) in 1999, down  from 
NKr 10.5 billion in 1998;  the fi rst-hand value of landings from foreign vessels in Norway reached 
NKr 2.7 billion, up from NKr 2.3 billion in 1998.  In  terms of value, the most important species 
are cod (about a third of total value), herring,  prawns, and mackerel.  Aquaculture production 
reached 460,000 tonnes in 1999 with an export va lue of NKr 12 billion (US$1.4 billion), up from 
NKr 9.7 billion in 1998.  Half of the catch is used directly for human consumption, of which half is 
sold fresh or chilled, and half fro zen, while the rest is used for the production of meal and oil.  
Approximately 95% of farmed fish are exported. 
Table IV.10 
Quantity of catch by fish species, 1995-99 
(000' tonnes) 
Year Total Herring Blue 
whiting  Cod Sand eel Mackerel Capelin Deep 
water 
prawn HaddockNorway 
pout  Tusk Sprat Other 
fish 
species 
1995  2,524 687 261 365 263 202 28 39 80 118 19 41 232 
1996  2,647  763 356 358 161 137 208 42 97 103 20 59 344 
1997  2,862  923 348 402 351 137 158 42 106 47 14 7 327 
1998  2,850 832 571 322 343 158 88 56 79 28 21 35 317 
1999 2,618 827 534 257 188 161 87 64 53 51 23 22 351 
Source:  Directorate of Fisheries. Norway WT/TPR/S/70 
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56. Exports of fish and fish products represented 8.7% of total Norweg ian exports in 1999, 
totalling some NKr 29.8 billion (US$3.5 billion).  After oil, fisheries are the second most important earner of foreign exchange for Norway.  The main  exported species in 1999 were:  salmon and trout 
(40%);  fresh, chilled and frozen gr oundfish (18%);  cured groundfish (17%);  and  pelagic species 
(14%).  The main markets for fish and fish pr oducts in 1999 were Japan, Denmark, the United 
Kingdom, France, Portugal, Germany and Sweden.  Imports of fish and fish totalled NKr 4.5 billion (US$535.7 million) in 1999.  Imports of fish and fish products enter Norway duty free.  The main 
providers are Russia, Denmark, Iceland, the Un ited Kingdom, the United States, Peru and Canada. 
57. Norway had 21,274 commercial fishermen in 1999, of which 15,326 full time.  Some 
3,966 persons were employed in the aquaculture industry in 1998.  In total, there are around 40,000 jobs directly linked to the fishing and fish -farming industry.  There were 13,199 registered 
fishing vessels in 1999, of which some 65% (8 ,752 vessels) were actually engaged in fishing 
operations.  Some 3,000 vessels operated year ar ound.  The number of fishing vessels has been 
declining in recent years.  
(ii) Legal and institutional framework 
(a) Legal Framework 
58. The main legislation regulating fishing activiti es is Act No. 40 of 3 June 1983 on salt water 
fisheries.  Aquaculture is regulated by Act No. 68 of 14 June 1985 relating to the breeding of fish, 
shellfish, etc., Act No. 47 of 15 May 1992 concerni ng salmon and inland fish, etc., and Act No. 54 of 
13 June 1997 concerning fish disease.  The trade regi me is regulated by Act No. 3 of 14 December 
1951 on the marketing of raw fish;  Act No. 9 of 27 April 1990 relating to the regulation of exports of 
fish and fish products;  and Act No. 34 of 24 June 1994 relating to the registration as first-hand buyers 
of raw fish, etc. 
59. Through the EEA Agreement, Norway has adopted  EU regulations on animal health issues, 
and the EU safety and quality regu lations related to production a nd marketing of seafood.  Quality 
control is regulated by Act No. 12 of 28 May 1959 relating to quality cont rol of fish and fish products.  
Norway has an exemption from EEA rules for the importation and exportation of live salmon, roe and 
milt.  Since 1999, Norway has also applied the EU border control regime for live fish, and fish and 
fishery products originating in countries outside  the EEA.  The Norwegian fish processing industry 
has implemented a programme of "own checks" b ased on the HACCP system in processing plants and 
factory vessels.  The checking system covers both food safety and quality aspects.  Commercial standards are developed and supervised by the seafood industry.  Bilatera l agreements concerning 
sanitary and veterinary issues have been reached  with the quality control authorities in some 
important non-EEA markets, for example central and eastern Europe. 
60. The management of marine fisheries resources and the regulation of the aquaculture industry 
is the responsibility of the Ministry of Fisheries.  The Directorate of Fisheries is an advisory and 
executive body for the Ministry of Fisheries on admi nistration issues.  The Directorate's main tasks 
include regulation, guidance, inspection, monitoring of  resources, and quality control.  The Institute of 
Marine Research acts as an advisor organization to th e Ministry of Fisheries;  its main tasks include 
the investigation and monitoring of fish stocks , as well as work related to aquaculture.  The 
Norwegian Institute of Fisheries and Aquaculture  carries out research on biology, products, and 
markets on behalf of the Ministry of Fisheries.  The Research Council of Norway participates in the 
sector's policy formulation through the management  of research funds in accordance with guidelines 
by the Ministry of Fisheries (see below).  The No rwegian Industrial and Regional Development Fund 
(SND) administers the use of public policy instruments in relation to the fishing industry, including 
the fishing fleet and aquaculture activities. WT/TPR/S/70 Trade Policy Review 
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61. In accordance with Act No. 3 of 14 December  1951, the processing, selling or exportation 
of raw fish or related products may be prohibite d by Royal Decree, unless the fish have been sold 
first-hand by the intermediary or with the consent of an approved fishermen's sales organization.  
There are six sales organizations with legal competence to regulate the first-hand sale of raw fish, 
normally by setting the minimum price for each spec ies and controlling that the price decisions are 
respected.  They also have a legal obligatio n to establish commercial rules that embody the 
organization's general terms of sale.  The fishing organizations have the authority to stop fishing 
activities, or to restrict the activities whenever it is deemed necessary for market reasons.  The 
authorities noted that this authority is seldom used .  In accordance with Act No. 40 of 3 June 1983, 
the sales organizations have responsibility for the c ontrol of fish resources.  Act No. 34 of 24 June 
1994 replaced the former system of direct approval of first-hand buyers by sales organizations by a system of registration of first-hand buyers, which included both Norwegian and foreign companies. 
62. The Norwegian Seafood Export Council (NSEC) is responsible for the generic marketing of 
seafood in and from Norway.  It finances its activ ities by a levy on exports of fish and fish 
products.  The Council's marketing budget was about NKr 250 million in  1999, out of a total budget 
of NKr 390 million.  The NSEC operates under the Fish Export Act of 1990 (Act No. 9 of 27 April 
1990) and the Fish Export Regulation of 1991.  A dditionally, the NSEC operated under a provisional 
Regulation, which entered into force on 1 D ecember 1998 and contains price and quantitative 
measures and provides for the collection of an a dditional export levy on Norwegian salmon.  The 
additional levy is used for the generic marketing of Atlantic salmon.  There are no export restrictions 
to encourage local processing. 
(b) Resource management and control instruments 
63. Resources are managed and controlled through the establishment of total allowable catch 
(TAC) levels.  TACs are established according to agreements between relevant coastal states and national quotas.  Agreements at th e bilateral level are negotiated yearly, and currently exist with the 
EU, the Faroe Islands, Greenland, Iceland, Poland, and Russia;  with the exception of the arrangement 
with Poland, these include exchanges of quotas.  At the plurilateral level, Norway participates in an 
agreement with the EU, Russia, the Faeroe Islands and Iceland, for the management of the Norwegian 
Spring Spawning Herring.  Norway also participates in an agreement for the management of mackerel 
in the Northeast Atlantic, with the EU and the Faer oe Islands.  Norway has ratified the Agreement of 
4 December 1995 for the implementation of the prov isions of the United Nations Convention on the 
Law of the Sea of 10 December 1982, relating to the conservation and management of straddling fish 
stocks and highly migratory fish stocks.  Norway is a contracting party of the Northwest Atlantic 
Fisheries Organization (NAFO), the Northeast Atlantic Fisheries Organization (NEAFC), and the Convention for the Conservation of Antarctic Mari ne Living Resources (CCALMR);  all manage fish 
stocks in their respective convention areas. 
64. The TAC is set annually at a national level, by Ministry of Fisheries regulations, taking into 
account scientific advice provided by the Internationa l Council for the Exploration of the Sea (ICES).  
The total TAC is established in acco rdance with agreements with othe r coastal states and then divided 
between the states.  When the TAC is allocated be tween the relevant states, the Norwegian quota of 
each regulated stock is shared between groups of vessels, as group quotas.  Group quotas are then 
allocated to individual vessels either by individu al fixed quotas for each participating vessel or by 
maximum quotas.  The system of individual vessel quotas provides every participating vessel with a 
fixed and guaranteed portion of the quota group.  Within the system of maximum quotas, an upper limit is set for the annual catch.  As the sum of the allocated maximum quotas is higher than the group quota, the participating vessels are not guaranteed that  they may take their quota share.  In addition, 
time-period quotas, trip quotas and days at sea are used  to regulate certain fisher ies.  The fishing of a Norway WT/TPR/S/70 
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species is closed when the total group quota is exhaus ted.  A system of "over-regulation" is applied on 
vessel groups consisting of a large variety of boats, with  different activity level.  This is to make sure 
that the group quota is taken without any fo rmal redistribution within the vessel group. 
65. The total TAC for 1999 was set at 4.362 m illion tonnes, distributed among species as shown 
in Table IV.11.  Allocations are made both to No rwegian and foreign fishermen.  In 1999, some 56% 
of the total TAC was allocated by Norway, just slightly above the allocation for 1998 which was 53% 
of that year's TAC. 
Table IV.11 
TAC allocations, 1998 and 1999 
(Tonnes) 
 1998 1999 
Species TAC Allocations to 
national 
fishermen Allocations to 
foreign 
fishermen TAC Allocations to 
national 
fishermen Allocations to 
foreign 
fishermena 
Herring 1,334,000 823,580 411,750 1,645,000 825,800 412,050 
Capelin 1,265,000 159,150 0 1,280,000 160,000 0 
Cod 834,000 327,760 32,990 671,400 248,930 24,640 
Haddock 252,000 94,340 4,500 171,950 60,345 3,150 
Saithe 242,000 182,900 11,500 255,000 189,700 11,300 
Mackerel 111,350 157,160 15,970 173,805 157,160 15,970 
Plaice 98,200 3,310 0 113,200 3,595 0 
Whiting 75,200 6,280 0 52,000 4,545 0 
Redfish b b 5,500 b b 5,500 
Greenland halibut b b 100 b b 100 
Total 4,211,750 1,754,480 482,310 4,362,355 1,650,075 472,710 
a Third-country fishermen fishing in Norwegian waters, excl uding Russian quotas on joint Russian-Norwegian stocks in the 
Barents Sea and EU-quotas on joint EU-Norwegian stocks in the North Sea.  Includes bycatches. 
b No TAC fixed for redfish or Greenland halibut in 1998 and 1999;   a maximum intermixture of 25% allowed when fishing for 
species other than redfish. 
Source:  Ministry of Fisheries. 
66. Fishing activities are also controlled through a stringent licencing system, to prevent over-
fishing and the build-up of fleet over-capacity.  Fishi ng vessels must be registered in the Register of 
Norwegian Fishing Vessels:  the registration of new fishing vessels, as well as the acquisition of a fishing vessel already registered, requires a permit from the authorities.  At the end of 1999, only 8,752 of the 13,199 registered fish ing vessels were in operation.  There is still overcapacity in the 
Norwegian fishing fleet, and to meet this challe nge a number of input control systems have been 
established.  Norway has implemented two basic m odels to regulate the number of vessels that can 
join the different fisheries:  concessions, and an nual permits.  Fishing concessions and annual access 
permits are connected to both the owner of the vessel  and to the fishing vessel itself and are specific to 
species, fishing areas, fishing gear , and fishing vessels of a specific size.  In accordance with Act of 
26 March 1999 relating to the regulation of the pa rticipation in fisheries with annual access 
permits (Participation in fisheries Act), a total of 794 fishing concessions to 454 vessels, as well as 
3,431 annual access permits and 19 other permits  had been granted at the end of 1999. 
67. Norway has established a quota-transfer system – the unit quota system – with the purpose of 
reducing the number of vessels.  The unit quota system gives a vessel owner the possibility of buying another vessel, taking that vessel out of Norwegian fisheries, and fishing both quotas with the 
remaining vessel for 13 years.  The unit quota sy stem has so far been implemented only for the 
offshore fishing fleet.  Norway also uses decomm issioning schemes to reduce the fishing fleet.  The 
present scheme has two components:  decommissioning (the concession or access permit is withdrawn, and the vessel is permanently taken ou t of fishing and physically destroyed);  and WT/TPR/S/70 Trade Policy Review 
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combined decommissioning (the vessel is taken perm anently out of fishing, the concession or access 
permit is withdrawn, but a new concession or access permit may be granted on a replacement vessel). 
68. Whaling and sealing are also regulated by the 199 9 Participation in fisheries Act.  In 1999, 
only three vessels participated in the hunting of seal s, down from five in 1998; 34 vessels participated 
in the hunt for mink whales in both 1998 and 1999.  All participating vessels are required to have 
inspectors on board to ensure that their hun ting activities are performed in accordance with 
regulations. 
69. The sales organizations are responsible for controlling catches on all vessels landing 
in their area, irrespective of membership in th e organization or of nationality.  Under Act of 
24 June 1994 on the marketing of raw fish, a new syst em of registered fish buyers has been in force 
since 1 January 1998, replacing a system that gran ted fishermen's sales organisations the right to 
approve buyers in first-hand.  The Directorate of Fi sheries registers first-hand buyers.  According to 
the authorities, the purpose of the new system is to improve the supervision of the first-hand sales of 
fish and fishery products, by allowing comprehens ive monitoring of different groups of buyers. 
70. Nationality restrictions exist with respect to activities and ownership in the fishing sector.  
The Fishing Limit Act No. 19 of 17 June 1966, prohib its foreigners from fishing inside the Norwegian 
fishing limit.  A number of foreign vessels are, however, granted licences to fish in the Norwegian 
Economic Zone on the basis of bilateral agreemen ts.  Only Norwegian nationals or joint-stock 
companies having their registered office in Norw ay may obtain a concession to acquire registered 
Norwegian fishing vessels, or shares in a company that  owns such vessels.  Moreover, the majority of 
the members of the board of joint-stock fishi ng companies, including the chairman, must be 
Norwegian citizens residing in Norway; and at l east 60% of the equity capital of these companies 
must be owned by Norwegian nationals.  Also, the processing, packing or reloading of fish, 
crustaceans, and molluscs or parts and products of these, caught inside the fishing limits of the Norwegian Economic Zone, is restricted to Norwegia n nationals (or companies as specified above).  
Foreign vessels licenced for fishing in the Norwegian Economic Zone, are exempted from this 
restriction. 
71. Fishing activities are also subject to other management instruments, including minimum fish 
size, minimum mesh size, by-catch rules, discard bans, and limitations on the number of days at sea. A general policy goal is to increase the degree of pr ocessing.  In this respect, the share of catch used 
for the production of fish-meal and oil has been in creasing in the last few years, to some 54%;  the 
rest of the catch is destined for direct human consumption. 
72. Minimum import prices on certain fish products  may be established if there is market 
disturbance resulting from imports of large quantities of any fish at prices below Norwegian minimum 
prices. 
(c) Assistance to the fisheries sector 
73. The Government supports fisheries through a num ber of programmes, a lthough total financial 
transfers have been considerably reduced in recen t years.  As an estimate of the support received 
by the sector, in 1998, government financial tran sfers associated with Norway's marine fishery 
policies were NKr 193 million (US$24.7 million), th is represents some 1.9% of production value 
(Table IV.12).
8  Estimates for 1999 and 2000 are NKr 155 million, and NKr 160 million, including 
transfers to reduce fishing capacity.  Most support pa yments were made in the form of cost-reducing 
                                                      
8 This is not a comprehensive figure;  it does not include support to the aquaculture industry, or general 
services support. Norway WT/TPR/S/70 
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transfers, particularly reduction of transport costs,  and interest rate subsidies and investment support 
(see below).  Support programmes notified to the WT O in 1998 for fisheries, which cover mainly 
cost-reducing transfers,  totalled NKr 132 million.  Most support programmes are administered by the 
Ministry of Fisheries. 
Table IV.12 
Transfers associated with Norway's fishery policies, 1997 and 1998 
(NKr million) 
Type of transfer and purpose 1997 1998 
Marine fisheries 205.9 193.0 
(Percentage of production value) (2.3) (1.9) 
Direct Payments 20.9 49.0 
Decommissioning .. 25.0 
Income guarantee compensation 20 24.0 
Price support (for crab and coastal sprat fisheries) 0.9 0.0 
Cost-reducing transfers 185.0 144.0 
Reduction of transport costs 35.5 38.0 
Tax refunds and exemptions .. .. 
Other cost-reducing support 47.5 28.0 
Interest rate subsidies and investme nt support for vessel building 102.0 78.0 
.. Not available. 
Source: Information provided by the Norwegian authorities. 
74. The Transport Support programme of grants, is  aimed at facilitating the implementation of 
fisheries activities in specific regions.  Aid is granted in accordance with the yearly agreement 
between the Government and the Norwegian Fishermen’ s Association;  it is distributed by a group of 
sales associations to the fishing industry.9  The fish farming industry does not benefit from the 
scheme.  The total amount of subsidies under this  scheme in 1998 was NKr 33 million.  Also under 
the cost-reducing schemes, the programme of Support for Specific Fisheries, is aimed at helping 
specific fisheries to convert to more profitable operations.  The subsidy is paid to the sales 
organisation;  the amount available in 1998 was NKr 775,000 for crab fisheries, and 164,000 for 
coastal sprat fisheries due to transfers from previous  years.  No new subsidies were granted in 1998. 
75. The programme of Support to Fishing Vessels for Domestic Delivery :  Contract Subsidies 
and Construction Loan Subsidies grants contract su bsidies to ship owners calculated as a percentage 
of the contract price of a ship.  The scheme aims at correcting the distortions caused by subsidies in 
competitor countries.  In 1998, the subsidy rates we re 7.5% for new ships and 3.75% for extensive 
conversions.  The total amount of grants in 1998  was NKr 75.4 million.  Other cost-reducing support 
programmes include the programme of Support to Long-line Baiting Facilities, which  provides grants 
to members of organized long-line baiting facilities.   In 1998 the support was limited to NKr 11 per 
100 baited hooks, for a total of NKr 13 million.  Sup port to research in fisheries is granted through a 
programme of research grants, with a total budget in 1998 of NKr 5 million.  Under the Grant for 
Building or Purchase of Vessels to the County of  Finnmark programme, gran ts of up to 15% of 
building or purchase costs are provided to buyers or builders of fishing v essels less than ten years old in 
Finnmark.10  Although some NKr 10 million were available for the scheme in 1997 and 1998, no aid 
was paid during either year.  Through the Interest Rate Subsidies for Fishing Vessels for Domestic 
Deliveries :  Long Term Financing and Constr uction Loans, administered by the Ministry of Trade and 
Industry through SDN, and aimed at the modernizing the fishing fleet, ship owners benefited from an 
                                                      
9 The associations are:  Norway’s Raw Fish Orga nization;  the Fish Sales Association for Western 
Norway;  the Fish Sales Association for Rogaland County;  the Fish Sales Organization for the Skagerak Coast;  
and Norway’s Herring Sales Association. 
10 Under a Regulation of 21 December 1996. WT/TPR/S/70 Trade Policy Review 
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interest rate subsidy, and yards from a construction loan subsidy.  Although the scheme expired in 1989, 
ship owners still benefit until 2001.  The total am ount of interest rate subsidies in 1998 was 
NKr 5 million. 
(iii) Aquaculture 
76. In accordance with Act No. 68 of 14 June 1985 re lating to the breeding of fish, shellfish, etc, 
and Act No. 47 of 15 May 1992 concerning salmon and inland fish, etc., all farming of fish and 
shellfish requires a licence.  Sea farming of salmon and trout is also subject to a system of limited entry, which has resulted in a standstill in the number of nation-wide licences for salmon and trout since the mid 1980s.   
77. Approximately 95% of the farmed fish is e xported.  The production of salmon is mainly 
geared to the EU market, of which Norway has a 63 % market share.  Exports are subject to an export 
levy.  Some 460,000 tonnes (round weight) of salmon and sea trout were produced in 1999, with an 
export value of approximately NKr 12 billion.  Th e production of other species, like halibut, arctic 
char, cod, turbot and shell fish is much smalle r, some 2,000 tonnes.  Production licences are required 
for the aquaculture industry:  in 1999, there were 843 sea-farm licences for the production of salmon 
and trout, 315 smolt licences and 390 licences for other species. 
78. As a result of an anti-dumping and countervaili ng duty investigation, in 1997 an Agreement 
on Salmon with the EU was reached.  The agreem ent runs for five years, until 30 June 2002, 
and involves an arrangement on indicative ceili ngs on exports of salmon to the EU.  The 
agreement allowed an 11% increas e in Norwegian export volume in 1997 (based on actual exports of 
220,000 tonnes in 1996), and a 10% increase over the followi ng four years.  As part of the agreement, 
the export levy was increased from 0.75% to 3% fo r the funding of generic marketing of Atlantic 
salmon.  The agreement also resulted in the est ablishment of minimum import prices for Norwegian 
salmon to the EU.  The Ministry of Fisheries establi shed a system of feed quotas in 1996 to restrict 
production growth in the salmon industry in Norway.  The feed quotas on salmon are set in line with 
the salmon agreement and world-wide s upply and demand of Atlantic salmon. 
79. The Norwegian Seafood Export Council is responsible for the marketing of aquaculture 
products.  As a result of the salmon agreement be tween Norway and EU, which increased the export 
levy, funds for salmon marketing have increased subs tantially and, according to the authorities, the 
Norwegian Seafood Export Council has increased marketing efforts correspondingly.  
(5) M
INING  
80. The mining of metals has traditionally played an  important role in Norway, particularly the 
production of copper, silver, and iron ore.  Since the 1980s, this activity has been in decline because 
of a lack of economically viable deposits in Norway , which has led to the closing of several mines, 
while others have reduced their production.  Wh ile the production of metallic minerals has been 
declining, the extraction of industrial non-meta llic minerals, which are major inputs in other 
manufacturing industries (construction materials, paper,  plastic, and chemicals), has been on the rise.  
Similarly, the production of natural stone has shown a steep increase in recent years;  approximately 
5 million tonnes of aggregate are exported each year, mainly to other European countries.  
81. Exports of minerals reached some NKr 3.5 b illion in 1998, compared to imports totalling 
NKr 2.3 billion.  Imports of metal ore are duty free.  Duties on other mining products are very low, 
ranging between zero and 0.7%, and average 0.1%. Norway WT/TPR/S/70 
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82. Nationality restrictions exist for exploration rights:  they appl y to individuals and enterprises 
not resident in any of the EEA countries.  Extraction of minerals requires a concession. 
(6) HYDROCARBONS  
(i) Features 
83. The petroleum and natural gas sector is the si ngle most important activity for the Norwegian 
economy.  Petroleum production and pipeline tr ansport accounted for 11.0% of GDP in 1998 
(Table IV.13).  Due to its capital intensity, and despite its large contribution to GDP, the direct 
employment effect of production and pipeline transport of crude oil and natural gas is relatively small, 
accounting for less that 1% of total employment in 1998, while the share of petroleum-related 
activities was roughly 4%. 
Table IV.13 
Petroleum operations, 1994-99 
 1994 1995 1996 1997 1998 1999 
 NKr billion 
Value added 112 119 163 173 122 173 
Export value  109 116 160 168 123 167 
Investments accrued 54 48 48 62 79 67 
Employment (thousands) 18 18 17 17 17 17 
 Per cent 
Share of GDP 13 13 16 16 11 14 
Share of export value  33 33 39 37 30 36 
Share of total employment 1 1 1 1 1 1 
Source: Statistics Norway. 
84. Norway is the largest exporter of crude oil outside of OPEC, ranking second in the world after 
South Arabia.  The market for Norwegian crude o il is concentrated on the North Atlantic basin, 
mainly due to strong demand there and lower transpor tation costs than to other parts of the world.  
Norway’s gas exports totalled 43.6 billion scm in 19 98, or 2% of world gas production;  it supplies 
some 10% of western Europe's gas consumption.  The Government expects Norwegian gas producers 
to deliver 70 billion scm of natural gas by 2005, some 50% more than in 1998. 
85. Property rights to Norway's oil and gas resource s are vested in the State.  Exploration and 
production licences are issued under the terms stipulat ed in the Petroleum Act.  Policy issues and 
management of the sector are mainly under the responsibility of the Ministry of Petroleum and Energy.  Some changes have been in troduced since Norway's last Revi ew in 1996, with respect to the 
system of forming groups of licensees. 
86. Petroleum activities on the Norwegian shelf are undertaken by commercial companies.  The 
three main Norwegian companies are Statoil, which is  wholly state owned, Norsk Hydro, in which the 
state maintains a large, non-majority stake, and Sa ga, recently purchased by Norsk Hydro.  Although 
Statoil is 100% state owned, it operates as a commerc ial company and is treated accordingly.  Statoil 
controls some 15% of production of hydrocarbons;  the rest is largely accounted for by the State 
Direct Financial Interest (SDFI), Norsk Hydro, an d by foreign firms.  The share of foreign firms 
varies according to the field:  in some cases it ma y reach 100%.  Most of the major foreign petroleum 
companies are involved in oil exploration in Norway.  Statoil participate in explorations in a large 
number of fields;  its maximum participation in any specific field is 40%, while that of SDFI is 73%, 
and Norsk Hydro's is 50%. 
87. The authorities noted that the management of gas resources is of utmost importance for the 
efficiency of the Norwegian oil and gas sector.  Th e primary goal of petroleum policy is to optimize WT/TPR/S/70 Trade Policy Review 
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the use of resources at the lowest  possible cost, taking due account of  environmental concerns.  The 
fundamental elements to achieve this goal are an appr opriate level of production;  a high recovery rate 
of both oil and gas;  the utilization of economies of  scale;  and achieving the highest environmental 
standards.  The State is thus involved in contract allocation and sales of natural gas.  Gas exports are 
marketed by the Gas Negotiations Committee (GFU),  which is responsible for Norwegian gas sales 
since 1986.  The members of GFU are Statoil (which holds the chair) and Norsk Hydro, which together hold production licences for so me  65% of Norway's gas reserves.   There are no production 
quotas for natural gas, imports may enter Norway free of duty
.11 
88. At the end of 1999, petroleum reserves on the No rwegian continental shelf totalled 1.5 billion 
standard cubic meters of oil equi valent (scm oe), gas reserves were  1.2 billion scm oe, and reserves of 
natural gas liquid (NGL) reached 200 million scm oe.12 
89. Norway accounted for some 3% of world oil production in 1998.  Offshore petroleum 
production in 1998 totalled 222 .5 million scm oe, including 168.9 million scm oe of oil (2.9 million 
barrels per day), 43.6 million scm oe of gas and 10 million scm oe of NGL/condensate.  Oil 
production declined by 4% compared with 1997, while gas sales rose by 2%.  In 1999, Norway 
decided to curtail production by 200,000 barrels pe r day, and in December 1999 decided to extend 
this reduction until the end of the first quarter of  2000.  The authorities are projecting that total 
production will rise by about 12% in 2000 over 1999. 
90. Investment in exploration, field developmen t and pipeline transport totalled  NKr 79 billion 
in 1998, up from NKr 63 billion in 1997, while the investment associ ated with the SDFI amounted to 
NKr 27.3 billion in 1998, compared with NKr 20.3 billion in 1997.  Petroleum-related investment 
reached 26% of total investment in 1998.  Investment  declined in 1999, and is expected to continue 
declining, in 2000.13  Investment decisions were influenced by low oil prices in late 1997 and 1998;  
the current recovery in prices may induce a revision in investment. 
91. The State Petroleum Fund (SPF), was established in 1990.  The purpose of the SPF is to 
establish a buffer to allow for greater room for manoeuvre for economic policy.  The SPF had assets 
for NKr 222 billion or about 19% of GDP in 1999 .  Apart from its contribution to the SPF, the 
petroleum sector contributes significantly  to public finances (Chapter I(2)(v)). 
(ii) Policy framework 
92. The policy framework for petroleum operations is determined by Parliament, which has to 
approve all issues dealing with policy and law chang es, as well as all major development.  Parliament 
has delegated authority to the Government to approve smaller development projects.  Overall 
administrative responsibility for petroleum operations  on the Norwegian continental shelf rests with 
the Ministry of Petroleum and Energy (MPE), which must conduct these functions in accordance with 
the general policy framework determined by Parliament. 
93. The petroleum industry has spillover effects in other industries, since it generates a strong 
demand for goods and services related to explora tion, drilling, development, and petroleum 
production.  An important policy element in the past was to build up a domestic off-shore supplies 
sector to accompany the development of the petroleu m industry.  This seems to have been achieved, 
since, according to the authorities, in recent y ears, Norwegian companies have accounted for well 
                                                      
11 OECD (1999c). 
12 One standard cubic meter of oil equivalent (scm oe) is equal to 6.29 barrels of oil. 
13 Ministry of Petroleum and Energy 2000;  and in formation provided by the Norwegian authorities. Norway WT/TPR/S/70 
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over half the overall deliveries to the country’s opera tions in this sector.  The next policy step is to 
enhance the international competitiveness of Norwegia n suppliers of capital equi pment.  To this end, 
the MPE has established the Intsok foundation, whic h aims to achieve its competitiveness target 
through a network of voluntary collaboration betwee n its members.  There were 55 members in 1999, 
which included oil companies and suppliers. 
94. A stated policy goal of the authorities is to en courage the discovery of additional oil resources 
in order to counter an anticipated decline in o il production.  Exploration and development in the 
frontier regions are being encouraged through a policy  of joint application for blocks in the Barents 
Sea in 1997 and North Sea in 1999, allowed by the 1996 Petroleum Act.  
95. Policy in the sector also seems to be aimed at reducing the State's direct involvement, through 
the setting up of consortia for field development.  Another sign in this direction is that, from the 
fifteenth licensing round in 1996, Statoil and the SDFI have no longer been awarded an automatic share of every licence, a departure from the previous policy, which resulted in allocations to the SDFI 
of some 50% of every consortium. 
96. The Government is considering several options for the future of Statoil.  In this respect, in 
August 1999 the executive board of Statoil submitted to the Ministry of Petroleum and Energy its 
views on the future ownership structure of Statoil and the SDFI.  The report recommends the transfer 
of the majority of the SDFI's assets to Statoil, a nd that Statoil be partly privatized and listed on the 
Oslo stock exchange.  Another op tion being considered would be to setup an entirely new, state-
owned oil company, reporting directly to the Mini stry of Petroleum and Energy, which would handle 
state interests in the North Sea. 
(iii) Institutional and legal framework 
97. The Ministry of Petroleum and Energy (MPE)  has the overall responsibility for resource 
management for monitoring petroleum, and also provides the secretariat for the Petroleum Price 
Board, which sets the norm price for taxation purposes.   The MPE is also responsible for handling the 
State's participation in the oil industry, namely fo r exercising the owner’s role in relation to Statoil 
and for supervising the State's Direct Financial Interest (SDFI) in the petroleum sector. 
98. The SDFI was established in 1985, when it was decided to split the cash flow from Statoil's 
licence interests into two components, one remaining with the company and another going directly to 
the state (the SDFI).  The SDFI is managed by Stat oil, which also sells all petroleum accruing to the 
SDFI on behalf of the state.  Under the SDFI, a st ate interest was incorporated into most licences 
issued after 1985;  as a result, the State pays a share of all exploration,  development and operation 
costs in activities corresponding to its direct intere st;  consequently, it receives a corresponding share 
of production and other revenues on the same te rms as other licensees.  The SDFI accounted for 
roughly 40% of all capital spending on the continental shelf in 1998.  The SDFI secured an interest in 
all new licences awarded from licensing rounds from 1985 (see below).  As owner of the petroleum 
resources, the State is free to determine its leve l of direct participation through the SDFI in any 
licence.  The average level of SDFI involvement has gradually been reduced over the recent years. 
99. Since the last Review of Norway, the Petroleum Act No. 11 of 22 March 1985 has 
been repealed and replaced by Act No. 72 of 29 N ovember 1996 (the Petroleum Act), in force since 
1 July 1997.  Regulations under the Act were issu ed by Royal Decree of 27 June 1997.  The Act 
provides the overall legal basis for the licensing system that regulates petroleum operations in 
Norway.  The legal authority to ta x these operations is granted by Act No. 35 of 13 June 1975 relating 
to taxation of sub-sea petroleum depos its (the Petroleum Taxation Act).  WT/TPR/S/70 Trade Policy Review 
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100. The Norwegian authorities noted that the new Petroleum Act has retained the fundamental 
principles of the 1985 Act, and makes no amendments to the main features of the licensing system, although some administrative cha nges have resulted from it.  The main changes include the possibility 
of extending the initial period of validity of producti on licences from six to ten years, with possible 
extensions to 30 or 50 years.  The 1996 Act allows  exploration and production licences to be granted 
to physical persons domiciled in EEA member states.  The new Act liberalized the procurement obligations of licensees.  The 1996 Petroleum Act reflects the requirements of the European Union 
Directive 94/22/EC on granting and using licences to explore for and produce hydrocarbons, which 
was incorporated in Appendix IV (Energy) to the EEA Agreement in 1995. 
101. The Petroleum Act specifies that the proprieta ry right to sub-sea petroleum deposits on the 
Norwegian continental shelf is vested in the st ate.  Currently, some 20 oil companies carry out 
operations on the Norwegian continental shelf.  All commercial activities on the Shelf must be 
preceded by the formal opening of the area in qu estion for reconnaissance, exploration, development 
and production.  Such opening takes place after the authorities have ensured that the environmental, 
economic, and social impact of these activities have been properly assessed.  Non-exclusive 
reconnaissance licences are required to make geologi cal, petro-physical, geo-physical, geo-chemical 
and geo-technical surveys.  Production licences are required for regular exploration, drilling, and 
production.  Production licences give oil companies th e exclusive right to explore for, develop, and 
produce petroleum found in the specified area.  Th e licensees become the owners of any petroleum 
produced.  Before development, licensees are require d to carry out a thorough environmental impact 
assessment of the area. 
102. Production licences are normally awarded th rough licensing rounds, during which the 
Government invites applications for a certain number of blocks.  Although, according to the 
Petroleum Act, companies are generally required to apply individually, in some parts of the shelf 
companies are allowed to submit joint applicati ons.  In all rounds that took place between 1973 and 
1993, state participation through the SDFI and Stato il was about 50%, but has declined subsequently.  
In the 16
th licensing round, which took place in the spri ng of 2000, the average SDFI share was 15%. 
103. Norwegian natural dry gas is almost exclusiv ely sold under long-term contracts resulting from 
commercial negotiations.  However, licensees are,  free to reach sales agreements on their own, 
provided better prices are obtained, or to use th e gas in their own facilities.  The Government 
nevertheless remains responsible for the designation of contracts, the delivery of fields for all 
agreements, and the approval of all commercial deals.  A Gas Supply Committee (FU), established 
in 1993, advises the Ministry of Petroleum and Ener gy on issues relating to the development and use 
of fields and transport systems.  The EU's Gas Dire ctive is not yet a part of the EEA;  Norway and the 
EU are currently holding discussions in this respect. 
104. Government support to the R&D activities related to the petroleum sector is provided through 
funds for research granted by the Research Counc il of Norway and the Ministry of Petroleum and 
Energy.  In 1999, it was agreed to allocate  NKr 100 million to petroleum research, through the 
Offshore 2010 Research and Development Programme.14  The main goal of this programme is to give 
emphasis to innovation and commercialization of R&D in small and medium-sized companies.15 
105. Petroleum operations are taxed at the ordinary  corporation rate of 28%, both in-land and 
offshore.  A net profit tax of 50% is also levi ed on petroleum activities.  Companies may deduct 
investment and net financial costs from offshore operations.  The most important taxes levied on 
petroleum operations are the royalty on oil production, the area fee, and the carbon dioxide tax.  
                                                      
14 OECD (1999a). 
15 Ministry of Petroleum and Energy (2000). Norway WT/TPR/S/70 
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Royalties are paid on oil production from fields a pproved for development before 1 January 1986;  
rates vary between 8% and 16% of gross production.  Gas production is not subject to the payment of 
royalties. Due to the decline in earnings from oil activities, government revenues from taxes and 
royalties on petroleum operations and the SDFI accounted for 10% of total government revenues 
in 1998, compared with 18% in 1997. 
(iv) Activities related to the petroleum sector 
106. Norway has three refineries:  Statoil's Mongsta d, near Bergen, with an annual capacity of 
8 million tonnes;  Esso’s refinery at Slagen, near Oslo, with a capacity of 4.5 million tonnes;  and 
Shell's refinery at Sola (outside Stavanger), with  a capacity of 2.5 million tonnes but to be closed 
in 2000. 
107. A number of industries producing petroleum products  have developed;  th e main products are 
heating fuels (industrial and household), petr ochemicals, and motor fuels (Table IV.14). 
Table IV.14 
Production of petroleum products, 1994-98 
(000' tonnes) 
Product  1994 1995  1996  1997  1998 
Petrol  3,170  2,872  3,216  3,418 3,233 
Naphtha and other gasolines  978  791  694  586  778 
Kerosene  1,170  1,059  1,253  1,127 877 
Medium distillates  6,828  6,187  6,870  7,124  6,921 
Heavy fuel oil  1,690  1,727  1,780 1,876 1,997 
Total  13,836  12,636  13,813  14,131  13,806  
Source : Statistics Norway. 
108. The main market for Norwegian refined petroleu m products is western Europe.  The principal 
destinations in 1998 were Denmark, the Netherla nds, Norway, the United States, Belgium, Germany, 
the United Kingdom, and Sweden.  Statoil is the la rgest producer of petroleum products in Norway, 
with some 29.9% of total production in 1998;  other important producers are Shell, 24%;  Esso, 
23.4%;  Hydro/Texaco, 11.7%;  and Fina, 6.9%. 
(7) MANUFACTURING  
(i) Features 
109. Manufacturing activities represented 10.4% of GDP in 1999, a little less than petroleum 
activities.  In contrast to agriculture, market acc ess to imported industrial products is subject to 
relatively low tariffs.  The average tariff rate fo r manufactures in 1999 was 2.6%, considerably lower 
than the average tariff at the time of the previous  Review of Norway, which was 5.7%.  The highest 
protection is in textiles.  Tariff rates applied to pl astics, soap, and toiletries are also above average.  
Imports of a wide range of products, in some cases entire HS chapters, are duty free; these include 
chemicals, pharmaceutical products, fertilizers, wood and wood products.16 
(ii) Policy framework 
110. The guidelines for industrial policy  are contained in Report No. 41 to Parliament (1997-98) 
"Industrial policy into the 21st century".  The main objective of i ndustrial policy is to generate higher 
                                                      
16 Imports under HS chapters 25-31, 37, 41, 44-47, 49, 66, 68, 72, 75, 78, 86, 88, and 97, are entirely 
duty free. WT/TPR/S/70 Trade Policy Review 
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value added in order to enhance welfare and empl oyment.  Current Norwegian industrial policy is 
mainly sector-generic;  only in a few cases is it dir ected towards individual companies and industries.  
Support to the manufacturing industry constitutes appr oximately a quarter of total support to business 
and industry, and is directed to wards small and medium-sized co mpanies, regional objectives, and 
research.  According to the authorities, support is  intended to ease readjustment processes, and to 
assist companies in becoming competitive by stim ulating innovation and deve lopment through partial 
compensation for extra costs and risk s associated with such activities. 
111. Industrial policy formulation falls mainly within  the responsibilities of the Ministry of Trade 
and Industry, but other ministries are also involve d, depending on the industrial sector.  Industrial 
policy issues are discussed in the National Forum for Industrial Development, in which unions, 
employers' associations, financial institutions and research and educational institutions participate.  
Another element of industrial policy is the financ ing of research projects.  The Norwegian Research 
Council is the most important official body in this area.  The Research Council administers and finances research activities in business and industry, institutes and universities. An advisory system, 
consisting of five different advisory bodies, pl ays a major role in disseminating knowledge among 
users in business and industry (Chapter II(4)). 
112. Another important element of Norway's industria l policy is the provision of credit to small 
and medium-sized enterprises, mainly through th e Norwegian Industrial a nd Regional Development 
Fund, established in 1993 to strengthen the availa bility of capital to business and industry.  The 
Norwegian authorities consider that this type of inte rvention is desirable because, in their view, it is 
easier for the State to take long-term factors into  consideration than for an individual company.
17 
(iii) Main manufacturing activities 
(a) Machinery and equipment 
113. Machinery and equipment is the single most important area in manufacturing, accounting for 
some 3.2% of GDP.  Imports of non-electrical machinery and equipment totalled US$6.3 billion 
in 1998;  imports of electrical machinery were US $3.6 billion in the same year.  The goods produced 
in Norway include:  engines and turbines, motors for ships and boats, agricultural machines, and a 
number of electrical machines.  The sector is closely linked to the petroleum industry and to shipbuilding, on which a large part of produc tion depends.  The production of communications 
equipment and systems has also been developing rapidly. 
(b) Shipbuilding and repairs 
114. Shipbuilding activities accounted for 1.2% of GDP in 1998 and 1999.  There are some 
60 building or repair yards, of which around half build ships larger than 100 gross tonnes.  
Approximately 50% of the output from Norwegian sh ipyards is exported.  Despite exports exceeding 
US$1 billion in 1998, Norway runs a large trade defi cit in ships, mainly due to the need to import 
larger ships for the petroleum and maritime transpor t industries.  The trade deficit in shipbuilding 
occurs despite important government support to the i ndustry.  In 1999, particularly as a consequence 
of increased output amidst poor export performan ce, support granted to shipyards increased 
substantially. 
115. The shipbuilding industry consists of a few larg e and several medium-sized companies, which 
produce mainly small and medium-sized ships, such  as product and chemical carriers, general cargo 
ships, ro-ro vessels, ferries, passenge r ships, fishing vessels and seismic vessels.  Norway is also an 
important producer of ships' equipment, particularly pumps. 
                                                     
 
17 Ministry of Trade and Industry (1996). Norway WT/TPR/S/70 
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116. The authorities noted that shipbuilding has been covered by the EEA Agreement since 
1 May 1995, and that s ubsidy schemes applied by Norway ar e in accordance with EC Council 
Regulation 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding.  Under this 
scheme, contract-related operating aid is calculated as a percentage of the contract price of a ship, the 
subsidy rates are 9% for new ships with a contract  value of more than ECU 10 million, and 4.5% for 
new ships of a value of less than ECU 10 million and for conversions.  Assistance is through the 
Contract and Construction Loan Subsidi es to the Shipbuilding Industry Scheme 
(Chapter III(4)(iv)(e)).  Outlays under this scheme are estimated to have increased substantially 
in 1999, but the authorities expect support levels to be lower in 2000.  Although the Interest Rate 
Subsidies for the Shipbuilding Industry:  Long Term Financing and Construction Loans Programme 
was terminated in 1989, repayments under the scheme will continue until 2001, since loans were 
granted for up to 12 years.  In 1998, interest rate subsidies under the scheme were estimated at 
NKr 17.6 million.  
(c) Metals and metal products 
117. The main products are iron and steel, ferro-allo ys and aluminium.  Imports of these products 
are mostly duty free;  the highest tariffs are applie d to imports of aluminium products, which faced an 
average rate of 1.9% in 1999, and articles of metal,  which faced an average tariff of 2.4%.  Exports of 
metals account for 22% of total exports in the ma nufacturing industry.  Imports of metals and metal 
products totalled some US$4.4 billion in 1998. 
118. Norway is the world's largest producer of  ferro-silicon and silic on-containing alloys, 
and has 15 producers of ferro-alloys.18  Norway is the world's seventh largest producer of aluminium 
and exports between 80% and 90%  of production.  There are three producers of aluminium:  
Hydro Aluminium, Soral, and Elkem.  Norway also produces semi-manufactures of aluminium, which are used as inputs in the manufacture of transport eq uipment in the building and packaging industries, 
and for the production of electricity cables.   
(d) Textiles and clothing 
119. The textile and clothing industry consists of  a large number of small and medium-sized 
companies.  Some 81% of employees in the sector work in companies with less than 100 workers.  
The most important products are furnishing fabrics,  such as upholstery materials, carpets, duvets and 
bed linen, as well as technical textiles, fireproof mate rials, fishing tackle, and wool for knitting and 
weaving.  There is also production of sanitary textil es, sleeping bags, tents a nd sails.  Exports account 
for 38% of production.  Imports of textiles and clot hing totalled US$2.14 billion in 1998;  they faced 
an average MFN tariff of 8.7% in 1999 and a ta riff range between zero and 19%.  Apparel, knitted 
fabrics and carpets are subject to the highest rates, while imports of silk, cotton, and other fabrics, as 
well as footwear enter at lower tariff rates.  Im ports from EEA countries, and states with which EFTA 
has bilateral agreements, enter duty-free.  Some  80% of imports are from other OECD countries 
(mainly EEA members). 
120. The main products of the clothing industry are uniforms, working and leisure clothes;  the 
primary purchaser in the domestic market is the public sector.  The export share in the industry 
is 20%.  The production of clothing is highly specialized and Norwegian companies normally subcontract part of their production.  The increas e in subcontracting practices has gone hand-in-hand 
with the reduction in restrictions on imports of te xtiles and clothing.  In this respect, Norway has 
eliminated, in advance, quotas under the Agreement on Textiles and Clothing (ATC).  Norway made a 
notification to the WTO on 19 September 1997 anno uncing the elimination of quotas on a number of 
                                                     
 
18 Ministry of Foreign Affairs (1999). WT/TPR/S/70 Trade Policy Review 
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products:  32 quotas were eliminated from the end of 1997, five other quotas were eliminated in 1998.  
Currently, the only quantitative restriction in place a ffects the importation of fishing nets;  all other 
quotas have been eliminated (Chapter III(2)(v)(b)). 
(e) Pharmaceuticals  
121. Imports of pharmaceuticals enter Norway duty free.  The export and import of pharmaceutical 
products requires approval by the Norwegian Board of Health;  the wholesale businesses must follow 
the EU rules, harmonized through the EEA Agreemen t.  Parallel imports are in principle allowed 
since the entry into force of the EEA Agreement.  According to the authorities, parallel imports are 
significant enough to have some impact on the pharmaceutical market in Norway.  
122. Maximum prices of prescriptive pharmaceuti cal products are fixed by the Norwegian 
Medicines Control Authority at the time of registratio n of new preparations.  A reference price system 
is used for generics, which stipulates that the least expensive preparation must be chosen for 
maximum reimbursement when equivalent options exist for prescription drugs.  The number of preparations with similar properties may be lim ited as a result of a needs test.  Imports of 
pharmaceutical products containing GHOs are forbidden.  
(8) S
ERVICES  
(i) Introduction 
123. Services play a major role in the Norwegian economy.  In 1998, services other than those 
provided by the Government accounted for 41% of GDP;  including public-sector services this share 
increases to some 57% (Table IV.1).19  The services sector represented some 74.2% of civilian 
employment in 1998.20  State participation, including social, health, and education services, is 
significant, as witnessed by the share of government  services in total services output and employment 
(24.5% and 41%, respectively, in 1998). 
124. The main service activities in terms of value added are wholesale and retail trade, 
transportation, business services, and financial services .  In terms of employment, wholesale and retail 
trade is the most important area, accounting for abou t a third of total employment in services, and for 
some 15% of total employment, followed by business and other related services.  Employment in post 
and telecommunications services remained roughly stable in the second half of the 1990s, while 
employment in financial services contracted. 
(ii) GATS commitments 
125. Sector-specific commitments under the Genera l Agreement on Trade in Services (GATS), 
were taken in all the broad categories of services except  for health-related and social services.  A wide 
variety of subsectors are covered in business ser vices, telecommunications, construction and related 
engineering services, financial services, tourism and related services, among others (Table AIV.2).  In 
general, Norway's schedule of commitments places few market access or national treatment limitations on cross-border supply, consumption ab road and commercial presence.  As regards the 
presence of natural persons, market access and nati onal treatment remain unbound, in line with the 
prevailing scheduling practice of most WTO Me mbers, except as provided in the horizontal 
commitments for mainly intracorporate transferees,  and for a few specified service suppliers (see the 
Third Protocol to the GATS). 
                                                     
 
19 Statistics Norway, http://www.ssb.no/en/knr/ta b-1999-12-02-17-en.txt [31 January 2000]. 
20 Statistic Norway, http://www.ssb.no/en/knr/ta b-1999-12-02-42-en.txt; and Statistics Norway 
(2000a). Norway WT/TPR/S/70 
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126. Norway's horizontal  limitations under the GAT S  relate to provisions on the establishment 
and general authorization procedures for acquisitions , such as:  the requirement of a concession to 
acquire real estate, or to enter into certain lease c ontracts, for corporations where more than one third 
of the voting rights are controlled by non-nationals or foreign controlled companies, or where the 
chairman and the majority of the board members are not Norwegian.  In the case of individuals, 
foreign citizens residing in Norway are allowed to purchase or lease real estate without a concession, 
provided the property is acquired for their own personal use.  
127. National treatment is accorded only to subs idiaries of companies that are formed in 
accordance with the law of an EEA member stat e and have their registered office, central 
administration or principal place of business within an EEA member state;  Norwegian commitments 
do not extend this treatment to branches or ag encies established in an EEA member state by a 
third-country company.  Moreover, treatment le ss favourable than that accorded to national 
enterprises may be given to subsidiaries of third- country companies formed in accordance with the 
law of an EEA member state but having only thei r registered office in the territory of an EEA 
Member State, unless they show that they possess an  effective and continuous link with the economy 
of one of the EEA member states.  Other limitations  to establishment include the requirement that the 
managing director in a joint stock company, and at least half of the founders, members of the board of 
directors, corporate assembly and committee of re presentatives must be permanent residents of 
Norway and have resided there for the last two year s.  National treatment limitations also apply for 
the granting of subsidies, for which eligibility ma y be limited to juridical persons established in 
Norway, and to natural persons who are Norwegian citizens.  
128. Norway's list of GATS Article II MFN exemptions covers road transport services, air 
transport services and audio-visual services (Table AIV.3).  Some measures, aimed at promoting 
Nordic cooperation, cover all sectors.  
(iii) Financial services 
129. Value added financial services accounted for some 3.6% of GDP in 1999;  the subsector 
employed some 2.3% of the occupied work force in the same year.  There were some 609 financial 
institutions in Norway at the end of 1999;  asset s totalled some NKr 2.73 trillion (US$340 billion), 
mostly held by banks, but increasingly by pensi on schemes, mutual funds, and insurance companies 
(Table IV.15).  Norwegian financial markets are dominated by eight conglomerates, which account 
for about 75% of the market.21 
130. Norwegian financial services have undergone a pr ocess of deregulation since the beginning of 
1980s, which has been intensified since the last Trade Policy Revi ew in 1996.  This process has 
increased to a certain extent the sector's degree of  openness to foreign investment (see below).  
Foreign participation has increased over the last few years, but remains limited, and government policy seems to be aimed at keeping Norwegian owne rship in banking activities.  Norway participated 
and presented an offer in the extended  Nego tiations on Financial Services under the GATS.
22  Market 
access was granted to all activities covered by the Understanding on Commitments in Financial 
Services (for cross-border supply including reinsura nce, and insurance risks related to maritime 
transport, commercial aviation and others).23  The offer included market access for branches of 
                                                      
21 Kredittilsynet (1997). 
22 Norway's commitments in the negotiations are contained in WTO document GATS/SC/66/Suppl.4,  
26 February 1998. 
23 In the 1995 Schedule, intermediation through an authorized broker of non-life insurance to an insurer 
established in a non-EEA state and not authorized to operate in Norway as a company or a branch, was limited to 
marine and transport insurance, insurance related to o ffshore exploration activities and to insurance contracts 
regarding domestic companies with an activity of at leas t 10 man years or annual sales of at least NKr 50 million.  WT/TPR/S/70 Trade Policy Review 
Page 102 
 
 
foreign financial institutions.  Limitations to  national treatment were lifted for nationality 
requirements for members of the co mmittee of representatives in financial institutions (Table AIV.4).  
Table IV.15 
Structure of the financial sector, 1997-99 
Number of enterprises  Total assets                 
(NKr billion)  Loans to the public            
(NKr billion)   
1997 1998 1999 1997 1998 1999 1997 1998 1999 
Total  648 644 609 2,149  2,383  2,733  1,048  1,118  1,224  
Deposit money banks  166 166 165 1,368 1,516 1,765 726 790 851 
Central Bank of Norway  1 1 1 319 365 504 1 1 1 
Commercial banks incl. the Postal Banka 32 32 35 687 748 772 422 453 458 
Savings banks  133 133 131 362 403 489 303 376 393 
State lending institutions  6 6 6 198 206 206 172 180 190 
Mortgage companies  8 9 10 105 138 148 72 95 93 
Finance companies  49 46 48 42 50 65 37 46 59 
Insurance companies, etc.  408 406 366 438 473 549 41 37 31 
Life insurance companies   10 10 9 284 310 361 32 29 25 
Non-life insurance companies  123 123 109 78 81 97 4 3 1 
Pension schemes  269 268 242 75 80 85 8 5 5 
Unit-link 6 6 6 1 2 6 0 0 0 
Financial holding companies  11 11 14 17 17 .. 0 0 .. 
.. Not available. 
a Includes foreign branches of Norwegian banks. 
Source: Information provided by the Norwegian authorities. 
131. The Banking, Insurance and Securities Commiss ion (Kredittilsynet) is responsible for the 
supervision of banking, finance and insurance institutions, including compliance with capital 
adequacy and prudential requirement s.  The Commission is also responsible for the supervision of 
estate agencies and debt collection agencies, investment firms and management companies for 
collective investment funds, and of auditors and accountants. 
(a) Banking  
General features 
132. There are currently 22 commercial banks operating in  Norway (after the merger of the Postal 
Bank with Den Norske Bank), of  which two are foreign-owned banks and seven are Norwegian 
branches of foreign banks.  This represents an in crease in the number of foreign banks operating in 
Norway since Norway's last Review, when three foreign banks were reported as operational.  There 
are also 130 savings banks.  Commercial and savings  banks combined owned some two thirds of the 
assets of the financial system in 1999.  Five trad itional state lending institutions operated in Norway 
until late 1999; accounting for some 20% of total outstanding loans in 1998.  From 2000, there are 
only three state-owned banks:  the Housing Bank, the Educational Loan Fund, and the Industrial and 
Regional Development Fund.  The Municipalities Bank, one of the largest state banks, was 
transformed into a joint-stock company in 1999.  The Bank for Agriculture was incorporated into 
the Industrial and Regional Development Fund, wh ich provides credits at concessional rates, as 
from 2000.  The state banks are financed through loans from the State. 
133. The key elements of the Government's ownershi p policy in the banking sector are to maintain 
long-term Norwegian ownership in the main financia l institutions operating in Norway, and to ensure 
sufficient Norwegian ownership in the two largest Norwegian commercial banks by retaining a stake 
of one third of the shares.  A related policy objectiv e is to keep the headquarters and main strategic 
functions in Norway. Norway WT/TPR/S/70 
 Page 103 
 
 
134. Through the Government Bank Investment F und and the Government Bank Insurance Fund, 
the State retains a stake in Den norske Bank (DnB) and Christiania Bank og Kreditkasse (CBK), the major commercial banks.  State participation in th e banking sector increased at the beginning of the 
1990s as the result of government intervention to rescue troubled banks after heavy losses required 
substantial injections of capital through the Go vernment Bank Insurance Fund (GBIF).  The 
Government thus became the major shareholde r in CBK, DnB and Fokus Bank.  In 1995, the 
Government Bank Insurance Fund sold 95.9% of th e shares of Fokus Bank, which was acquired by 
Den Danske Bank in 1999.  At the end of 1998,  the Government Bank Investment Funds and the 
Government Bank Insurance Fund together held 51% of  the shares of CBK and 52.2% of the shares of 
DnB.  In 1999, the Government reduced its stake in  CBK/Kreditkassen to 34.7% by a public offering.  
In October 1999, the merger between DnB and the Postal Bank, resulted in state ownership in DnB 
increasing to 60.6%.  Other steps taken to reduce the state's involvement in the banking sector include the transformation of  Kommunalbanken into a limite d company, and the sale of the 20% of its shares 
to the pension fund of local government employ ees.  The state ownership in DnB and CBK was 
discussed in a Government report to Parliament (Report No. 11 1999-2000).  The authorities have 
noted that, in its comments on this report, the Parliament's Standing Committee on Financial and 
Economic Affairs recommends the Government to co mbine its interests as owner into one entity, and 
to maintain national ownership by owning at l east one third of the shares of this entity. 
135. In 1999, commercial banks' ordinary operating profit before taxes corresponded to 1.17% of 
average total assets, up from 0.67% in 1998.  Profit s in savings banks were 1.59% of average total 
assets in 1999, up from 1.24% in 199 8.  Banks' lending growth  continued to be sw ift in 1999, but less 
so than in previous years, and capital adequacy ratios stabilized.  Although lower than in 1995, and 
1996, these ratios were well above the BIS minimum in 1999, at 11.8% for commercial banks, 11.5% 
for life insurance companies, and 13.2% for savings banks. 
Institutional and legal framework 
136. The Central Bank of Norway (Norges Bank) is a separate legal entity owned by the state;  its 
activities are regulated by the Norges Bank Act, of 24 May 1985.
24  The Central Bank's Supervisory 
Council, comprising fifteen members appointed by Parliament, ensures that the rules governing the 
Bank's activities are observed.  In addition to issu ing regulations and monitoring activities regarding 
financial institutions and markets, the Central Ba nk is responsible for the Government Petroleum 
Fund and for monetary, credit, and fo reign exchange policy (Chapter I). 
137. The Ministry of Finance is in charge of granting licences to engage in banking activities, and 
issuing regulations pursuant to the main Acts dea ling with financial services.  The Banking, Insurance 
and Securities Commission (Kredittilsysnet) is res ponsible for the supervision of banks, finance 
companies, mortgage companies, and insurance companies, as well as activities such as securities 
trading, real estate agencies, and accounting and auditing undertakings.  The Commission also 
supervises two guarantee funds, one for commercial ba nks and the other for savings banks;  banks pay 
premiums to the guarantee funds based on a combin ation of total deposits.  Kredittilsysnet reports 
administratively to the Ministry of Finance, is author ized to issue rules and regulations in a number of 
areas, and prepares draft statutes and regulations for the Ministry of Finance.  Capital adequacy rules follow the Bank of International Settlements guidelines. 
138. Under the EEA Agreement, Norway's banking sy stem is a part of the single market for 
banking services.  EEA banks and ot her providers of services may not be discriminated against on 
grounds of nationality.  Establishment licences grante d in any member state are valid in the others.  
                                                     
 
24 Act No. 28 of 24 May 1985 relating to Norges Bank and the Monetary System. WT/TPR/S/70 Trade Policy Review 
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As a result of its participation in  the EEA, Norway has adopted the acquis communautaire  in banking 
services regulations, with the exception of regulations  dealing with relations with third countries. 
139. Foreign, non-EEA-based service suppliers must obtain permission from the Norwegian 
Banking Insurance and Securities Commission to estab lish branches of banks, financing undertakings, 
securities brokerage firms, and management co mpanies for collective investment funds, in 
accordance with the Norwegian legislation regulating financial institutions, as amended by Act No. 46 
of 28 June 1996 on establishment of in Norway of providers of financial services suppliers situated 
outside the EEA.  To obtain such permission the su pplier must have permission to provide equivalent 
services in its home state and be subject to prudential supervision there.25 
140. The legislation applicable to the financial sect or, including commercial banks, other financial 
institutions and the securities market, is contained in several Acts.26  Since the last Review in 1996, 
several Acts and regulations regarding the financia l sector have come into effect.  In some cases, 
these have been put in place to meet EEA require ments.  Among the main Acts passed since 1996, 
Act No. 75 of 6 December 1996 on Guarantee Sc hemes for Banks and Public Administration 
etc. of Financial Institutions, which came into force on 1 January 1997, protects all deposits from 
non-financial institutions with Norw egian banks up to NKr 2 million per investor per bank.  Branches 
of foreign banks may join the scheme voluntarily.  Act No. 46 of 28 June 1996, which entered into 
force on 1 July 1996, allows for establishmen t in Norway of branches of banks, financing 
undertakings, securities brokerage firms, and manageme nt companies for collective investment funds.  
Such establishment is subject to prior author ization from the Norwegian Banking Insurance and 
Securities Commission.  To obtain permission the financial services supplier must be permitted to 
provide equivalent services in its home state a nd be subject to prudential supervision there. 
141. A 10% ownership limit in commercial banks and savings banks applies to individual 
investors;  it does not apply, however, to the owne rship of banks by a holding company of a financial 
group.  Foreign banks are exempted from the 10% lim it, allowing them to establish or acquire wholly 
or partially owned commercial bank subsidiaries in Norway.  The other owners must be foreign or 
Norwegian banks.  The previous rule, limiting foreig n ownership to one third of the share capital in a 
financial institution, was repealed on 1 January 1995.  Func tional nationality restrictions apply to all 
banks;  in the case of commercial banks, at least half of the board of directors, and the corporate assembly, must be nationals and permanent residents of an EEA member state.  
142. The Financial Activities Act (Act No. 40 of 10 June 1988, relating to Financing Activities and 
Financial Institutions) was amended in 1999.  This was in response to a proposal by the Government 
to Parliament to grant an exception from the genera l 10% ownership limitation in  financial institutions 
for holdings of up to 25% in combination with strategic cooperation and alliances.  The proposed 
amendments to the Financial Activities Act were passed by Parliament, and put into force on 
17 December 1999.  The amendment makes it possible for the Ministry of Finance and Customs to 
approve licences involving larger stakes of owners hip, in cases of strategic cooperation, both between 
Norwegian financial institutions and between  Norwegian and foreign institutions.   
                                                     
 
25 WTO document S/C/N/64, 23 June 1997.   
26 Act No. 2 of 24 May 1961, relating to Commercial Banks,  Act No. 1 of 24 May 1961, relating to 
Savings Banks;  Act No. 40 of 10 June 1988, relating to Financing Activities and Financial Institutions,  Act 
No. 59, or Companies Act of 4 June 1976;  the Securitie s Trading Act No. 79 of 19 June 1997;  Act No. 39 of 
10 June 1988 relating to Insurance Activities;  Act No. 1 of 7 December 1956 on Supervision of Credit 
Institutions, Insurance Companies, Securities Trading, et c.;  and Act No. 46 of 28 June 1996, amending the 
provisions of Financial Legislation relating to the Estab lishment in Norway of Providers of Financial Services 
with Headquarters in Stat es outside the EEA, etc. Norway WT/TPR/S/70 
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143. The Government is considering amending ow nership regulations, based on a recommendation 
by the Banking Law Commission presented on 18 August 1998.  Based partly on the recommendation, a bill was passed through Parliament  in 1999 to allow merg ers between self-owned 
financial institutions (i.e. savings  banks and mutual insurance companies).  This made possible the 
merger of Sparbanken NOR with Gjensidige  Insurance, to form Gjensidige NOR. 
(b) Insurance 
144. The insurance sector, including pension funds  and schemes, comprised some 366 companies 
at end 1999, of which 67 were insurance companies.   In the last few years, the Government has 
reduced its involvement in insurance activities, a nd a process of mergers and acquisitions has begun.  
The Norwegian insurance company Storebrand and the Swedish insurance co mpany Skandia agreed 
in February 1999 to merge their non-life insuran ce divisions, with 44% and 56% of the capital share 
respectively.  The Finnish insura nce company Pohjola joined the me rger in June 1999 creating the 
largest general insurance company in the Nordic c ountries with a market share of 40% in Norway.  
Norwegian life insurance companies ha ve also been increasing their equi ty investments rapidly:  some 
23% of their total assets were invested in shares at the end of the third quarte r of 1998, of which 50% 
in foreign shares.
27  There are around 250 private and municipal pension funds operating in Norway.  
Pension funds must be fully funded;  they enjoy preferential tax treatment.  Premiums for pension 
funds are determined in accordance with calcula tion bases approved by the Banking, Insurance and 
Securities Commission;  other premiums are determined freely.  Increases of capital must be approved by the Commission. 
145. Insurance companies operating in Norway requi re a licence from the Banking and Insurance 
Commission;  firms incorporated in Norway must be organized as joint-stock companies or mutual 
insurance companies, and insurance brokerage firms must be organized as joint stock companies.  The 
manager, at least half the members of the board of directors and half the members of the corporate assembly of an insurance company or subsidiary, must be permanent residents of Norway.  This 
requirement does not apply to EEA citizens residing in an EEA state.  Norwegian and non-EEA 
insurance companies are subject to a separation requirement between life, non-life and credit-risk 
insurance. 
146. The Norwegian insurance market is generally  open for the commercial presence of foreign 
insurance services providers.  Foreign EEA as we ll as non-EEA insurance companies may establish 
subsidiaries or branches in Norway without any limitation.  A 10% individual ownership limitation 
applies, however, to Norwegian insurance compan ies.  This limitation does not prevent foreign 
insurance companies, EEA and non- EEA, from establishing or acquiring partially or wholly owned 
subsidiaries in Norway, provided the other owners  are foreign insurance companies or Norwegian 
financial institutions. 
147. The cross-border supply of insurance services is limited for non-EEA insurance companies, 
as reflected in the WTO Understanding on Commitmen ts in Financial Services;  they may supply 
cross-border reinsurance.  Cross-border direct in surance services by non- EEA insurance companies 
must be supplied through an insurance broker authori zed in Norway.  Such supply is limited to the 
following insurance services, in  accordance with Regulation No. 923 of 24 November 1995 on 
insurance broker activity:  marine and transport insura nce;  aviation insurance;  insurance related to 
offshore exploration activities;  credit insurance or  security when the insure d pursues business within 
trade or industry or a liberal profession, and the insurance contract covers the business;  insurance 
contracts regarding domestic companies with an activity of at least 10 man years or annual sales of at 
                                                     
 
27 Kredittilsynet (1998), p. 17. WT/TPR/S/70 Trade Policy Review 
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least NKr 50 million.  Non-EEA insurance comp anies may not supply insurance required by 
Norwegian law, i.e. compulsory motor vehicle in surance.  The cross-border supply of insurance 
services is unlimited for EEA insurance companies. 
148. A number of amendments to the insurance legisl ation have been introduced since the last 
Review.  The Regulations of 18 September 1995, on division of insurance into classes for licensing 
purposes, bring Norwegian practice in this area in  line with EU Council Directive 79/267/EEC.  The 
Regulations, implemented in 1997, re quire insurance companies to obt ain different licences to operate 
in each of the defined "classes" of insurance.  Ot her changes include the introduction in 1997 of new 
Regulations on insurance companies' asset manageme nt, and on premiums and legal reserves in life 
insurance.28  The new asset management rules set a ceili ng of 35% on insurance companies' technical 
provisions that can be invested in shares.  The amended premium rules put in place the requirements 
imposed by EU life insurance directives as regards the fixing of premiums. 
149. As stated above, Norway upgraded its co mmitments on insurance in the extended 
Negotiations on Financial Services (Table AIV.4).  As a result, the scope of cross-border supply of 
insurance in the area of maritime and other means of  transportation was widened.   This seems to have 
been accompanied, however, by a narrowing of the segments in which Norway guarantees market 
access;  for example, insurance related to offshor e exploration activities was included in Norway's 
original GATS schedule of specific commitments, but  does not appear in the 1998 revision.  The 
Norwegian authorities have noted that the adjustment s to the Norwegian Schedule were made to base 
it fully on the Understanding on Commitments in Fi nancial Services.  Noting that the Norwegian 
Schedule under the Second Protocol to the GATS contained certain limitations on market access in 
the cross-border modes of supply (which refer to  Regulation No. 923 of 24 November 1995 on 
Insurance Broker Activities (see above)), the author ities expressed their view that these explicit 
limitations were (implicitly) covered by the Understanding. 
150. Among the establishment limitations remaining, foreign non-insurance financial institutions 
are not permitted to own an insurance subsidiary in Norway, whereas their Norwegian counterparts do 
have that option.  From 1 July 1996, non-EEA foreign insurance companies may establish a subsidiary  
for the establishment in Norway of branches of fo reign insurance companies.  As is the case for 
branches of banks, foreign, non-EEA-based insura nce suppliers must obtain permission from the 
Norwegian Banking Insurance and Securities Commi ssion for establishment in Norway and this 
permission is subject to the provision of equivalent services in the home country.29  In accordance 
with Regulation of 24 November 1995 on insurance broker activity, foreign insurance brokers granted 
permission to provide services in Norway through a branch must lodge a guarantee with the Norwegian Banking Insurance and Securities Commi ssion executed by a finan ce institution situated 
in an EEA state.
30 
(c) Securities 
151. New legislation dealing with securities was introduced in 1997.31  Regulations for the 
implementation of the Act were put in place by the Ministry of Finance and Customs on 
7 November 1997.  As a consequence, investment firms were given the opportunity to borrow and 
lend financial instruments, to sell short, and to e ngage in lending within certain limits.  The 1997 Act 
incorporated all the changes implemented through transitional regulations put in place in 1996, and 
                                                      
28 Regulation of 23 April 1997 on insurance companies' asset, and Regulation of 15 September 1997 on 
management premiums and legal reserves in life insurance. 
29 WTO document S/C/N/64, 23 June 1997. 
30 WTO document S/C/N/64, 23 June 1997. 
31 The Securities Trading Act No. 79, of 19 June 1 997, which entered into force on 1 December 1997. Norway WT/TPR/S/70 
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introduced other changes (e.g. on insider trading, notification and disclosure duties, and derivatives 
trading and supervision).  The im plementation of the 1997 Act was accompanied by a number of new 
regulations;  the scope of existing regulations  on employees trading on their own account was 
extended to investment firms and management companies for securities funds. 
(iv) Telecommunications and postal services 
(a) Overview 
152. Telecommunications and postal services acc ount for some 1.8% of GDP but have 
economy-wide growth and efficiency effects that wi dely exceed this modest share.  Since the last 
Review of Norway, the state monopoly rights of the telecom company Telenor has been abolished.  
Reflecting strong demand and a liberalized opera ting framework, the number of mobile telephone 
subscriptions has increased in recent years.  Th e penetration rate for mobile telephony has now 
exceeded the penetration rate fo r fixed telephony (Table IV.16). 
Table IV.16 
Telecommunications basic indicators, 1995-99 
Telephone traffic  
 Operating 
receipts Operating 
expenditure  Domestic  To foreign 
countries  Telephone 
connections  Mobile 
subscriptions   ISDN 
subscriptions  
 NKr million thousands of minutes  
1995  19,859 17,240 .. .. 2,431,271 981,305 12,314 
1996  22,170 19,505 .. .. 2,440,185 1,261,445 43,988 
1997  25,518 23,603 13,920,358 402,052 2,323,984 1,676,763 149,954 
1998  28,380 24,533 16,610,000 .. 2,167,000 2,106,414 309,937 
1999  33,468 89,466      
     Second quarter  8,104 7,103 4,642,000 .. 2,044,000 2,444,896 412,500 
     First quarter  7,747 6,937 4,732,000 .. 2,093,000 2,280,586 368,000 
.. Not available. 
Source: Statistics Norway. 
(b) Telecommunications 
General features 
153. Norway participated in the extended WTO Negotiations on Basic Telecommunications and 
attached scheduled commitments under the Four th Protocol, which supplements the initial 
commitments to the GATS.  Norwegian commitments cover several basic and value-added telecommunication services, for which it agreed to impose no limitations either on market access or on national treatment for cross-border supply, consumption abroad, and commercial presence.
32  
As many other countries, Norway also adopted, as additional commitment, the Telecommunications 
Reference Paper with its transparency requirement s, competition safeguards (including disciplines 
on anti-competitive cross-subsidization), intercon nection guarantees, neutral universal service 
requirements, and obligation to set up an independent regulator . 
154. Reflecting Norway's commitments in the WTO; the whole range of telecommunications 
services is open to competition, and 100% foreign ownership is allowed.  On 1 January 1998, the 
monopoly on fixed telephony of the state-owned national operator, Telenor, ceased, bringing free 
competition to the Norwegian telecom market.  By 14 February 2000, 33 provi ders of fixed telephony 
services were registered.  Although Telenor rema ins the dominant provider of fixed telephony 
services, Telenor’s competitors have greater market  shares in other parts of the telecommunication 
                                                      
32 WTO document GATS/SC/66/Suppl.3, 11 April 1997. WT/TPR/S/70 Trade Policy Review 
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market.  In March 1999, a merger between Telenor  and Telia was agreed between Norway, Sweden 
and the two companies, which would have given the Norwegian and Swedish states 40% and 60% of 
the merged company, to be gradually reduced to  33.4% each.  The merger was approved by the 
European Commission in October 1999, but was ca lled off in December 1999 by the states after a 
disagreement over the interpretation of the agreement.33  Norway is currently assessing alternative 
strategies for Telenor, which may in clude its partial privatization. 
Policy and regulatory framework 
155. The main legislation regulating the telecomm unications sector is the Telecommunications 
Act (No. 39) of 23 June 1995, in force as of 1 January 1996, as amended on 25 March 1999.  The 
Telecommunications Act covers all telecommunicat ions activities, including radio communications, 
and management of the electromagnetic freque ncy spectrum, but it does not apply to radio 
broadcasting and television programmes.  The King in  Council (i.e. the Government), the Ministry of 
Transport and Communications, the Norwegian Te lecommunications Authority Complaints and 
Advisory Board, and the Norwegian Post and Te lecommunications Authority (PTA) constitute the 
telecommunications authority under the Act. 
156. In accordance with the Telecommunications Act,  providers of public telephony services or 
providers that establish, possess or operate a pub lic telecommunications network for the purpose of 
providing transmission capacity require a licence if the undertaking in question has significant market 
power, defined as a market share of 25% or more, including participation in joint ventures;  other 
factors taken into account in the determinat ion of market power include the provider's 
ability to influence market conditions and its control of the means of access to end-users.  Conditions 
may be attached to a licence, for example, ge ographical coverage, inte rconnection of services, 
use of standards, or calculation of tariffs and accounting systems.  The Act mandates open and non-
discriminatory access to the telecommunications networks and services of any service provider with significant market power.  
157. Public telecommunications networks, public te lephony services and provision of transmission 
capacity that are not subject to licensing are subject to a registration requirement.  The provision of 
mobile telephone and paging services is subject to licen cing in all cases, and fees must be paid to the 
Post and Telecommunications Authority to cover administration costs.  Two different licences are 
required in the case of mobile telephones:  a fre quency licence, and a service licence.  In addition 
there is an annual frequency licence fee for the use of frequencies in the DCS 1800 band;  in 1999 this 
frequency licence fee was NKr 1 million per MHz.  Licences for the provision of the mobile 
telephone systems GSM 900 and DCS 1800 are valid for 12 years.  Under the Telecommunications Act, the PTA is granted standards enforcement pow er, and is entitled to impose a number of service 
requirements on providers.  The use of the electromagnetic frequency spectrum requires an authorization.  The use of radio equipment in ge neral requires a licence, but several types of radio 
equipment are exempt from this requirement.  Cabl e TV services are subject only to registration. 
158. All telecommunications equipment intended fo r connection to public telecommunications 
networks needs approval.  It is considered a pproved if it fulfils domestic  approval procedures or 
requirements resulting from the EEA Agreement or ot her international agreement to which Norway 
has acceded.  Placing in the market telecom equi pment that has not received type approval is 
prohibited.  Equipment dealers are subject to a re gistration requirement.  They may import any kind of 
equipment, whether approved or not, but only pl ace on the market approved and correctly marked 
equipment.  The authorities noted that Norway was in the process of implementing EU telecom 
                                                     
 
33 Norway Daily , No. 239/99, 10 December 1999, and No. 244 , 17 December 1999, [online].  Available 
at:  http://odin.dep.no/daily/1999/12/239.html and 244.html. Norway WT/TPR/S/70 
 Page 109 
 
 
equipment regulations, which are to be incorporat ed in the EEA Agreement.  This will replace the 
current type approval system with a general d eclaration by the manufacturer, and control and 
inspection by the Post and Telecommunications Authority.  
159. Complaints regarding the  violation of the requirements on open access to telecommunications 
networks and services can be lodged with the PTA for decision.  Cases may also be brought to the 
EFTA Surveillance Authority.  Some complaints re garding open access to networks have been lodged 
with the PTA in recent years.   
160. The Ministry of Transport and Communications is  in charge of policy-making in the post and 
telecommunications sector and of implementing the Telecommunications and Postal Services Acts, as 
well as decisions made by the No rwegian Parliament.  The Norwegia n Post and Telecommunications 
Authority (PTA) is a regulatory body reporting to th e Ministry of Transport and Communications;  the 
ministry, however, may not instruct PTA as to th e outcome of individual cases.  The activities of PTA 
are financed mainly through licence and spectrum fees.  The PTA acts as an advisor to the Ministry of 
Transport and Communications on policy issues, a nd participates in international cooperation on 
telecommunications regulation and frequency management.  The Authority may be asked to act as 
mediator in disputes between carriers. 
161. The PTA is also in charge of telecom standardization in Norway.  Its laboratory services 
section, Comlab, is the appointed Notified Body fo r telecommunications.  Comlab  tests and certifies 
radio and telecommunications equipment for EU a nd Norwegian technical approval, and contributes 
technical measures to the PTA's market surveillan ce activities  A number of te chnical regulations are 
in place for the telecommunications sector in Norway;  the vast majority refer to type approval and 
hence fall under the responsibility of the PTA.  So me of the main regulations issued since 1996 are 
shown in Table IV.17.  The authorities have noted that many of these technical regulations are likely 
to be repealed in connection with Norway's ongoing revision of the legislation on radio and telecom 
terminal equipment taking into account the changes at European level. 
162. Postal and telecommunication tariffs are not regulated in Norway, with the exception of fares 
of reserved services, as mentioned above.  Tariffs ar e determined by the operator, and approval is not 
required.  However, public voice te lephony and leased lines provided by  Telenor are subject to a price 
cap.  Providers with significant market pow er are expected to offer access to public 
telecommunications networks, delivery of public  telephony services, and transmission capacity at 
prices that reflect actual costs.  Moreover, prices must be set in an objective and non-discriminatory 
manner.  Operators must maintain separate account s for reserved services, for which a common tariff 
among operators must apply.  Carriers defined by the PTA as having significant market power, 
i.e. holding 25% or more of the market for a specific telecom service, must submit accounting data to 
support its pricing.  In 1998, the PTA determ ined that Telenor AS, Telenor Mobil AS, 
and NetCom GSM AS had significant market po wer, and hence had reporting obligations.  
Cross-subsidization from exclusive or special ri ghts activities to other telecommunication areas is 
prohibited. 
163. A number of regulatory decisions were introduced by the PTA in 1998 and 1999 to 
enhance competition and reduce costs for the consum er.  Pre-carrier selection was introduced as of 
1 June 1999, resulting in the possibility to route calls  to different providers for agreed services without 
dialling a routing prefix.  Previously, only Telenor's customers had this possibility.  
 WT/TPR/S/70 Trade Policy Review 
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Table IV.17 
Regulations in the telecommunications sector, 1996-99 
Date  No. Regulation 
22.02.96 0214 Regulations relating to type approval of terminal equipment requireme nts for attachment to the public telex netwo rk 
(tlx) 
08.03.96 0262 Regulations related to authorisation for installing a nd servicing internal teleco mmunications networks and 
telecommunications user equipment designed for conne ction to the public telecommunications network  
08.03.96 0263 Regulations relate d to authorisation for installing, repa iring and servicing radio equipment  
08.03.96 0264 Regulations related to the marketing, distribution and control of telecommuni cations and radio equipment, and the 
registration of telecommunications equipmen t suppliers and radio equipment dealers  
19.11.96 1067 Regulations relating to technical require ments for high capacity radio relay equi pment for the transmission of digital 
signals in the frequency bands up to 15 Ghz  
19.11.96 1068 Regulations relating to technical require ments for high capacity radio relay equi pment for the transmission of digital 
signals in the 18 Ghz frequency band w ith channel spacing of 55 or 110 MHz  
19.11.96 1069 Regulations relating to technical requi rements for digital fixed point-to-point  radio link equipment operating in the 
frequency range 24,25 to 29,50 Ghz  
19.11.96 1070 Regulations relating to technical require ments for radio relay equipment for the transmission of digital signals and/or 
analogue video signals in the 23, 38, 55 or 58 Ghz frequency bands  
02.06.97 0560 Regulations on allocation and use of numbers, number seri es, names and addresses for te lecommunications networks 
and telecommunications services (no. 560) (numbering regulations) 
05.12.97 1259 Regulations on public tel ecommunications networks and public  telecommunications services 
15.07.98 0730 Regulations relating to technical requirements for terminal equipment for connection to public MOBITEX networks 
15.07.98 0731 Regulations relating to supplementary technical provisions for terminal equi pment for connection to public 8 kbit/s 
MOBITEX network operated by Telenor Mobil 
02.09.98 0857 Regulations on na tional approval of telecommunication equipment 
18.09.98 0898 Regulations relating to  technical requirements for T-DAB broadcasting transmitters  
19.05.99 0650 Regulations relating to technical  requirements for Nordic Mobile Telephon e (NMT) telecommunications equipment  
Source : Information provided by the Norwegian authorities. 
(c) Postal services 
164. The regulatory framework for the provision of postal services is contained in Act No. 73 of 
29 November 1996 relating to the provision of universal  postal services (the Postal Services Act), as 
amended by Act No. 5 of 9 January 1998 and Ac t No. 24 of 30 April 1999;  Regulations of 
1 July 1997 relating to the provision of Universal Po stal Services;  and Licence of 1 October 1997 on 
Reserved Services and Universal Service Obligations, gr anted to Norway Post.  Norway Post's licence 
expires on 30 September 2001. 
165. The Postal Services Act also provides that the re gular provision of postal services in return for 
remuneration may only be carried out through a pe rson who has been granted a licence by the 
Ministry of Transport and Communications.  The li cence may be subject to a time-limit, and to a 
number of conditions, including the duty to provide  universal postal services and service and quality 
criteria.  In general, the Ministry has been em powered to lay down regulations concerning further 
limitations of the licensing requirements and, accord ing to the authorities, has done so.  Only postal 
operators inside the area of the reserved services (i.e . delivery of registered mail) must apply for a 
licence. 
166. In accordance with the Postal Se rvices Act, Norway Post has b een given the exclusive right to 
regularly distribute, in return for remuneration,  closed, addressed, domestic letters weighing up to 
350 grams, and to distribute in Norway comparab le items from other countries, and to distribute 
comparable items from Norway to other countries unde r the conditions laid down in the licence.  The 
distribution of books, catalogues, news papers, and periodicals is not part of the reserved services.  The 
exclusive right to distribute reserved services is rest ricted by a price limit:  only items with a price not 
exceeding five times the basic rate for a domestic priority letter of 20 grams are included in the list of 
reserved services. Norway WT/TPR/S/70 
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167. The price charged for the universal services provide d by Norway Post are to be calculated in 
accordance with costs.  For reserve d services, there should be geographically uniform tariffs, which 
are subject to approval by the Ministry of Trans port and Communications.  The PTA is responsible 
for monitoring compliance with postal service rules and the fulfilment by Norway Post of its licence 
requirements.  The PTA replaced the Norwegia n Telecommunications Authority in 1997, and 
assumed responsibilities for monitoring postal services. 
(v) Transportation and related services 
168. Transportation accounted for some 6% of Norw ay's GDP in 1998;  a quarter of this was 
generated by water transport and three quarters by air, rail, and road transport.  Norway made 
commitments under the GATS for air, rail, road, and maritime transport services.  In the cross-border 
mode of supply, market access and national treat ment were left unbound, except for maritime 
services, and air transport services that fall within the scope of the GATS. 
(a) Maritime transport 
General features 
169. The coastal topography (deep fjords, islands, a nd narrow straits) of Norway makes maritime 
transport an important component of the Norwegian tr ansport system.  Maritime services have also an 
important international dimension:  Norway offers a wide range of services internationally, some 90% 
of the Norwegian fleet is engaged in internationa l activities, and Norwegian companies control around 
10% of the world's merchant fleet.  Norway's fleet of offshore service vessels is the world's second largest, owing to the country's large oil and natura l gas industry.  Over two thirds of Norway's 
international trade takes place via maritime trans port.  Cabotage trades are open to foreign flag 
vessels.  Norway has no bilateral cargo-sharing agre ements or other restrictions on freight.  The 
maritime transport industry forms a nucleus of a maritime cl uster which includes ship equipment, ship 
broking, yards, insurance and banking, classification, research institutions, etc. 
170. Maritime services accounted for some 1.3% of GDP and 1999.  Shipping represents Norway's 
second largest source of export revenue s, with gross earnings of US$6.9 billion in 1998.  At end 1998, 
there were 3,695 vessels with a total of 3.1 million GT registered in the Norwegian Ordinary Ship 
Register (NOR), and 748 vessels with a total of  19.7 million GT registered in the Norwegian 
International Ship Register (NIS) (Table IV.18).  No rway's fleet is the third largest in the world in 
tonnage. 
Table IV.18 
Vessels registered in No rwegian ship registersa 1992-1997  
Norwegian Ordinary Ship Register (NOR)  No rwegian International Ship Register (NIS)  
Total  Net increase  Total  Net increase  End of year 
Vessels  Tonnage  Vessels Tonnage  Vessels Tonnage  Vessels  Tonnage 
 thousand GT thousand GT thousand GT thousand GT 
1992 3,736 2,039 -167 128 858 20,464 -38 -1,482 
1993 3,654 2,137 -82 98 790 19,361 -68 -1,103 
1994 3,616 2,288 -38 151 757 19,990 -33 629 
1995 3,577 2,717 -39 429 700 18,668 -57 -1,322 
1996 3,623 2,863 46 146 683 18,944 -17 276 
1997 3,667 3,110 44 247 716 19,664 33 720 
1998 3,695 3,323 28 213 748 19,655 32 -9 
a Vessels of 25 GT and over, including fishing a nd catcher boats, and special types of vessel. 
Source:  Information provided by the Norwegian authorities. WT/TPR/S/70 Trade Policy Review 
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171. Norway has ratified the Hague/Hague-Visby Rules for international maritime transport.  The 
provisions of chapter 13 of the Norwegian Maritim e Code reflect these rules and apply when the 
agreed port of loading is in a Hague/Hague-Visby state, as well as to the agreements for the transportation of goods between Norwegian ports  and ports in the other Nordic countries.  
172. Norway plays an active role in internationa l negotiations and discussions on shipping policy 
issues;  its main policy goal is to develop equa l market access conditions and uniform rules on safety 
and environment at sea, thus enhancing mark et access for Norwegian shipping companies and 
benefitting their customers.  Norway is a party to  the UN Convention on a Code of Conduct for Liner 
Conferences, subject to the outsider declaration and Brussels package.  The Competition Act of 
11 June 1993 applies to national trades in the mar itime sector.  Price collaboration in conferences is 
illegal under the Competition Act, unless the Competition Authority grants an exemption.  Three Norwegian shipping companies currently bene fit from an exemption on price collaboration, 
until 2001.  No new exemptions have been granted since Norway's last Trade Policy Review in 1996.   
International trades are governed by Regulation No. 964 of 4 December 1992, which implements EU 
Council Regulation 4056/86 on liner conferences, and European Commission Regulation 870/95 on 
consortia, both of which have been included in the EEA Agreement. 
Institutional and regulatory framework  
173. The Ministry of Trade and Industry and th e subordinate Maritime Directorate and 
Shipregisters are responsible for maritime transport policy formulation and management.  In addition, 
several other ministries (Defence, Environment, Fisheries, Foreign Affairs, Justice and 
Transportation) have shared responsibility for the sector. 
174. The main legislation governing maritime transpor t is the Norwegian Maritime Code No. 39 of 
24 June 1994, with later amendments up to Act No . 2 of 2 August 1996.  Other important legislation 
includes Act No. 48 of 12 June 1987 relating to a Norw egian International Ship Register;  Act No. 7 
of 9 June 1903 relating to Public Control of the Seaworthiness of Ships, etc. (the Seaworthiness Act), 
as amended up to 1995;  the Seaman's Act No. 18, of 30 May 1975;  and Act No. 84 of 17 December 
1982 relating to Safe Containers.  
175. European Union legislation on maritime transpor t contained in the EEA Agreement applies in 
Norway.  Since the last Review of Norway, a numbe r of laws and regulations  concerning the maritime 
services industry have been passed or amended.  These relate mainly to the implementation of 
international instruments, in particular Inte rnational Maritime Organi zation conventions and 
recommendations and EEA directives a nd regulations.  Some of the main regulations introduced or 
amended include:  Regulation No. 7/96 of 1 July 1996 concerning the Control of Foreign Ships, etc.;  The Marine Equipment Regulations, am ended on 29 December 1998 to implement Council 
Directive 96/98EC prescribing procedures for th e manufacturing, marking, and approval of 
marine equipment manufactu red after 1 January 1999
34;  an amendment to Regulation No. 695 of 
15 September 1992, concerning the construction of  passenger ships, cargo ships and barges, to 
implement the new chapter XII of the Convention for th e Safety of Life at Sea;  and an amendment to 
Regulation No. 506 of 15 June 1987 , concerning a survey for the issue of certificates to passengers 
ships, cargo ships and lighters a nd concerning other surveys, etc.35 
176. Under Norwegian law, ships may be registered in  Norway or abroad.  If a Norwegian register 
is chosen, all ships longer than 15 meters may be entered in the Norwegian Ordinary Register (NOR), 
or in the Norwegian International Ship Register (NIS ).  To be registered in the NOR ships must be 
                                                      
34 Norwegian Mariti me Directorate, Navigare , January 1999. 
35 Norwegian Mariti me Directorate, Navigare , April 1999. Norway WT/TPR/S/70 
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owned by an EEA national or by a Norwegian company where EEA nationals own at least 60% of the 
capital of the owning partnership or company;  the definition of the 60% minimum ownership requirement varies according to the type of sh ipping company.  Limited liability ship-owning 
companies must be headquartered in Norway, an d the majority of board members must be EEA 
citizens resident in Norway.  Non-EEA nationals may not register a ship in the NOR.  Ships registered 
abroad that are bought by a Norwegian company mu st comply with the standards of Norwegian 
classification before they can be registered.
36 
177. Foreign shipping companies may also register th eir vessels in the NIS, in accordance with the 
Norwegian International Ship Register Act.  They must satisfy a nationality condition laid down in the 
Norwegian Maritime Code, be a limited company or partnership with its head office in Norway, or 
have appointed a representative who fulfils the natio nality requirements.  Ships with more than 40% 
foreign ownership must be operated by a Norwegia n ship-owning company with its head office in 
Norway, or by a Norwegian management company. 
178. Trading area restrictions apply for ships register ed in the NIS, in acco rdance with Act No. 48 
relating to the Norwegian International Ship Register  (NIS) of 12 June 1998.  Ships registered in the 
NIS are not allowed to carry passengers and cargo be tween Norwegian ports or to engage in regular 
scheduled passenger transport between Norwegian and foreign ports.  Oil and gas installations on the 
Norwegian continental shelf are considered Norwegian ports in the context of the NIS Act, and hence, 
ships registered in the NIS are excluded from carry ing cargo from them to the Norwegian mainland.  
The Ministry of Trade and Indust ry has issued regulations concer ning special trading areas for NIS 
registered vessels and offshore mobile un its engaged in the petroleum industry. 
179. Nationality requirements may be waived in cer tain cases, with prior dispensation from the 
Norwegian Maritime Directorate.  In 1999,  the Norwegian Maritime Directorate granted 
910 dispensations from the Norwegian nationality require ments for masters of ships registered in the 
NIS, up 154 from the preceding year.  There are no  restrictions for employment of non-Norwegian 
seafarers for vessels registered in the NIS.  About 16,000 seafarers, many of whom were foreigners, 
worked on vessels registered in the NIS in 1999 compared with 15,937 in 1997.37  
180. Registration in the NIS is subject to the payment of a fee.   
181. Special provisions apply to pay and working conditions on ships registered in the NIS, which 
are fixed in a special collective wage agreement subject to Norwegian law and Norwegian court of 
law.38 
182. A tonnage tax system was introduced in 1996.  Shipping companies may choose to pay 
ordinary profit taxes at 28%, or a tonnage tax, wh ich is calculated as a fixed amount on the tonnage of 
the vessel.  The payment of dividends to sharehol ders in companies included in the tonnage tax 
system is subject to the 28% tax rate on profits.  Th is arrangement is limited to companies formed as 
per the Norwegian Joint-Stock Company Act.  Inco me from the operation of ships registered in the 
NIS but owned entirely by non-residents is  not taxed in Norway.  Dividends paid to foreign 
shareholders in shipping companies under the tonnage tax system is subject to a withholding tax of up 
to 25%.  Reduced rates may apply to foreign sharehol ders if there is a tax treaty between Norway and 
their country of domicile. 
                                                      
36 Act No. 7 of 9 June 1903 relating to Public Control of the Seaworthiness of Ships, etc. (the 
Seaworthiness Act), as amended up to 1995. 
37 Norwegian International Ship Register (NIS), 1998. 
38 Section 6 of Act No. 48 of 12 June 1987 relating to a Norwegian International Ship Register, as 
amended by Act No. 21 of 8 January 1993. WT/TPR/S/70 Trade Policy Review 
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183. Commercial public ports are municipal.  Some  ports may be owned by private companies 
with production and or trade facilities in the area.  The operation of ports is financed by fees on a cost-recovery, non-discriminatory basis.  
(b) Air transport 
184. Some 10 million passengers were transported on domestic services in 1999 (Table IV.19).  
There are 58 airports, of which 45 are owned by the Norwegian State.  In recent years, substantial 
public investment has been channelled into develo ping and modernizing the larger airports, and in 
October 1998 a new international airport was opene d at Gardermoen, 50 km north of Oslo.  The 
Norwegian state holds 50% interest in SAS Norge AS A, one of the three parent companies that own 
the consortium and air carrier Scandinavian Airlines System (SAS) .  The other 50% is owned 
by private individuals.  The ownership structure of  the Swedish and the Danish parent companies is 
the same.  The interest of the Norwegian, Swedish and Danish parent companies in the consortium is 
2/7, 3/7, and 2/7 respectively.  In addition to  SAS there are several private Norwegian carriers .  
Table IV.19 
Civil aviation statistics, 1994-99 
Passenger departures from Norwegian airportsa Freight and mail received and 
sent (tonnes) Domestic 
scheduled air 
service 
Domestic  International  Domestic  International Passengersb   
Scheduled  Charter  Scheduled Charter     
1994 7,112,124  12,272  2,100,803  610,532  85,868  43,626  8,117,263  
1995 7,927,558  11,907  2,134,346  673,411  89,423  41,700  8,515,512  
1996 8,703,579  11,674  2,410,660  773,121  91,568  46,077  9,280,182  
1997 9,048,757  15,784  2,746,857  844,178  92,030  51,516  9,822,081  
1998 9,463,706  9,274  2,970,518  818,546  90,230  54,306  10,222,444  
1999 9,298,160 8,402 2,919,010 874,456 81,808 57,413 9,665,710 
a Excluding passengers in transit/transfer. 
b Counting transfers.  Passengers paying less than 25% of full price are not included. 
Source : Civil Aviation Administration. 
185. The Norwegian air carriage of goods and passenge rs is regulated by the Norwegian Aviation 
Act of 1993.  Norway has ratified the Warsaw Convention of 1929, and amendments (the Hague 
Protocol of 1955 and the Montreal Protocols of 1975), the Guadalajara Convention of 1961, and the 
Chicago Convention of 1944.  Norway implements EC regulations in the field of civil aviation as part 
of its participation in the EEA Agreement.  Cabotage was reserved for national carriers until 
April 1997, when it was opened to airlines from other EEA partners.  Bilateral civil aviation 
agreements exist with a number of countries.  Norw ay's only truly open skies agreement is with the 
United States, and was signed in 1995.  Several othe r arrangements close to open skies agreements are 
applied. 
186. In accordance with the EEA Agre ement, airlines operating in Norway are free to determine 
price levels, and the authorities may only interfere in the establishment of prices in special cases.  The 
regulations contain rules for the approval of air tran sport companies and, in order to ensure fair and 
free competition, for the distribution of take-off and landing slots, and the design of the computerized reservation systems.  The regulations also incl ude rules concerning compensation for overbooking, 
mutual recognition of pilot’s certificates and join t technical/operational requirements for pilots and 
airline companies.  The Norwegian Civil Aviation Authority is responsible for granting licences and 
enforcing in Norway most of the EC regulations mentioned above.  The assignment of landing/take-
off slots is the responsibility of the Norwegian Air Traffic and Airport Management.  The EEA Norway WT/TPR/S/70 
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Agreement also includes rules concerning comp ensation for overbooking, mutual recognition of 
pilot's certificates and joint technical/operational requirements for pilots and airline companies.   
187. Foreign ownership restrictions apply to non-EEA  companies serving the domestic market;  
foreign ownership is limite d to one third of the capital in the jo int-stock company, the other two thirds 
must be in the hands of Norwegian natural or legal persons or Norwegian governmental bodies.  
(vi) Tourism 
188. Tourism is an increasingly important activity in Norway:  in 1999, it accounted for some 4% 
of GDP, with hotel and restaurant services alone accounting for some 1.4% of GDP;  and employed 
6.7% of the total work force.  There are la rge spillover effects on other activities, such as 
transportation.  Tourism also enhances the use of local resources, and contributes to the Government's 
regional policy objective, by generating employment throughout the country.  
189. Some 40% of hotel service expenditure is imput able to foreigners, 32% to Norwegian private 
consumers, and 27% to Norwegian businesses.  Desp ite the large presence of foreign tourists (some 
3 million tourists arrived in Norway in 1998), the t ourism sector generates a deficit.  The total number 
of nights spent in Norway by foreign tourists was over 5 million in 1999. 
190. The Ministry of Trade and Industry is responsib le for policies related to tourism activities.  
The Ministry is also in charge of issuing licences to tour operators, hotels, restaurants and other 
establishments.  Applicants for a licence to run a restaurant service must furnish proof of their 
qualifications to provide the service.  In many cases, Norwegian regulations affecting tourism are a result of general economic, political, and social con cerns applying to other policy areas.  Different 
ministries and local authorities are responsible for such regulations, due to the horizontal aspects of 
tourism (transport planning, environment, h ealth, safety, building requirements, etc.). 
191. In Norway's GATS Schedule, for tourism services, market access and national treatment are 
mainly regulated by horizontal commitments on establishment and movement of natural persons.  
Within the EEA, there is mutual recognition of licensing and certification requirements for some categories of service suppliers. Norway WT/TPR/S/70 
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