Time and place for the trial lecture
25th of August 10:15am-11:00am in Gamle festsal. The title for the trial lecture will be: Betydningen av juridisk og samfunnsvitenskapelig teori ved analyse av rettsregler i en endret sikkerhetspolitisk kontekst.
The trial lecture and the disputation can also be followed by zoom.
Adjudication committee
- Professor Christoffer C. Eriksen, University of Oslo (leader)
- Professor Knut Einar Skodvin, University of Bergen (1. opponent)
- Associate Professor Guri Rosen, University of Oslo (2. opponent)
Chair of defence
Vice dean Ivar Alvik
Supervisors
- Professor Finn Arnesen, University of Oslo
- Professor Ola Mestad, University of Oslo
- Partner Anders Arnkværn, Thommessen Law firm
Summary
In 2021, a Norwegian company producing engines used by the Norwegian Armed Forces was set to be sold to a Russian-owned group. The Government then halted the sale on grounds of national security interests.
The Bergen Engines case is not unique. In recent years, states have increasingly adopted regulation to control foreign investments and other economic activity that may threaten national security. Such state measures have gained urgency amid intensifying great-power tensions: Russia's full-scale invasion of Ukraine, an accelerating technology race between the United States and China, and a deteriorating security environment in which trade and business have become an arena for power politics.
The question of how such regulation should be designed is more pressing than ever. This thesis examines how states can design regulation that safeguards security needs while preserving an open economy.
A rapidly emerging field
What conduct is the state seeking to protect against? What requirements must an intervention satisfy to be lawful under EEA law? And how should the rules be designed to avoid becoming so broad or unclear that they can be misused for other, illegitimate purposes?
The thesis takes investment screening as its point of departure. The same questions, however, apply to a broader field: export controls, sanctions, control of supply chains and research cooperation, and more recent EU measures such as the Foreign Subsidies Regulation and the Chips Act. To date, no comprehensive legal scholarship on regulation in this area exists in Norway. The thesis thus constitutes the first legal research in this country within this rapidly emerging field. Investment screening is examined in conjunction with adjacent legislation and other instruments of state governance, and the thesis combines legal-dogmatic method with theory from the social sciences, security studies, and risk research.
Investment screening is only one instrument among several
The thesis shows that security-threatening investments constitute only a small part of the total spectrum of security-threatening economic instruments states can deploy against one another. These also include tariff measures, subsidies, monetary and currency policy, as well as nationalisation and expropriation. A key finding is therefore that investment screening must be viewed in conjunction with adjacent legislation such as export controls, sanctions, and the Norwegian Security Act, and with more direct instruments such as state ownership and golden-share arrangements. A thorough mapping of existing legislation is accordingly necessary before new rules are developed.
Do the Norwegian rules comply with EEA law?
EU and EEA law, based on the four freedoms – the free movement of goods, services, capital, and persons – sets the strictest limits on how far the state may interfere with the free movement of capital and the freedom of establishment. Drawing on the case law of the Court of Justice of the EU concerning prior-authorisation schemes, the thesis establishes that interventions must satisfy the following conditions: a legitimate purpose, suitability and necessity, and that the criteria triggering control are published in advance, are clear and non-discriminatory, and that decisions are subject to review. Measured against these requirements, the Norwegian ownership-control rules appear, overall, suitable and necessary. At the same time, the thesis identifies several weaknesses indicating that the regulation does not meet the fundamental requirements of EEA law for prior-authorisation schemes. A comparison with Germany shows that Norway has likely developed a more suboptimal investment-screening regime, and that the legal framework is shaped as much by a state's institutions and societal norms as by the threat landscape. This explains why other states' regulatory solutions cannot simply be copied.
How to develop good regulation?
Good regulation rests on several factors. A thorough understanding of risk is one of them: the ability to understand the threat landscape often determines whether the state chooses a well-targeted instrument. Equally important is mapping existing legislation, both security legislation and sector-specific laws, before new rules are developed. This ensures that the state addresses genuine needs rather than creating overlapping or deficient regulation. When reforming its regulation, the state should also be conscious of how its own institutions and societal norms are configured.
The state must also strike a balance between security and an open economy. If the focus on security becomes too strong, the instruments risk becoming disproportionately costly or themselves undermining what they are meant to protect: democracy, the rule of law, and an open economy. The two concerns need not, however, be viewed as a zero-sum game – foreign investment strengthens the state's economic stability and freedom of action, and thereby also national security interests. In any event, the balancing must take place within the framework of EU/EEA law, where the rules must satisfy the requirements for restrictions on the fundamental freedoms.
Norway on the outside, and the significance going forward
The EU's central measures, the Screening Regulation, the Chips Act, and the Foreign Subsidies Regulation, are anchored in trade policy and are not part of the EEA Agreement. The EFTA states thus remain outside the EU's coordinated security cooperation, even though they are an integrated part of the internal market and face the same threat landscape.
The thesis argues that the three regulations nevertheless have legal EEA relevance, and points out that the EEA Agreement opens an avenue for voluntary cooperation and information exchange with the EU. Such cooperation appears necessary to reduce vulnerabilities in a closely integrated market.