International Trade 2023

Last Updated October 25, 2022

Sweden

Law and Practice

Authors



Mannheimer Swartling has an extensive international practice, with a strong focus on the Nordic region. The firm employs over 400 lawyers, based in offices in Sweden, Belgium, Singapore and the USA. The firm has considerable experience in trade matters, covering customs, national security and foreign direct investment, trade defence measures and export control and sanctions. The firm regularly handles trade law matters before various authorities, including complex classifications and voluntary disclosures, as well as litigation before Swedish and European courts and arbitration. The trade law team also helps clients with risk assessments, compliance programmes and investigations, and has an extensive network of international trade law professionals in other jurisdictions.

Sweden is a member of the WTO and the European Union (EU). As a member of the EU, Sweden’s trade-related commitments primarily stem from agreements concluded between the EU and other members of the WTO.

As a member of the EU, Sweden does not conclude any free trade agreements on its own. However, Sweden takes an active part in the preparations and negotiations led by the EU.

The EU actively engages with countries or regional groupings to negotiate trade agreements. These agreements grant mutually beneficial access to the internal markets of the EU and to the countries concerned.

For a full overview of the free trade agreements that Sweden, as a member of the EU, is a party to, as well as other free trade agreements that the EU is negotiating, please see the European Commission’s Directorate for Trade website.

Sweden does not conclude any other agreements and does not adopt any unilateral measures to reduce tariffs beyond those adopted in the EU.

However, Sweden does participate in regional partnerships, such as Nordic Co-operation (Nordiskt samarbete), which is deeply rooted in the political, economic and cultural commonalities of the Nordic region. In general, the partnership focuses on areas where a Nordic approach generates added value for the countries and peoples of the region. The vision of Nordic Co-operation is to make the Nordic region the most sustainable and integrated region in the world.

Nordic Co-operation also examines questions such as trade barriers in practice – see, for instance, their report from 21 September 2020, “Trade in goods on equal terms? Customs and VAT in the Nordic region from a trade barrier perspective” (Varuhandel på lika villkor? Tull och moms i Norden ur ett gränshinderperspektiv).

The EU has trade agreements in place with multiple countries/regions, and is currently negotiating various new agreements, including with Australia, China, Indonesia, New Zealand and the Philippines.

Key developments occur at EU level, as Sweden does not conclude any trade agreements on its own.

As a large trading bloc, the EU is consistently renegotiating and developing agreements with its trading partners. Details of current and ongoing renegotiations are available on the European Commission’s website.

The name of the administrative authority governing customs matters in Sweden is Swedish Customs (Tullverket).

Decisions by Swedish Customs can be appealed to the Administrative Court (Förvaltningsrätten) in the first instance and the Administrative Court of Appeal in the second instance (subject to leave of appeal). Although it is very rare that leave of appeal is granted against a second-instance court ruling, parties may seek to appeal such rulings to the Supreme Administrative Court (Högsta förvaltningsdomstolen, HFD).

Swedish Customs also has a separate and independent function called the General Representative of Swedish Customs (Allmänna Ombudet), which has the powers to appeal decisions by Swedish Customs.

Additionally, the National Board of Trade Sweden (Kommerskollegium) handles certain trade licences and authorisations such as applications for duty suspensions and export licences.

Swedish Customs has a special branch that enforces customs laws and regulations, which may hand over cases to a prosecutor in case of suspected violations.

Swedish companies experiencing barriers when trading with other countries can report the issue to the National Board of Trade, which will investigate the reported issue and explore possible solutions. The National Board of Trade also takes on a proactive role by approaching companies to collect information about experiences of trade barriers.

Some of the most common trade barriers that the National Board of Trade investigates are high customs duties, discriminatory taxes, unjustified requirements for goods and services, and testing of already approved products, as well as national standards.

When investigating trade barriers, the National Board of Trade co-operates with the Swedish Ministry for Foreign Affairs, the European Commission, trade associations, and Swedish embassies around the world.

Some trade barriers can be reported free of charge to the service SOLVIT (in Sweden provided by the National Board of Trade), which companies and private individuals can turn to if, for instance, they encounter trade barriers within the EU and the EEA (ie, the internal market).

Furthermore, companies from developing countries that wish to export to Sweden may contact Open Trade Gate Sweden, which is part of the National Board of Trade. Open Trade Gate Sweden is a one-stop information centre tasked with assisting exporters from developing countries interested in the Swedish market. In order to facilitate trade and increase exports from developing countries, Open Trade Gate Sweden provides information on rules and technical requirements, as well as market information.

If companies from developing countries experience obstacles when seeking to export to Sweden, they may report this to Open Trade Gate Sweden. Should Open Trade Gate Sweden find that a requirement or procedure is unjust or too bureaucratic, it will try to solve the problem by contacting the relevant authorities in Sweden.

The transition to a digitalised and modern environment for customs formalities under the Union Customs Code (UCC), which is the main legal framework for customs regulations and procedures within the customs territory of the EU, is in full progress. Swedish Customs has adopted an implementation schedule and is implementing the changes necessary for the completion of the transition. For instance, since 15 March 2022, companies can lodge their standard customs declarations for the release for free circulation electronically, through a newly introduced import system. As of 31 December 2022, all standard customs declarations for the release for free circulation are to be lodged through this system. Moreover, Swedish Customs is developing a new export system which is expected to be implemented during the fourth quarter of 2024.

The UCC entered into force on 1 May 2016 and set an initial deadline of 31 December 2020 for the progressive completion of the work in terms of IT transition and implementation. However, the Council and the European Parliament adopted a regulation in April 2019 (Regulation (EU) 2019/632) establishing new deadlines of 2020, 2022 and 2025 for cessation of the use of transitional arrangements. Moreover, in early October 2022, the European Commission published proposals which, if adopted, entail that the deadlines for introducing some of the systems that were due to be launched in late 2022 and early 2023 will be extended.

Furthermore, the sanctions targeting Russia, Belarus and the non-government controlled regions of Ukraine adopted by the EU in late February 2022 and onwards have also had consequences for customs. Swedish Customs has announced that, as a result of the extended import and export restrictions against Russia, Belarus and the relevant regions of Ukraine, it monitors exports and imports to these countries with particular care and that this might have negative effects on the authority’s processing times. Swedish Customs has also announced that the adoption of the sanctions could entail that some authorisations already granted by Swedish Customs and the National Board of Trade are now invalid.

The most significant expected changes are the further development of e-customs and digitalisation. See 2.4 Key Developments in Customs Measures.

Sweden does not adopt any unilateral sanctions. Sweden implements and applies the sanctions regimes adopted by the United Nations Security Council and the EU. These regimes do not include sanctions applying with extraterritorial jurisdiction.

The responsibility for the co-ordination of sanctions lies with the Ministry of Foreign Affairs (Utrikesdepartementet).

The Act on Certain International Sanctions (Lagen(1996:95) om Vissa Internationella Sanktioner) and a number of government decrees adopted on the basis of that Act contain provisions concerning the implementation of international sanctions and embargoes decided by the UN Security Council and the EU.

Government agencies that administer or enforce sanctions include:

  • the Inspectorate of Strategic Products (Inspektionen för Strategiska Produkter, ISP), which has the main responsibility for handling export control and sanctions, including granting many types of export authorisations under sanctions regimes;
  • the Swedish public prosecutor’s office, which is responsible for the investigation of crime;
  • the National Board of Trade (Kommerskollegium), which is responsible for processing applications for (i) certain types of export authorisations and (ii) exemptions from the freezing of assets and other financial resources for legal persons, as well as matters under the EU Blocking Statute;
  • the Social Insurance Agency (Försäkringskassan), which is responsible for granting asset-freezing exemptions for natural persons;
  • the Financial Supervisory Authority (Finansinspektionen), which is the competent authority receiving information concerning frozen accounts and, when applicable, granting exemptions from the prohibition for routine administrative costs; and
  • Swedish Customs (Tullverket), which is responsible for monitoring imports and exports.

The rules on the scope of sanctions criminalisation are the same as for other types of crimes and are set out in Chapter 2 of the Swedish Criminal Code (Brottsbalken), available in English on the government’s website

Sweden does not maintain any unilateral lists of sanctioned persons. The EU sanctions regulations that include such lists are directly applicable in Sweden. UN Security Council sanctions are generally implemented in Swedish law through the sanctions regulations of the EU. However, under the Act on Certain International Sanctions, the Swedish government has a mandate to adopt decrees to implement UN sanctions.

Sweden does not maintain any unilateral comprehensive sanctions or embargoes against other countries or regions. Sweden applies the sanctions adopted by the EU, which are directly applicable.

Sweden does not maintain any other types of sanctions beyond those adopted by the EU.

Sweden does not apply anything similar to US secondary sanctions.

Under Swedish law, criminal acts can be committed by natural persons only. Corporations cannot face criminal liability.

The penalty for an intentional violation by a natural person of a sanctions provision ranges from a low fine to imprisonment of up to four years. If committed with gross negligence, the penalty for a natural person ranges from a low fine to imprisonment for up to six months. However, an indictment for such offences is unlikely to result in penalties more severe than a fine. The criminal provisions are found in the Act on Certain International Sanctions.

In principle, there are no administrative penalties for companies that have transgressed sanctions laws. Nonetheless, under Swedish law, a company may be subject to a corporate fine (Företagsbot), which is technically a specific legal construct, referred to as “a special legal effect of a crime” (särskild rättsverkan av brott). The corporate fine is contingent on the prosecutor being able to prove that a natural person in the company has committed a crime in the exercise of the company’s business activities (näringsverksamhet).

A corporate fine can be issued in relation to all crimes under Swedish law that can be committed in the exercise of a company’s business activities. In general, the corporate fine is tried in the same criminal court procedure as the liability of the company representative or employee that has allegedly committed a criminal act. If the defendant (ie, the accused company representative or employee) is acquitted – for instance, because the prosecutor fails to prove intent or gross negligence – the company would also be cleared, since no prerequisite crime has been committed.

As of 1 January 2020, the cap on corporate fines in Sweden, previously at SEK10 million, increased to SEK500 million.

Sweden has not adopted any unilateral general licences which authorise activities that would be otherwise prohibited under EU sanctions regulations.

The compliance expectations of the responsible Swedish authorities are in line with what follows from official EU guidance documents, such as the EU Best Practices for the effective implementation of restrictive measures.

With regard to standards of liability, please refer to 3.9 Penalties for Violations. As Sweden does not have any administrative penalties for sanctions violations, the standards of liability correspond to those applicable to natural persons under general criminal law (intent or gross negligence by the responsible individual).

Except for the requirements and prohibitions under the EU Blocking Statute, Sweden does not maintain any sanctions-related blocking or reporting requirements.

Provisions on the implementation of the EU Blocking Statute, including provisions on criminal liability, are found in the so-called Act on the EU’s Regulation on Protection against Extraterritorial Legislation Adopted by Third Countries (Lagen (1997:825) om EG:s förordning om Skydd mot Extraterritoriell Lagstiftning som Antas av Tredje Land) and a government decree (1997:83) adopted on the basis of that Act.

Besides the EU Blocking Statute, Sweden does not have any anti-boycott regulations or other restrictions that prohibit adherence to other jurisdictions’ sanctions.

As the sanctions adopted by the EU are directly applicable in Sweden, the extensive EU sanctions adopted during the course of 2022 against Russia, Belarus and the non-government controlled regions of Ukraine (ie, Donetsk, Kherson, Luhansk and Zaporizhzhia) have had a significant impact on Sweden and Swedish economic operators. Several important regulatory developments have taken place within the EU and, consequently, in Sweden. Only a few of them are outlined here. The EU sanctions affect trade, market access, financial transactions, flight services, diplomatic relations and much more.

Among other things, transferring payments to and from Russia (even if the transfer is made between two non-sanctioned parties) has been significantly more difficult due to the extensive sanctions against the Russian financial sector. Certain types of financial transactions are now prohibited altogether, while key Russian banks are removed from the SWIFT messaging system and several Russian banks are subject to asset freezing restrictions.

As a result, many banks have adopted strict internal policies on transactions relating inter alia to Russia , resulting in very strict compliance requirements on the banks’ customers.

Moreover, a large number of products and services are now prohibited from being sold, exported to and/or sourced or imported from Russia, Belarus and the non-government controlled areas of Ukraine, and numerous individuals and companies are subject to asset-freezing restrictions.

In response, Russia has imposed several different countersanctions targeting so-called “unfriendly states”, which make it difficult for Russian companies (including Russian subsidiaries of Swedish companies) and individuals to adhere to, inter alia, EU sanctions.

As a result of the war in Ukraine, new EU sanctions and the Russian countersanctions that followed, many Swedish companies have in practice chosen to suspend or terminate their operations in Russia and have faced both legal and ethical considerations when doing so.

Sweden does not have any unilateral sanctions regimes, and therefore no pending changes are relevant for Sweden in terms of regulation.

Nevertheless, Sweden is a small and export-oriented nation, and new sanctions regimes will at times have a large and sometimes unforeseen impact. In particular the EU’s sanctions against Russia, Belarus and the non-government controlled regions of Ukraine have had significant repercussions on individuals and companies based in Sweden.

Swedish export control laws and regulations include the Military Equipment Act (Krigsmateriellagen (1992:1300)) and the Council Regulation (EC) 2021/821 of 20 May 2021 setting up an EU regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items (the “EU dual-use regulation”). The EU dual-use regulation is complemented in Sweden by the Act on Control of Dual-use Items and Technical Assistance (Lagen (2000:1064) om Kontroll av Produkter med Dubbla Användningsområden och av Tekniskt Bistånd) and the Ordinance on Control of Dual-use Items and Technical Assistance (Förordningen (2000:1217) om Kontroll av Produkter med Dubbla Användningsområden och av Tekniskt Bistånd) (together, the “Swedish dual-use regulations”).

On 1 August 2022, amendments to the Swedish dual-use regulations entered into force. One key take-away from these amendments is that an authorisation requirement was imposed for situations where exporters have grounds to suspect that non-listed items and cybersurveillance items are or may be intended for certain prohibited end-use. See more under 4.12 Key Developments Regarding Exports.

Sweden has not imposed any additional authorisation requirements for the export or transfer of dual-use items, other than those listed in the annexes to the EU dual-use regulation, as provided for in Articles 9 and 11 of the EU dual-use regulation.

The Swedish Military Equipment Act largely corresponds to the EU Common Military List.

The main administrative authority for export controls is the ISP (Inspectorate of Strategic Products). With regard to dual-use controlled encryption, the ISP works together with the National Defence Radio Establishment (Försvarets Radioanstalt, FRA).

For nuclear-related matters, the responsible authority is the Swedish Radiation Safety Authority (Strålsäkerhetsmyndigheten).

The ISP is the authority responsible for enforcing export controls, except for nuclear-related matters, which fall under the competence of the Swedish Radiation Safety Authority. However, if the ISP suspects that actions would constitute criminal acts, the ISP can hand over a case to the Swedish public prosecutor’s office.

Swedish Customs also has certain monitoring and enforcement responsibilities in relation to export controls.

Sweden does not exercise extraterritorial jurisdiction in relation to export control. Swedish laws and regulations are not applicable on re-exportation of Swedish origin items in or between foreign countries.

However, under the EU dual-use regulation, provision of technical assistance related to dual-use items for so-called catch-all use does cover the situation where a natural or legal person resident or established in a member state provides technical assistance to a resident of a third country temporarily present in the EU (see Articles 8 and 4 of the EU dual-use regulation).

In addition, a non-Swedish entity wanting to re-export controlled items procured from Sweden may be prohibited from doing so by virtue of guarantees given in an end-use certificate. Such certificates may, for example, include commitments to obtain written consent from the competent Swedish authority.

Sweden does not maintain any publicly available lists of restricted persons for export control purposes. Nonetheless, the ISP may – on a case-by-case basis – deny export authorisations to specific entities.

Sweden does not maintain any lists of sensitive exports beyond what is set out in EU legislation.

Except for the catch-all provisions in Article 4 and the above-mentioned control of technical assistance in Article 8, as well as the provision for unlisted cybersurveillance items in Article 5, of the EU dual-use regulation, Sweden does not maintain any non-listed export controls.

Under Swedish law, criminal acts can only be committed by natural persons. Corporations cannot face criminal liability (see also 3.9 Penalties for Violations).

The penalty for an intentional violation by a natural person of an export control provision ranges from a low fine to imprisonment for up to six years. If committed with gross negligence, the penalty for a natural person ranges from a low fine to imprisonment for up to two years. However, it is generally unlikely that an indictment for such offences would result in more than a fine.

Sweden has not adopted any unilateral general export licences for dual-use items and relies solely on the general licences set out in the EU dual-use regulation.

With regard to military equipment, there are five general licences available (TFS 2012:7–11). All general licences include conditions – for example, that the exporter already has a manufacturing or supply authorisation from the ISP.

The compliance expectations of the responsible Swedish authorities are in line with what follows from official EU guidance documents, such as Commission Recommendation (EU) 2019/1318 on internal compliance programmes for dual-use trade controls, and the Wassenaar Arrangement (Best Practice documents).

With regard to standards of liability, please refer to 3.9 Penalties for Violations. Since Sweden does not have any administrative penalties for export control violations, the standards of liability are equal to those applicable to natural persons under general criminal law (intent or gross negligence by the responsible individual).

Regardless of whether a violation of export control law is deemed a criminal offence, the competent authority has broad discretion to withdraw or deny export authorisations for companies that have a deficient record with regard to compliance.

In Sweden, there are several reporting requirements relating to the export of dual-use items and military equipment. Such requirements include notifying the ISP on the use of any EU general licence, and annually reporting the total export value of dual-use items to the ISP. It is also common that global and individual export licences include various reporting obligations.

Amendments to Swedish Dual-Use Regulations

As mentioned in 4.1 Export Controls, the Swedish dual-use regulations have recently been amended. One key change is that a lower threshold now applies for so-called catch-all applications, that is, when an operator needs to notify the ISP prior to exporting non-listed dual-use items, as well as when providing technical assistance and brokering services.

According to Articles 4.2 and 5.2 of the EU dual-use regulation, exporters of non-listed dual-use items falling under the catch-all provision and cybersurveillance items are required to notify the ISP if they are aware that these items could be intended for the prohibited end-uses stated in Articles 4 and 5 of the EU dual-use regulation. Following the update of the EU dual-use regulation in September 2021, EU member states were empowered to introduce national legislation imposing authorisation requirements also in situations where exporters have grounds for suspecting that non-listed items and cybersurveillance items are or may be intended for prohibited end-use (see Articles 4.3 and 5.3 of the EU dual-use regulation). Sweden has made use of these rules and lowered the threshold for when exporters must notify the ISP from ‘awareness’ to ‘suspicion’.

Similarly, providers of technical assistance or brokering services that have grounds for suspecting that items, for which they will provide technical assistance or brokering services, are or may be intended, in their entirety or in part, for catch-all-related end-use, must notify the ISP.

Finally, in order to implement the rules that entered into force in September 2021 when the EU dual-use regulation was updated, criminal liability for breaching the new authorisation and notification obligations has been introduced in the Swedish dual-use regulations.

Sweden’s NATO Application

In October 2019, the ISP announced that all export authorisations valid at the time regarding export of military equipment to Turkey had been revoked. From October 2019 until October 2022, although Turkey was not subject to an arms embargo, no new export authorisations had been granted.

On 16 May 2022, the Swedish government decided to apply for membership in NATO, and on 5 July 2022, all NATO member countries signed the Accession Protocol for Sweden. Following this, and with regard to the recent changes in Swedish defence and security policy, the ISP decided to grant an authorisation for follow-on deliveries from the Swedish defence industry to Turkey. The authorisation in question refers to military equipment within the categories ML11 (electronic equipment), ML21 (software) and ML22 (technical assistance).

The government has stated that Swedish NATO membership may change the conditions for export of military equipment and, hence, require amendments to national regulations. Furthermore, Sweden’s Prime Minister and Foreign Minister have both stated that, regardless of whether any changes are made to Sweden’s military equipment regulations, Sweden joining NATO will have effects on the interpretation of these regulations. However, no further details on the nature of the potential changes are available at the time of writing (December 2022).

Apart from the above-mentioned possible changes to Sweden’s regulations concerning military equipment, there are no pending changes to the Swedish export control regulations.

However, a related law, the Protective Security Act, which in many instances targets companies involved in export control, has recently been amended to become stricter. See more under 6.1 Investment Security Mechanisms.

As Sweden is a member of the EU, the European Commission is the authority responsible for investigating dumping claims and imposing trade defence measures.

The EU trade defence regime encompasses three main types of instruments:

  • anti-dumping (Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (the “Anti-Dumping Regulation”)),
  • anti-subsidy (Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (the “Anti-Subsidy Regulation”)), and
  • safeguards (Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries and Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports).

This chapter focuses on anti-dumping and anti-subsidy measures, as safeguard measures are rarely used.

The European Commission monitors measures to ensure these are effective and respected by exporters and importers.

In order for the Commission to ensure the proper enforcement of measures, it is necessary that member states monitor – and report to the Commission on – the import of products subject to investigation or subject to measures, as well as the amount of duties collected under the Anti-Dumping Regulation or the Anti-Subsidy Regulation (“AD/CVD duties”).

In Sweden, Swedish Customs is responsible for monitoring and reporting breaches to the Commission, and collecting AD/CVD duties. In case of a suspected violation of AD/CVD duties, Swedish Customs may conduct inspections, audits or raids at importing companies’ premises. Such cases will often result in parallel legal proceedings – that is, criminal proceedings for natural persons involved and administrative proceedings for the company.

The European Commission opens an investigation after receiving a complaint from the European producers of the product concerned. However, the Commission can also open an investigation on its own initiative.

The European Commission conducts its investigations in accordance with the procedures set out in the Anti-Dumping Regulation and the Anti-Subsidy Regulation.

With regard to reviews of already imposed measures, see 5.9 Frequency of Reviews and 5.10 Review Process.

Following the initiation of an anti-dumping or anti-subsidy investigation, EU producers and all other interested parties (having registered as interested parties within the framework of the investigation) will have an opportunity to participate in the investigation.

Interested parties consist of economic operators which are directly or indirectly affected by the measures. This mainly concerns exporters in the country (or countries) targeted by the investigation, EU producers of the product in question, as well as EU importers and users of the product.

An investigation officially starts with the publication of a notice of initiation published in the Official Journal of the European Union. Following the initiation, known exporters, EU producers and all other interested parties will receive forms or questionnaires to be completed by a specific deadline as indicated in the notice of initiation. In investigations involving many exporters, EU producers, importers or users, sampling will be applied. In practice, this means that companies will be asked to provide relatively limited information on, for example, production volume and turnover, to allow the European Commission to choose a sample that is representative of the category as a whole.

Once a sample has been selected, the sampled companies will receive a questionnaire, which has to be completed within 30 days. Once the European Commission has analysed the questionnaire replies, it may ask companies for additional information.

Normally during the third or fourth month after initiation of the investigation, the Commission conducts verification visits at the premises of sampled companies. The purpose of such visits is to verify the data provided in the questionnaire replies. Provisional anti-dumping duties may be imposed before the investigation has finished, normally within seven months, but at the latest eight months after initiation. Provisional anti-subsidy duties may be imposed within nine months after initiation.

Three weeks before imposing provisional measures, the European Commission will make public on its website its intention whether to impose such measures, so that interested businesses can plan ahead. At the time of the potential publication of the provisional measures, interested parties will also receive the so-called disclosure. The disclosure gives the details of all the facts of the investigation and the detailed calculations for the company concerned. Parties have 15 days to provide comments. Where provisional measures are imposed, they can remain in place for a maximum of six months in cases of anti-dumping duties and four months in cases of anti-subsidy duties before definitive measures are imposed or the investigation is terminated.

Definitive measures are normally imposed at the latest within 14 months (anti-dumping cases) or 13 months (anti-subsidy cases) after the initiation of an investigation. Companies will usually receive the definitive disclosure in the twelfth month after initiation. The definitive disclosure must contain all essential facts that form the basis for the final determinations and the detailed calculations regarding the company concerned. All comments received after the provisional disclosure are analysed and taken into account as appropriate in the definitive findings. Parties have ten days to comment on the definitive disclosure.

The outcome of investigations are published in the Official Journal – for example, as a regulation imposing provisional or definitive anti-dumping/anti-subsidy duties, or terminating the proceeding without duties being imposed.

Further, the European Commission publishes an Annual Report directed to the Council and the European Parliament on the EU’s Anti-Dumping, Anti-Subsidy and Safeguard Activities and the use of trade defence instruments by third countries targeting the EU.

The European Commission may impose anti-dumping/anti-subsidy duties and safeguards on any third country (ie, countries that are not members of the EU).

Anti-dumping and anti-subsidy measures expire automatically after five years, unless it is determined in an expiry review that measures should remain in force. During the final year that measures are in force, the European Commission services publish a notice of impending expiry in the Official Journal, stating that the measures will expire on a given date.

After the European Commission has published the notice and no later than three months before the date of the expiry of measures, EU producers can request an expiry review. The evidence put forward in the request for an expiry review should support allegations of the likelihood of recurrence or continuation of dumping/subsidisation and injury with regard to the imports subject to measures.

If a sufficiently substantiated review request is received, the European Commission publishes a notice of initiation and begins investigating whether dumping/subsidisation and injury is likely to continue or recur. Normally, expiry reviews are completed within 12 months, but they may take up to 15 months. During the investigation, measures remain in force.

Anti-dumping and anti-subsidy measures may also be changed before their expiry, through an interim review. An interim review may be initiated at the request of a member state or, at least one year since the imposition of the measure, by certain importers, exporters or producers.

The European Commission can also initiate an expiry review or interim review on its own initiative.

An expiry review shall be initiated if sufficient evidence shows that the expiry of the measure would likely result in the continuation or recurrence of subsidisation and injury.

An interim review shall be initiated if sufficient evidence shows that a change in circumstances renders the measure unnecessary, excessive or insufficient. For anti-subsidies measures, if the duty imposed is lower than the amount of counteracted subsidies, an interim review may also be initiated if evidence shows that export prices have decreased or the resale price of imported products has not moved sufficiently.

If an interim or expiry review is initiated, the same procedure that is used for new investigations applies. Interim and expiry reviews shall in any event be concluded within 15 months.

An applicant can challenge the validity of an act of the Commission (for instance, a regulation imposing anti-dumping duties) either by (i) filing an action for annulment of an act under Article 263 of the Treaty on the Functioning of the European Union (TFEU), or (ii) in the context of national proceedings, asking an EU member state court to request a preliminary ruling on the validity of an act under Article 267 TFEU.

An action for annulment under Article 263 TFEU is brought by an applicant before the General Court, and a judgment of the General Court can be appealed to the Court of Justice. If successful, the General Court (in first instance) or the Court of Justice (on appeal) annuls the contested act (fully or partially).

A reference for a preliminary ruling under Article 267 TFEU is made by a member state court (usually an administrative court when anti-dumping measures are challenged, to the Court of Justice, in the framework of a national court proceeding. If successful, the Court of Justice invalidates the contested act.

In Sweden, there are on average one to two cases each year involving Swedish Customs bringing cases against importers that have circumvented AD/CVD measures (eg, incorrect classification or origin), that end up in court proceedings. There has not been any high-profile case in Sweden during the past twelve months.

Please refer to 5.12 Key Developments Regarding AD/CVD Measures.

Sweden is one of few EU member states that does not yet have an FDI screening law in place. This is about to change. In 2019, the Swedish government ordered a parliamentary inquiry for the dual purpose of adapting Swedish law to the Council Regulation (EU) 2019/452 of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (the “EU FDI Regulation”) and to introduce a completely new Swedish FDI screening system. The proposal is currently going through the legislative process, including consultation with the Council on Legislation (Lagrådet), and the new law is expected to enter into force in the second half of 2023.

In sum, the main take-aways of the proposal are as follows.

  • All direct investments, regardless of investor nationality, will be subject to notification.
  • A threshold of 10% ownership will apply.
  • All types of essential services will be covered.
  • The competent authority will be the ISP.
  • A two-step screening procedure is foreseen. In the first step, a notification is submitted, and the ISP has 25 business days to decide whether to clear the investment or proceed to further review. The second step provides the ISP with three months to conduct an in-depth investigation into the investment. If special reasons are at hand, this time period may be extended to a maximum of six months (in addition to the initial 25 business days).
  • Failure to notify an investment may lead to the investment being declared null and void, and the investor may be subject to administrative fees. An administrative fee may also be imposed in case of gun-jumping or for the failure to provide required information.

The FDI screening procedure will apply in parallel with other existing legislation, such as the Swedish Protective Security Act. Since 1 January 2021, there is a mandatory consultation requirement before sale of operations, assets or shares in companies that are important for Sweden’s national security, so-called “security-sensitive operations”. The Protective Security Act (Säkerhetsskyddslagen (2018:585)) and its complementing decree (Säkerhetsskyddsförordningen (2018:658)) require an operator that falls under the Protective Security Act to prepare specific security assessments and consult the competent authority before such sales. Thus, businesses falling under both sets of laws (FDI rules and the Protective Security Act) would face a dual approval process.

Furthermore, new amendments to the Protective Security Act entered into force on 1 December 2021, making it more stringent in some respects. The amendments include placing a burden on the operator of a business to report to the relevant authority when it considers the relevant business to be within the scope of the Protective Security Act. Also, sanction fees were introduced and the supervision was broadened to cover companies that have entered into protective security agreements with operators of security-sensitive businesses.

The main relevant government agencies that administer and enforce investment security measures are the ISP, together with the Swedish Security Service (SÄPO), the Armed Forces (Försvarsmakten) and County Administrative Boards (länsstyrelser).

As of 1 December 2021, the supervisory function related to the consultation procedure under the Protective Security Act is split between a number of authorities, each being responsible for different industries and types of security-sensitive activities.

As of today, such reviews are limited to full or partial acquisition of/investments in Swedish companies involved in the manufacturing and/or supply of military equipment and companies dealing with security-sensitive operations in sectors targeted by the Protective Security Act.

For future rules, please refer to the proposed new FDI rules: see 6.1 Investment Security Mechanisms.

Under the Protective Security Act and, indirectly, the Military Equipment Act – through any manufacturing or supply licences granted under that Act – a full or partial acquisition of/investments in a legal entity covered by the scope of the relevant legislation is subject to notification requirements.

For the Protective Security Act, real estate and shares in companies that qualify as “public” companies (usually those traded on a stock exchange) are exempted from the rules in the Protective Security Act.

The failure to conduct a consultation procedure, if required, under the Protective Security Act could amount to the transaction becoming prohibited (ie, null and void), and a sanction fee may also be implemented. See further under 6.9 Pending Changes to Investment Security Measures.

Under the Military Equipment Act, failure to comply with a notification requirement may result in the company losing its manufacturing and/or supply licence with the ISP.

There are no fees associated with the notification obligations following from full or partial acquisition of/investments in a legal entity covered by the scope of relevant legislation described above.

In Sweden, the key development regarding investment security in the prior twelve months mainly relates to the proposal for a new Swedish FDI screening mechanism: see 6.1 Investment Security Mechanisms.

The most significant pending change is the presentation of a proposal for a new FDI screening mechanism in Sweden. The proposal is now going through the consultation process and the new law is expected to enter into force in the second half of 2023.

EU State Aid Rules

The EU state aid rules set the framework for Sweden’s ability to support certain activities with public funds. The EU rules are set out in Articles 107 to 109 of the TFEU and stipulate that state aid is prohibited if it does not comply with certain predetermined exceptions.

The public sector in Sweden may provide subsidies as long as the exceptions to the general prohibition in the Treaty are met. For common categories of state aid recipients, there are guidelines that clarify the rules. For instance, guidelines exist for regional aid and business areas such as research, development and innovation, employment, training, energy and environmental protection.

As a general rule, these support measures must be approved by the European Commission before they can be granted. However, there are a number of exceptions to this rule, primarily found in the Block Exemption Regulations, (EU). Further information about the Block Exemption Regulations is available on a dedicated webpage.

Regional aid

On the basis of Article 107(3)(a) and (c) of the TFEU, the European Commission may consider compatible with the internal market state aid to promote the economic development of certain disadvantaged areas within the European Union. This kind of state aid is known as regional aid.

In Sweden, regional aid is more common within certain areas. For instance, aid is commonly given to regional airports, film production, broadband infrastructure and sports infrastructure.

The State Aid Temporary Framework

The State Aid Temporary Framework was adopted on 19 March 2020 to enable member states to use the full flexibility foreseen under state aid rules to support the economy in the context of the COVID-19 outbreak.

The European Commission declared on 12 May 2022 that the temporary framework for COVID-related state aid will be phased out. Since 30 June 2022, most of the framework no longer applies.

More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the COVID-19 pandemic can be found on the Commission’s website.

Swedish subsidies in light of COVID-19

The COVID-19 pandemic has led Sweden, like many other countries, to grant government support to businesses and certain sectors. More information about COVID-19-related Swedish state aid measures can be found on a dedicated Commission webpage.

Foreign Subsidies Regulation

On 28 November 2022, the European Parliament and the Council adopted the new regulation on foreign subsidies distorting the internal market (FSR). The regulation enters into force on the twentieth day following that of its publication in the Official Journal of the European Union. A majority of the provisions apply from six months after entry into force and the central obligations of prior notification will start applying after nine months.

The FSR complements EU state aid rules by addressing subsidies from third countries (non-EU member states) to undertakings engaged in economic activity within the EU. It also complements the EU’s trade defence measures, which address third country subsidies to production located outside the EU. For these purposes, the FSR establishes three tools:

  • general ex officio review;
  • prior notification in the context of concentrations, if thresholds for EU turnover and the size of foreign contributions are met, or the European Commission utilises its mandate to otherwise request a notification; and
  • prior notification in the context of public procurement, if thresholds for the value of the tender and the size of foreign contributions are met, or the European Commission utilises its mandate to otherwise request a notification.

The review comprises an assessment of whether a foreign subsidy exists, whether it distorts competition on the internal market, and a balancing of its negative and positive effects. Depending on the outcome of the review, the European Commission may decide to impose redressive measures. Failure to comply with redressive measures or other due procedural requirements may entail a fine of up to between 1 and 10% of the aggregated turnover of the undertaking concerned, or a penalty payment of up to 5% of the average daily aggregated turnover. In the case of concentrations, unlawful implementation of the concentration may also entail an order to dissolve the concentration.

Most standards and technical requirements in Sweden correspond to those set out in EU legislation.

The National Board of Trade (Kommerskollegium) is Sweden’s so-called Product Contact Point (PCP). Such contact points exist in all EU countries and in Norway, Iceland and Liechtenstein. Any business can contact the National Board of Trade, which will provide information on what rules apply to a specific product in Sweden within 15 working days. This assistance is free of charge.

Most sanitary and phytosanitary requirements in Sweden correspond to those set out in EU legislation.

As noted above, the National Board of Trade is Sweden’s so-called Product Contact Point (PCP). Any business can contact the National Board of Trade, which will provide information on what rules apply to a specific product in Sweden within 15 working days. This assistance is free of charge.

To the best of the authors’ knowledge, Sweden does not have any competition policies or price controls that appear to be aimed at reducing imports and/or encouraging domestic production.

In this regard, Swedish competition policy corresponds to, and is bound by, EU competition legislation as well as other EU legislation.

The state is a significant owner of enterprises in Sweden. The portfolio of state-owned enterprises includes 43 fully or partially owned enterprises.

Examples of large, fully state-owned enterprises in Sweden include:

  • Systembolaget (the Swedish Alcohol Monopoly), which has a legal monopoly on retail sales of alcohol (for beverages with an alcohol content exceeding 3.5%) – sales to restaurants and the import, export and production of alcohol are not subject to this monopoly;
  • Vattenfall (energy);
  • LKAB (mining and steel production); and
  • SJ (trains).

Companies in Sweden that are partially state-owned include:

  • Telia Company (telecommunications);
  • PostNord (postal and delivery services); and
  • SAS (airlines).

The authors are not aware of any “buy national/local” requirements in government procurement aimed at reducing imports and/or encouraging domestic production.

Geographical protections in Sweden are regulated by, and correspond to, EU legislation.

EU quality policy aims to protect the names of specific products to promote their unique characteristics, linked to their geographical origin as well as traditional know-how.

Products that are under consideration or have been granted geographical indication recognition are listed in quality products registers. Names of products registered as GIs are legally protected against imitation and misuse within the EU and in non-EU countries where a specific protection agreement has been signed.

The EU legislation covers three types of geographical indications:

  • PDO – protected designation of origin (food and wine);
  • PGI – protected geographical indication (food and wine); and
  • GI – geographical indication (spirit drinks and aromatised wines).

An application for protection of a GI in Sweden is submitted to the Swedish Food Agency (Livsmedelsverket). The registration process is covered by a fee, consisting of a basic fee of SEK2,700 and thereafter a running time fee of SEK900 per hour.

If the Swedish Food Agency finds that the requirements in Regulation 1151/2012 are met, the application is registered with the European Commission, which then reviews the application. More information about applying for a GI in Sweden can be found on the Swedish Food Agency’s website

EU and non-EU producers, national authorities and the European Commission can oppose or cancel the registration of a product name under a quality scheme.

As set out above, the adoption of the FSR represents a significant development for EU competition and trade law: see 7.1 Subsidy and Incentive Programmes for Domestic Production (Foreign Subsidies Regulation).

Furthermore, on 14 September 2022, the European Commission published a proposal for a regulation on prohibiting products made with forced labour, applicable to all companies manufacturing, selling and importing forced labour goods within and into the EU. The proposal will now have to be approved by the European Parliament and the Council of the European Union, before it can enter into force.

Mannheimer Swartling Advokatbyrå AB

Norrlandsgatan 21
Box 1711
111 87 Stockholm
Sweden

+46 8 595 060 00

carolina.dacko@msa.se; andreas.johansson@msa.se www.mannheimerswartling.se
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Law and Practice

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Mannheimer Swartling has an extensive international practice, with a strong focus on the Nordic region. The firm employs over 400 lawyers, based in offices in Sweden, Belgium, Singapore and the USA. The firm has considerable experience in trade matters, covering customs, national security and foreign direct investment, trade defence measures and export control and sanctions. The firm regularly handles trade law matters before various authorities, including complex classifications and voluntary disclosures, as well as litigation before Swedish and European courts and arbitration. The trade law team also helps clients with risk assessments, compliance programmes and investigations, and has an extensive network of international trade law professionals in other jurisdictions.

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