Sweden, a Member State of the EU, has been a member of the World Trade Organisation since 1995. Like all EU Member States, Sweden is also party to agreements such as the GATT Agreement, GATS Agreement, TRIPS Agreement, the Government Procurement Agreement and the Trade Facilitation Agreement.

As Sweden is an EU Member State, no free trade agreements are independently negotiated. Member States participate in the preparation of trade agreements, while negotiations are conducted by the EU as a whole. Such negotiations are conducted with various countries and regions.

Sweden is obliged to ensure that agreements concluded before joining the EU in 1995 are compatible with EU law, according to Article 351 of the Treaty on the Functioning of the EU (TFEU). However, Sweden did not enter into any significant free trade agreements before 1995. 

As mentioned in 1.1 World Trade Organization Membership or Plurilateral Agreements, Sweden does not enter into trade agreements as a contracting party. However, there are regional arrangements such as the Helsinki Treaty.

The EU is currently negotiating agreements with Thailand, Indonesia, Australia and India, among others. Further, agreements with Chile, Kenya, Mercosur and Mexico are in the process of being adopted or ratified. For further information about this, see the EU chapter of this guide. 

Key developments regarding EU trade policy in the prior 12 months mainly concern the new conditions for trade due to the war in Ukraine, and the related development of the sanctions regime, as well as initiatives regarding geopolitical challenges and sustainable development. In addition, the EU Foreign Subsidies Regulation started to apply on 12 July 2023.

Trade policy developments in the EU for the next 12 months will probably be characterised by the geopolitical situation and the ambition to finalise the ongoing negotiations on trade agreement updates. Concerning new legislation, an EU regulation has been adopted in order to help Member States to protect themselves from economic coercion by third countries. The new legislation, the Anti-Coercion Instrument (ACI), is meant to serve as a deterrent for third countries targeting the EU or its Member States. In addition, the EU Foreign Subsidies Regulation started to apply on 12 July 2023, and we should see the first decisions taken by the European Commission during the coming 12 months as the obligation to file major transactions and public tenders under the Foreign Subsidies Regulation became applicable on 12 October 2023.

Swedish Customs (Tullverket) is the administrative authority governing customs duties, taxes, rules on entry and exit restrictions. Decisions taken by Swedish Customs may be subject to appeal to the administrative courts, the administrative courts of appeal (leave to appeal required) and, in rare cases, to the Supreme Administrative Court.

Further, Swedish Customs also has a designated person on its legal services, mandated by the Swedish Government, known as the Swedish Customs’ General Representative (Allmänna Ombudet), with the power to appeal decisions taken by Swedish Customs concerning customs duties, taxes other than customs duties, interest, customs surcharges and late payment fees, and appeal such decisions.

The National Board of Trade Sweden (Kommerskollegium) decides on applications for duty suspensions and export licenses.

The agency with the primary responsibility for administration and enforcement of customs laws and regulation is Swedish Customs, which may seek assistance from the Police Authority and the Swedish Coast Guard. In case of suspected criminal liability, cases may be referred to public prosecutors.

Swedish businesses may notify the National Board of Trade Sweden about barriers restricting trade in other countries, relating, inter alia, to:

• documentation and labelling of products;
• tariffs;
• taxes and fees;
• burdensome customs procedures;
• import and export bans;
• public procurement; and
• licenses and barriers to services and investment.

The National Board of Trade investigates such matters in collaboration with the Swedish Foreign Ministry, the European Commission, Swedish Embassies and industry groups. For barriers relating to EU’s internal market and Norway, Iceland and Lichtenstein, businesses may also report their inquiry free of charge via the European Commission’s platform Solvit, which, in regards to Sweden, is administered by the National Board of Trade.

In addition, the National Board of Trade offers a one-stop information centre tasked with facilitating trade from developing countries to Sweden, named Open Trade Gate Sweden. Open Trade Gate Sweden offers assistance to exporters in developing countries, collaborates with business support organisations and provides open access market studies and targeted information to exporters.

According to a political agreement between the Swedish government and a party in the Swedish Parliament supporting the governing coalition, Swedish Customs’ area of operation is to be expanded to include fighting organised crime, which according to the government necessitate a review of the authority’s tasks and powers. The full implementation is yet to be disclosed, but according to the Swedish government, the Tax Authority, Enforcement Agency and Swedish Customs have aligned on how to target the financing of organised crime.

One hot topic relates to the modernisation and digitalisation of the customs system at the EU level. On 17 May 2023, the European Commission put forward proposals for an ambitious and comprehensive reform of the EU Customs Union. An EU customs authority and digital customs hub are in the pipeline and Swedish Customs is expected to make significant investments to manage these changes. Another hot topic is the large amount of narcotics seized by Swedish Customs in recent times; the amount of illegal substances seized was twice as much in 2022 (3.7 tonnes) compared to 2021. This has underscored the significance of Swedish Customs’ role in combating organised crime. As a result of all these factors, Swedish Customs’ budget is expected to increase by approximately 13% by 2026.

Sweden does not impose its own sanctions. Instead, it enforces sanctions established by the UN and the EU.

The government, through the Ministry of Foreign Affairs, has the overall responsibility for the administration and implementation of sanctions.

As mentioned in 3.1 Sanctions Regime, Sweden does not impose sanctions on its own but instead imposes sanctions adopted by the UN and the EU. These sanctions become binding pursuant to either the Act on Certain International Sanctions (Lagen (1996:95) om Vissa Internationella Sanktioner), which includes provisions through which EU and UN decisions are incorporated into Swedish law, or pursuant to provisions in EU Treaties, which provide that as soon as a sanctions regulation has been published in the Official Journal it takes immediate effect in all Member States. 

There are a number of government agencies in Sweden that are responsible for overseeing and enforcing sanctions. These are:

• the Swedish Public Prosecutor’s Office (Åklagarmyndigheten), and its branch the National Security Unit, as well as the Swedish Security Service (SÄPO), which investigate sanctions breaches;
• the Inspectorate of Strategic Products (Inspektionen för Strategiska Produkter, ISP), which is tasked with managing export control and sanctions, including granting various export authorisations in relation to dual-use products;
• the National Board of Trade, which processes applications for specific export authorisations and exemptions related to freezing of assets and financial resources for legal entities; it also manages matters under the EU Blocking Statute;
• the Social Insurance Agency (Försäkringskassan), which is responsible for granting exemptions from asset freezes concerning natural persons;
• the Financial Supervisory Authority (Finansinspektionen), which collects information regarding frozen accounts in accordance with companies’ reporting obligations; and
• Swedish Customs, which monitors both imports and exports to ensure compliance with sanctions regulations.

Sanctions breaches in Sweden are a matter of criminal law. Under Swedish law, only natural persons can be subject to criminal liability – ie, legal persons cannot, formally, commit a crime in Sweden. However, legal persons may be subject to corporate fines, as explained in 3.9 Penalties for Violations.

As for the scope of Swedish jurisdiction, there is no extra-territorial application of Swedish law. 

Sweden does not administer a sanctions list of its own. Instead, the Swedish government refers to the consolidated sanctions lists provided by the UN and the EU. Under the Act on Certain International Sanctions, the Swedish government has a mandate from Parliament to adopt decrees to implement UN sanctions.

Sweden only applies the sanctions imposed by the EU, which are directly applicable in Sweden, and the sanctions imposed by the UN, which have to be incorporated into Swedish law if not adopted by the EU as regulations.

Sweden does not apply any other type of sanctions or trade embargoes. Notably, in 2022, the Swedish Dockworkers’ Association imposed a ban blocking vessels sailing from Russia, vessels carrying Russian cargo and vessels operated by Russian interests (as well as vessels flying the Russian flag) from calling at Swedish ports. The ban went further than what the then-applicable sanctions regime provided for and the Swedish Labour Court subsequently held that the ban was unlawful.

Sweden does not impose secondary sanctions – ie, it does not impose prohibitions on transactions that do not involve Swedish jurisdiction. However, the EU’s 11th sanctions package against Russia, issued on 23 June 2023, has, to some extent, a “secondary sanctions effect” by establishing a mechanism to prevent the use of exports to third countries to evade sanctions.

As mentioned in 3.4 Persons Subject to Sanctions Laws and Regulations, under Swedish law, criminal acts can be committed by natural persons only. Corporations (legal persons) 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. The criminal provisions are found in the Act on Certain International Sanctions.

In principle, there are no administrative penalties for companies that have breached 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 under the same criminal court procedure as the liability of a company representative or employee who has allegedly committed a criminal act. A prerequisite for a corporate fine is that a company has failed to take reasonable preventive measures, or that the crime was committed by a person who held a leading position or had a special supervisory or control responsibility in relation to the company. The maximum corporate fine in Sweden is SEK500 million. 

In addition, businesses could also be subject to regulatory penalties by a supervisory authority, for instance the Swedish Financial Supervisory Authority, if a sanctions breach or incident entails a breach of a regulatory obligation (eg, an obligation to have proper procedures in place to mitigate sanctions risks).

Sweden has not adopted any regulations in addition to those adopted by the EU with regard to the possibility of obtaining licenses to authorise otherwise sanctioned actions. 

Sweden expects compliance in line with the guidance documents adopted by the EU, as Swedish authorities have not adopted any guidelines of their own. Further, in case of criminal liability, a person can be held liable under Swedish law on the grounds of intent or gross negligence. There is no liability for complicity.

The EU Blocking Statute, Council Regulation (EC) No 2271/96, applies in Sweden. The aim of the statute is to shield EU individuals and companies from the extra-territorial application of third-country laws. The Blocking Statute has never been applied by Swedish courts.

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

During the past year, the Swedish government has been preparing a legislative proposal on economic sanctions against terrorism. The purpose of the proposal is to fulfil international law obligations arising from UN Security Council resolutions and the requirements of the Financial Action Task Force (FATF) regarding the implementation of the relevant UN resolutions.

As an export-oriented nation with a strong presence in industry and technology, which are areas commonly subject to sanctions, sanctions are expected to have an increasing impact on Sweden and Swedish companies. 

Sweden’s export control regime includes the Military Equipment Act (Lagen (1992:1300) om krigsmateriel), and the Military Equipment Ordinance (Förordningen (1992:1303) om krigsmateriel), which regulate and list products intended for military use, and the EU regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items, which is set out in Regulation (EU) 2021/821 of 20 May 2021(the “EU Dual-Use Regulation”), regulating products designed for civilian use but with a possible military function.

The EU Dual-Use Regulation is complemented by the Swedish 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 (Förordning (2000:1217) om kontroll av produkter med dubbla användningsområden och av tekniskt bistånd).

Notably, the Swedish legislation sets out slightly more stringent provisions than the EU Dual-Use Regulation regarding notice requirements pertaining to dual-use products.

In Sweden, the legal and administrative authority for export controls is primarily the ISP, which controls exports of military equipment and dual-use products. The ISP is organised under the Department for Disarmament and Non-Proliferation within the Swedish Ministry for Foreign Affairs.

While the ISP is the Swedish authority responsible for enforcing export controls (see 4.2 Administrative Authorities for Export Controls), it must also continuously co-ordinate with relevant authorities on issues such as security of supply and sensitive technologies.

The persons or items that are subject to Sweden’s export controls are persons that manufacture, sell, transfer or export products and technology that are classified as dual-use goods or military equipment, or provide software, technology or technical assistance related to such products and technology, as well as those who receive such products and technology from abroad. There is no extra-territorial application of Swedish export control laws.

Sweden does not maintain its own lists of restricted persons for export control purposes, but it applies the EU sanctions regimes that may impose restrictions on certain persons, entities or countries.

Sweden does not list any other sensitive exports in addition to those mentioned in 4.1 Export Controls.

Sweden maintains non-list-based export controls, in particular a general clause (catch-all) mechanism, which allows the ISP to impose export license requirements on non-listed dual-use products and technology that, inter alia, may be intended for use in connection with the production of weapons of mass destruction, military use in a country subject to an arms embargo, or as components of military equipment that have been exported from the EU without a license.

The penalties that can be imposed on natural persons are fines and a prison sentence of up to six years. Further, businesses may also be subject to corporate fines. A prerequisite for a corporate fine is that the trader failed to take reasonable preventive measures, or that the crime was committed by a person who held a leading position or had a special supervisory or control responsibility in relation to the trader. The company fine is a minimum of SEK5,000 and a maximum of SEK10 million, and in severe cases SEK500 million (see 3.9 Penalties for Violations). In addition, the ISP may impose administrative sanctions, such as revoking or suspending export licenses, prohibiting the use of general licenses, or imposing administrative fines (sanktionsavgifter) for certain breaches of reporting or notification obligations.

There are various licenses available that authorise activities otherwise prohibited by Sweden’s export controls, depending on the type, destination and end use of the products and technology. For dual-use goods, an exporter may, for example, apply for individual licenses, or a global license following the adoption of an internal compliance programme. It is also possible to apply for export licenses for products listed as military equipment, in which case information on the agreement with the buyer and details of the end use have to be provided to the ISP.

When it comes to export controls, Sweden expects compliance in line with the guidance documents adopted by the EU. For penalising natural persons, the standards of liability are based on either intent or gross negligence.

There are reporting requirements related to export controls, such as the obligation to declare the value of exported or transferred dual-use or military equipment and technology to the ISP for the purpose of annual fees, the obligation to notify the ISP of the use of EU general licenses for dual-use products and technology, and the obligation to register the transfers of military equipment and technology within the EEA.

Sweden has a pending NATO membership application. It is expected that NATO membership will affect Sweden’s application of export controls. Defence and security policy reasons for allowing exports of military equipment to other NATO members are considered strengthened. For instance, the ISP has authorised the export of products classified as military equipment, as follow-on deliveries, to Turkey. See more here.

In October 2023, Sweden’s application was submitted to the Turkish Parliament. Following its processing by Turkey and Hungary, and upon Sweden’s accession to NATO, the Swedish government has indicated that further changes to export controls may be made.

In addition to the implication of the forthcoming NATO membership, a more stringent application and enforcement of Swedish export control laws is expected. Following reports that Swedish dual-use products have been found in Russia and used by Russian military forces in the war against Ukraine, compliance with sanctions and export control laws has been described as a matter of Swedish national security. This kind of rhetoric was previously unheard of.

Sweden does not impose its own anti-dumping or countervailing duties, as it is a Member State of the EU. Companies wishing to bring complaints concerning dumping and subsidies are referred to the European Commission, which investigates such complaints. Nevertheless, the National Board of Trade can assist companies in Sweden when bringing complaints before the Commission.

The National Board of Trade actively works with AD/CVD by contributing to the preparations of the Ministry of Foreign Affairs ahead of meetings with the EU Committee for Trade Policy Protection Instruments, recommending and analysing the European Commission’s proposals to adopt trade protection measures against imports from third countries. It also carries out advocacy work in relation to EU institutions, other Member States and WTO members with regard to trade policy protection instruments, through investigations and analyses, and it consults with businesses and industry organisations.

The EU trade defence instruments in this field consist of  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 EU (the “Anti-Dumping Regulation”), 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 EU (the “Anti-Subsidy Regulation”), as well as both 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, which deal with safeguard measures.

The primary agency in charge of surveillance and monitoring is the European Commission. However, the Commission is dependent on the Member States for monitoring. In Sweden, Swedish Customs is responsible for reporting breaches and violations to the Commission, and is mandated to conduct raids, inspections and collect AD/CVD duties.

The European Commission may open an investigation after having received a complaint or initiate an investigation on its own initiative.

Companies can petition the European Commission on an ad hoc basis.

Normally, a company has 15-21 days, following the European Commission publishing the initiation of an investigation, to register as an affected party and request the right to receive the special questionnaires that then form the basis of the Commission’s investigation. A concerned party includes any party directly or indirectly affected by the measure in question.

Anti-dumping

One day prior to launching an investigation, the Commission provides a notice of initiation in the Official Journal of the European Union (OJEU), stating which product and which countries are to be examined. It also sets out the rights and obligations of the importers, subcontractors and consumers that are affected by a possible anti-dumping duty.

Following the expiration of the time limit indicated above (see 5.5 Non-domestic Company Participation), and within 30-45 days from the start of the survey, the questionnaires must have been filled out and submitted to the Commission. Subsequently, the Commission’s investigators may visit the company. Only information received according to this procedure is taken into account in the investigation.

No later than nine months after the Commission has initiated the investigation, the Commission must present its preliminary conclusions, in which it may impose provisional anti-dumping duties for a maximum period of six months. Thereafter, all interested parties have 30 days to provide comments on the decision. This may be followed by definitive measures, which remain in force for five years. These are published in the OJEU.

The Council of Ministers (the “Council”) decides on definitive anti-dumping measures, on a proposal from the Commission, no later than 15 months after the investigation was initiated. The decision is published in the OJEU.

The day after publication in the OJEU, the imposition of definitive anti-dumping measures enters into force. During the time the anti-dumping measures are in force, various types of reviews may be carried out. These can affect product scope, the exporters affected and the level of anti-dumping duties.

The anti-dumping measures can be extended for further periods of five years if complaining EU producers submit requests three months before the measures expire and the Commission finds the requests sufficiently substantiated to initiate a review. In the event of a review at the end of the period of application of the measures, the measures are automatically extended for the duration of the investigation, regardless of the outcome of the investigation.

Anti-subsidies

An anti-subsidy complaint is filed with the Commission by or on behalf of EU producers of the product concerned either directly or via the authorities of EU Member State. The Commission examines within 45 days the accuracy and adequacy of the evidence provided to determine whether there is a sufficient basis to justify initiating an investigation.

Where, based on its investigation, the Commission considers that subsidisation causing injury has occurred, anti-subsidy measures may be imposed on imports into the EU of the product concerned. These measures generally take the form of:

• an ad valorem duty: a percentage of the import value of the product concerned;
• specific duties: a fixed value for a certain amount of goods – eg, EUR100 per tonne of a product; or
• a price undertaking: a commitment by an exporter to respect minimum import prices.

Provisional measures, if any, must be imposed no later than nine months after the investigation has begun and may remain in place for a maximum of four months. This may be followed by the imposition of definitive measures, which remain in force for five years. Duties are paid by the importer in the EU and, in Sweden, are collected by Swedish Customs. After five years, the measures lapse unless an expiry review concludes that, if the measures were to expire, subsidisation and material injury would likely continue or recur.

The European Commission and the Council publish their findings in the OJEU, such as regulations imposing provisional or definitive anti-dumping/anti-subsidy duties, or terminating the proceedings without duties being imposed.

The Commission also publishes the Annual Report from the Commission to the European Parliament and the Council on the EU’s Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of Trade Defence Instruments by Third Countries targeting the EU (last published on 6 September 2023).

The EU may in principle impose anti-dumping/anti-subsidy duties and safeguards in relation to all third countries (ie, countries that are not members of the EU). However, trade agreements entered into by the EU may contain deviations in relation thereto – eg, under the EEA Agreement, the use of anti-dumping measures, countervailing duties and measures against illicit commercial practices are excluded in relation to Norway, Iceland and Lichtenstein. Further, under the CETA Agreement between the EU and Canada, a party adopting global safeguard measures shall endeavour to impose them in a way that least affects bilateral trade.

Anti-dumping and anti-subsidy measures expire automatically after five years, unless the European Commission after an expiry review determines that the measures should remain in force. During the final year that measures are in force, the Commission publishes a notice of impending expiry in the OJEU, stating that the measures will expire on a given date, in order for EU producers to request prolongation of the measures.

The European Commission may extend measures for further five-year periods following an expiry review initiated upon the request of EU producers complaining of injury, provided the request is submitted at least three months before the measures expire. In the event of a review at the end of the five-year application period, the measures are automatically extended for the duration of the investigation.

The Commission may also conduct interim reviews in relation to anti-dumping and anti-subsidies measures.

Measures adopted by the Commission may be challenged before the EU Courts – ie, the General Court as first instance and on appeal to the Court of Justice of the European Union, pursuant to Article 263 of the TFEU. Further, a decision by Swedish Customs regarding, for example, a penalty duty, can be appealed to the Administrative Court of Appeal. If so, the appellant (as well as the respondent) may request national authorities to request a preliminary ruling from the Court of Justice of the European Union pursuant to Article 267 of the TFEU.

There are no key developments in law or regulatory activities to report during the last 12 months.

Ex Officio Investigation of BEV From China

On 4 October 2023, the European Commission launched an anti-subsidy investigation into the imports of battery electric vehicles (BEV) from China, which could lead to the imposition of anti-subsidy duties on these imports if they are found to be illegal and harmful to the EU industry. The Commission initiated this investigation on its own initiative (ex officio), without receiving a formal complaint from the EU industry, based on the evidence it has gathered of market distortions and unfair competition caused by the low-priced and subsidised imports of BEV from China. It is very unusual for the Commission to initiate anti-subsidy investigations on its own initiative, without a complaint.

Anti-dumping and Anti-subsidy in Relation to the Wind Power Action Plan

On 24 October 2023, the Commission launched its so-called Wind Power Action Plan (the “Plan”), the objective of which is to ensure a fair and competitive international environment for the EU wind manufacturing industry, which faces increasing pressure from foreign competitors, especially from China. In the Plan, the Commission specifically underlines that it will closely monitor possible unfair trade practices that benefit foreign wind manufacturers, such as subsidisation of wind-related products imported into the EU and invites the EU industry to help out with the monitoring.

If justified, the Commission will activate its trade defence instruments, such as anti-dumping and anti-subsidy measures, to protect the EU market from distortions and injury caused by foreign subsidies or dumping. The Commission also indicates that it will use the measures provided for by the Foreign Subsidies Regulation to address the effects of foreign subsidies that allow, in this context, wind manufacturers (the beneficiaries of these subsidies) to be successful in public procurement procedures or in concentrations involving EU target companies, as well as the measures provided for by the FDI Regulation to address FDI challenges.

The PSA

In 2021, The Swedish Protective Security Act (säkerhetsskyddslagen (2018:585)),PSA) was amended in order to establish a screening system concerning the sale of certain so-called security-sensitive activities. As regards strategic considerations, there is no available guidance that applies to the screening mechanism under the PSA. In addition, any details of such strategic considerations of the authorities would likely be classified.

The PSA refers to “Sweden’s security”, but there is currently no legal definition of this term. In the preparatory works to the PSA (Government Bill 2017/18:89), the Swedish government has stated that the term is intended to cover both external and internal security interests, national sovereignty as well as the internal security of Sweden’s democratic constitution.

In our experience, “straightforward” matters regarding the application of the PSA take about two to three weeks for the supervisory authority to resolve. For more complicated matters we are informed the timeline could be two to three months.

The FDI Act

Sweden has recently enacted a law on screening of foreign direct investments (lagen (2023:560) om granskning av utländska direktinvesteringar) (the “FDI Act”), which is applicable as of 1 December 2023. The act covers investment made by all investors, including Swedish investors and investors from other EU Member States. However, only investments made by an investor from a country outside the EU, and which fall within the scope of the FDI Act may be subject to an examination by the screening authority and a decision to prohibit the investment or to impose conditions (see 6.3 Transactions Subject to Investment Security Measures).

A transaction that falls within the scope of the FDI Act may not be closed without prior written or tacit approval from the ISP. If required for reasons of national security, public order or public safety, a foreign investment may be prohibited by the ISP. If the transaction has already taken place, such prohibition will render the transaction null and void. Where the investment is made in a listed company or in real estate, a prohibition will be combined with an injunction to divest the relevant undertaking or real estate.

The ISP’s decision to prohibit an investment or to impose conditions may be appealed to the Swedish government. Injunctions and administrative fines may be appealed to the Stockholm Administrative Court.

The ISP should decide within 25 days if a more in-depth analysis is necessary following an inquiry. If a more in-depth analysis is required, the time limit is three months, which can be prolonged to six months under specific circumstances.

The FDI Act is administered by the ISP, while the PSA is administered by 13 different supervisory authorities, including the Swedish Transport Agency, the state-owned enterprise Affärsverket, Svenska Kraftnät, the Swedish Post and Telecom Authority, the Swedish Defence Materiel Administration, the Swedish Energy Agency, the Swedish Radiation Authority, and four different County Administrative Boards.

The PSA

Transactions involving “security-sensitive activities” are subject to filing requirements according to the PSA. However, the legislation lacks a detailed definition of what constitutes a “security-sensitive activity”.  Pursuant to the PSA, security-sensitive activities are either (i) activities of importance for Sweden’s security; or (ii) activities that are covered by an “international protective security commitment that is binding for Sweden”. An international protective security commitment refers to Sweden’s commitments to other States or organisations, for example protection of airplanes and of information exchanged within the framework of military co-operation, or ship and port facility security.

As regards activities that are considered security-sensitive based on their importance for Sweden’s security, the first part of the assessment concerns whether the activity affects Swedish national security, including external and internal security interests as well as nationally important societal functions. According to the preparatory works to the PSA, only activities that have a qualified need for protection should be covered by the scope of the PSA.

According to the preparatory works to the PSA, activities within the following sectors may be considered security sensitive:

• military activities;
• essential services – eg, services related to electricity supply, electronic communication, key civil infrastructure, food and water supply, the financial sector, healthcare, emergency services and transportation;
• damage-generating activities – eg, nuclear activities, microbiological laboratories, dams, and industrial activities handling explosives and toxic materials in large quantities;
• the handling of so-called security classified information; and
• any other innovations or products that are of key importance to a security-sensitive activity.

The FDI Act

The FDI Act applies to investments in target companies that conduct activities eligible for protection. Activities within the following sectors shall be considered eligible for protection:

• essential services (samhällsviktig verksamhet), including critical infrastructure;
• security-sensitive activities (säkerhetskänslig verksamhet) in accordance with the PSA;
• prospecting, extracting, enriching or selling of critical raw materials, metals or minerals;
• processing of sensitive personal data or location data in or through goods or services;
• manufacturing, developing or supplying military equipment, conducting research relating to military equipment, or providing technical support for military equipment;
• manufacturing, developing or supplying dual-use items, conducting research relating to dual-use items, or providing technical support for such items; and
• researching or supplying products or methods relating to emerging technologies or other strategic technologies eligible for protection, or activities capable of manufacturing or developing such products or methods.

The FDI Act will apply to investments resulting in the investor acquiring (directly or indirectly) voting rights equal to or exceeding 10, 20, 30, 50, 65 or 90% in a target company performing activities eligible for protection, influence over the management of such target company through other means, or assets or business eligible for protection. No turnover or deal value thresholds apply. Specific thresholds apply to investments in other legal entities (eg, limited partnerships or trusts) and to greenfield investments. Certain types of issuances of new shares are exempted.

A peculiarity of the Swedish FDI Act which seems to distinguish it from similar legislation in other Member States is that it also applies to investors from Sweden and other EU Member States. However, only investments made by an investor from a country outside the EU may be subject to a substantive examination by the screening authority and a decision to prohibit the investment or to impose conditions.

The PSA

If a transaction falls within the scope of the PSA, it is subject to a mandatory screening system and the relevant supervisory authority’s approval of the transaction prior to closing (see 6.2 Agencies Enforcing Investment Security Measures). The obligation to notify a contemplated transaction lies with the seller.

The FDI Act

Under the FDI Act, investments that meet the thresholds and the conditions of the screening mechanism are subject to a mandatory notification obligation (see 6.2 Agencies Enforcing Investment Security Measures). The notification obligation lies with the investor. Approval of the transaction is necessary prior to closing.

Under the PSA, real estate and shares in companies that qualify as “public” companies (in principle, those traded on a stock exchange), as well as indirect acquisitions – ie, the acquisition of the parent company of a company carrying out security sensitive activities, are exempted from the rules in the Protective Security Act.

For the FDI Act, rights issues are exempted.

The PSA

The supervisory authority may impose an administrative fine if the requirements applicable to a transfer of security-sensitive activities have not been complied with, including failure to comply with the obligation to consult with the supervisory authority, as well as a transfer in violation of a prohibition, or if incorrect information has been provided during the consultation procedure. Such a fine shall be set at a minimum of SEK25,000 and a maximum of SEK50 million. To our knowledge, no administrative fine for a breach of the standstill obligation has so far been imposed. Further, should an investment fall foul of the provisions of the PSA, the supervising authority may declare the transaction invalid.

The FDI Act

Under the FDI Act, a breach of the standstill obligation can result in a fine, which shall be set at a minimum of SEK25,000 and a maximum of SEK100 million. At the time of writing, the FDI Act is not yet applicable and hence, the standstill obligation has not been enforced. Further, an investment falling foul of the provisions of the FDI Act may be declared invalid by the ISP.

There are no fees associated with investment security reviews or filings.

The key development is the FDI Act, which is applicable as of 1 December 2023 (see 6.1 Investment Security Mechanisms).

On 2 November 2023, the Swedish government, through an ordinance, appointed the ISP as the review authority under the FDI Act. At the same time, it identified the Swedish Civil Contingencies Agency (Myndigheten för samhällsskydd och beredskap), which previously drafted regulation in relation to the notification of foreign direct investments in “essential services”, as one of the authorities that will co-operate with ISP in these reviews. The two annexes to the ordinance further specify the scope of the FDI Act in relation to emerging technologies and other strategically important technologies, as well as critical raw materials, metals and minerals.

As a member of the EU, Sweden abides by the EU State aid rules, mainly set out in the Treaty on the Functioning of the European Union and is thus only allowed to provide subsidies that comply with those rules and have been approved by the Commission before being implemented.

For further information, see the EU chapter of this guide. 

In Sweden, standards and technical requirements comply with EU law.

For further information, see the EU chapter of this guide. 

Sanitary and phytosanitary requirements in Sweden relating to national production and to imports comply with EU sanitary and phytosanitary legislation.

For further information, see the EU chapter of this guide. 

Sweden does not have any competition policies or price controls that are aimed at reducing imports and/or encouraging domestic production.

In Sweden, the state and the municipalities play a significant role as owners of undertakings. Among these, large fully state-owned enterprises include Systembolaget, the sole retailer in Sweden permitted to sell alcoholic beverages over 3.5% ABV to consumers. Other prominent fully state-owned companies encompass Vattenfall, in the energy sector, LKAB, which provides mining and steel production, and the railway operator SJ. In addition to these, there are also major companies in which the state holds partial ownership, such as the Telia Company in the telecommunications field and PostNord, which handles postal and delivery services. None of the state-owned enterprises, the majority of which operate on liberalised markets and thus have to comply with the same rules as their private competitors, are aimed at reducing imports and/or encouraging domestic production.

There are no applicable “buy local” requirements in Sweden.

In Sweden, the rules applying to geographical indication protection are governed by and aligned with EU regulations. The Swedish Food Agency maintains a registry of quality products, listing those that are currently under review or have already achieved geographical indication status. Once a product is given a geographical indication, its name is legally protected against potential imitation or misuse, not just within the EU, but also in third countries with which the EU has agreements containing relevant protection provisions.

An interesting development in the harmonisation of export control rules occurred on the 26 October 2023, when the European Commission published its first compilation of EU Member States’ national export control lists. This will enable co-ordinated export controls at the EU level when it comes to sensitive technologies that are not covered by multilateral agreements. The publication opens the door for Member States to co-ordinate their export control actions and will be updated whenever Member States notify new or amended national export control measures to the Commission.