Main Categories of Offences
The former Norwegian Penal Code of 1902 made a distinction between crimes and misdemeanours. In the Norwegian Penal Code of 2005 (the "Penal Code"), all offences are defined as crimes. Offences previously referred to as misdemeanours are, however, now characterised as "offences that cannot result in a penalty of more than one year in prison", to which certain specific rules will apply.
The General Prerequisites of an Offence
There are four general prerequisites to be met for an offence to be punishable:
Attempt and Contribution to Commit an Offence
A person who intentionally commits an offence which may be punishable by imprisonment for a term of one year or more, and performs an action leading directly to its commission, may be penalised for attempt, unless otherwise provided for in the Penal Code.
A person who contributes or attempts to contribute to an offence may also be held liable for contribution to an offence if not otherwise is set out.
A criminal act cannot be punished if an applicable limitation period has lapsed. According to Norwegian law, the statute of limitations for the prosecution of white-collar crime depends on the punishment threatened for the relevant crime. The limitation periods for criminal liability are as set out below, unless otherwise specified in the special provisions of the Penal Code:
In case of criminal liability for a legal entity, the limitation period applicable shall be determined based on the limitation period applicable if the criminal breach was done by an individual. For tax fraud offences, a specific limitation period of ten years has been set out irrespective of the maximum penalty, see the Penal Code Section 381.
Some particularly serious offenses are not subject to limitation, such as war crimes and acts of terrorism.
The Start of the Limitation Period
The main rule is that the limitation period for criminal liability shall be calculated from the day the criminal offence stopped/ceased. This means that in the case of a continuing offence, the limitation period does not start running until the offence has finally ceased.
Also concealed crimes will as a main rule be subject to the standard limitation periods as set out above. However, there are some exemptions from this main rule. One important example is that if criminal liability is contingent upon on a certain arisen effect from the criminal act, or if such an effect has impact on the assessment of the act, the limitation period shall start no earlier than the day the effect has materialised.
Interruption of the Limitation Period
The limitation period is interrupted when a person suspected for an offence is given the status of a person charged for an offence, see Section 82 of the Criminal Procedure Act. If the charge is made by a statement out of court or by issuance of a fine (optional to accept), the limitation period is interrupted when the person charged is notified of such charge.
If the limitation period is interrupted for a person who has acted on behalf of a legal entity, the interruption also applies to the enterprise.
Norwegian Criminal Legislation, including white-collar crime legislation, applies to offences committed in Norway, see the Penal Code Section 4. However, there are several provisions of the Penal Code which claim extraterritorial validity. This depends, in general, on the type of offence and on the domestic connection to Norway.
The Penal Code will apply for offences committed outside of Norway by a Norwegian citizen, by a foreigner with permanent residence in Norway or, in certain conditions, by a Norwegian legal entity. Such offences include white-collar offences taking place outside of Norway, meaning that corruption or influence trading committed by a Norwegian national, by a foreign citizen permanently domiciled in Norway or on behalf of a legal entity registered in Norway, will also be subject to Norwegian jurisdiction and enforceable in Norway.
Pursuant to Section 27 of the Penal Code, a legal entity may be held liable for punishment for an offence, when a penal provision is violated by a person who is considered to have "acted on behalf of" the legal entity. This applies even if no person meets the subjective criteria for being liable for an offence (not acted with intention or negligence) or if the person who committed the offence was not accountable when acting. This means that a company may be held liable even if the prerequisites for personal criminal liability for the individual acting are not met.
Regardless of whether personal criminal liability may be established, the question of whether the legal entity shall be penalised for the offence or not shall be subject to a discretionary assessment based on the criteria set out in Section 28 of the Penal Code. Pursuant to this provision, the court or the prosecuting authority shall decide whether to place corporate criminal liability or not, and take into consideration certain elements as set out in the Penal Code:
Fines are the only applicable criminal sanction to impose be on legal entities. However, the legal entity may in addition also lose its right to operate in Norway (administrative sanction).
Individuals and legal entities may be held liable for the same offense. If it is possible to identify the person(s) who committed the offence, personal criminal liability will usually be imposed in addition to corporate liability. The prosecution authorities or the courts may also choose not to impose criminal liability on a legal entity, even if a person acting on its behalf has violated a penal provision, see Penal Code Section 28.
If both the individual and the company is to be held liable, the totality of the penalty awarded to both, shall be taken into account.
A Successor's Liability for Offences Committed by the Target Company Prior to a Merger or Acquisition
In the context of merger, a successor entity may be held liable for offences committed by the target entity prior to the merger. This based on the principle that the target entity will continue its business as part of the merged entity. In the context of an acquisition of a legal entity, only the target entity may be held liable for the offence. If only the assets of a target company are acquired, the criminal liability will also remain with the target/selling entity.
Victims' Compensation for Loss
Victims of a white-collar offence may claim compensation for their loss on grounds of general tort law. The general conditions for compensation are:
Under Norwegian law, a victim to white-collar offences may not claim punitive damages.
All types of civil disputes and criminal cases will start in the District Courts in first instance, with a right to appeal to the Appeal Courts and to the Supreme Courts in third instance. There are no special courts for white-collar matters and all charges and disputes associated therewith with follow the same rules. This means that all courts have jurisdiction to allocate damages to victims of a white-collar offence.
Class actions are admitted in general, including for white-collar-matters pursuant to the Dispute Act Section 35, provided that certain specified conditions are met. In the Disputes Act Section 35-1, a class action is defined as "an action that is brought by or directed against a class on an identical or substantially similar factual and legal basis, and which is approved by the court as a class action."
The prerequisites for class actions are set out in Section 35-2 of the Disputes Act which provides that a class action can only be brought if:
Note that only persons who could have brought or joined an ordinary action before the Norwegian courts may be class members. There are also further details for the class action set out in said Section 35.
Shift in Focus?
During the latest years the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM) has had a bad track record of failed prosecution in several large, highly profiled cases. This has led to increasing criticism of ØKOKRIM for bad judgment in prioritising cases. The essence of the criticism is that ØKOKRIM has explored the outer limits of what constitutes a crime, rather than focusing on more obvious white-collar offences.
ØKOKRIM has announced that they will strive for continuous improvement, and that they will follow up on the conclusions from the internal and external evaluations following the acquittals in of one of the most controversial matters, the Transocean case. Further, the management of ØKOKRIM has been subject to changes recently. It is difficult to predict what impact this may have on ØKOKRIM's operations, if any, but a possible outcome is that ØKOKRIM will be more careful in the selection of cases to be prosecuted and that more cases will be discontinued on basis of lack of sufficient evidence.
Prioritised White-Collar Offences
In recent months, ØKOKRIM has highlighted two types of economic crimes to be prioritised – fisheries crimes and fraud related to the Norwegian COVID-19 funding schemes for the individuals and enterprises hardest hit by the ongoing pandemic.
The new head of ØKOKRIM, Pål K. Lønseth, has stated that crimes related to the fisheries industry constitute a serious problem and are considered a particular threat within the area of white-collar crime. ØKOKRIM has therefore initiated co-operation with the ministry of fisheries in order to gain further understanding of the challenges and to strengthen the intelligence capacity.
Abuse of the COVID-19 funding scheme is a rather new phenomena. When the COVID-19 pandemic hit Norway in March 2020, the Norwegian government rapidly established several public funding schemes to assist individuals and businesses particularly affected by the pandemic and the restrictive measures in place to stop dissemination of disease. When the measures were invoked, ØKOKRIM predicted that the schemes would give ground for fraud and extensive attempts of abuse, and announced that such fraud and abuse would be prioritised by the prosecution authorities. ØKOKRIM has stuck to their promise and now have several cases of alleged fraud relating to the funding schemes under investigation and prosecution.
ØKOKRIM is both a specialised police agency and a public prosecutors' office, focused on combating economic crime, and has national authority and responsibility for fighting and prosecuting the same. In practice, the local police investigate most economic crimes, often with support from ØKOKRIM, while ØKOKRIM themselves handle the larger, more severe, complex and/or high-profile cases.
Noway has no specialist courts or judges, which means that all courts and all judges are competent in handling and ruling in white-collar crime matters.
The prosecuting authorities, including both the police and ØKOKRIM, have the power to initiate to an investigation of white-collar crime.
Potential criminal matters and suspicious transactions are reported to ØKOKRIM by financial institutions, private companies, individuals, bankruptcy estates, governmental bodies or supervisory agencies such as the Financial Supervisory Authority, the Tax Administration and the Norwegian Gaming Authority. ØKOKRIM decides which matters to investigate further based on internal guidelines and priorities, available resourses, etc.
The investigation shall be unbiased and carried out as soon as possible to ensure that no person or legal entity is exposed to unnecessary suspicion or inconvenience.
The authorities have several available tools to gather information an documentation and information related to white-collar offences.
ØKOKRIM's investigations are often commenced with dawn raids at the offices or other relevant premises of the businesses or individuals subject to suspicion. ØKOKRIM will conduct searches and seize evidence, often by mirroring databases, hard drives, mobile phones and the like. Suspects and witnesses are interviewed, and many cases are also investigated abroad, if relevant.
The main rule is that the court shall decide whether the investigative authorities may dawn raid a company and seize documents. However, there are some exemptions. For example, if there is a risk of evidence being lost while waiting for the court's decision, the investigative authorities may raid a company without the prior permission of the court.
Interviews, Documents and Testimonies
The investigative authorities may demand that a person, eg, an employee or director of the company, meet at the police station in order to clarify whether the person is willing to answer questions. However, the investigative authorities do not have the power to demand a person to answer their questions if they will not do so voluntarily.
Investigative authorities do not have the power to demand that a company under investigation is to disclose documents. However, the court can demand that individuals to disclose relevant documents in their possession, provided that the they are obligated to testify in court.
Internal investigations of alleged criminal offences are not mandatory, but will often be undertaken by large corporations accused of criminal activity. In many cases, internal investigators co-operate with the police and share their material and findings, but they are not under an obligation to do so. Law enforcement authorities and courts may have regard to material unveiled in private investigations, but there are no specific rules as to whether or how enforcement authorities or courts should deal with private investigations.
The Norwegian Bar Association has issued guidelines for internal investigations, but there are no formal regulations governing such investigations. The Bar Association's guidelines include provisions which safeguard the interests of employees and other individuals that may be exposed.
Norway and ØKOKRIM are party to several international co-operations which allow for cross-border assistance and knowledge sharing. The three most prominent co-operations worth mentioning are Interpol, Europol and Eurojust.
Norway is part of the intergovernmental organisation International Criminal Police Organization (Interpol). Interpol is an international network for sharing and accessing information on criminals and crimes via Interpol's databases. Furthermore, Interpol offer investigative support such as forensics, analysis, and assistance in locating fugitives around the world, and supports national efforts in combating crimes across three global areas they consider the most pressing today; terrorism, cybercrime and organised crime.
Even though not being part of the European Union, Norway also has a co-operation agreement with the European Union's law enforcement agency, Europol, which offers similar benefits as Interpol within the European Union and EEA area.
Norway also has a cooperation agreement with the European Union Agency for Criminal Justice Cooperation (Eurojust) which assists prosecutors and other investigators from EU Member States in cases of serious crime where that crime affects two or more Member States, or requires prosecution on common bases.
When Norway receives a request for extradition, the matter is initially handled by the prosecution authorities which conduct the necessary investigations, before the matter is brought before the relevant court. The court will by its ruling decide whether the prerequisites for extradition are fulfilled or not.
If the court concludes that the prerequisites for extradition are fulfilled, the matter is ultimately decided by the Ministry of Justice and Public Security, who has the discretion to reject the request even if the court has concluded that the prerequisites for extradition are fulfilled. This power is, however, seldom made use of in practice. The discretion resting with the said authority is also limited by obligations imposed on Norway under relevant conventions and agreements with foreign states.
Extradition from Norway to foreign states may be authorised for white-collar offences if certain criteria are met. To mention some:
Special rules apply to extradition within the Nordics (Norway, Finland, Iceland, Sweden and Denmark). One of the most fundamental differences is that Norwegian citizens may be extradited to another Nordic country if certain criteria are met.
White-collar crime prosecutions are initiated by either ØKOKRIM, the local police or the Director General of Public Prosecutions.
The prosecution authorities shall only indict an individual or legal entity in case when the prosecutor in charge of the case and based on the investigation, is convinced that the individual or enterprise charged is criminally liable and that this can be proven in court by the available evidence.
Even if the above-mentioned criteria are met, prosecution may be waived provided that such special circumstances exist that the prosecution authorities after and overall assessment finds that there are weighty arguments for not charging the offence the individual person or a company with the white-collar offence. Such waiver of prosecution may also be made conditional upon the person charged not committing any new offence during the probationary period of two years counting from the day the decision to waive the prosecution was made.
Please refer to the Penal Code Section 28, as mentioned in 1.4 Corporate Liability and Personal Liability, which provides for the considerations to be made when deciding whether the legal entity shall be held liable for an offence.
The prosecution authorities may decide withdrawal of charges if the maximum statutory penalty prescribed is imprisonment for a term not exceeding two years, unless public interests requires prosecution.
Furthermore, as mentioned above, prosecution may also in certain circumstances be waived conditionally upon the person or company charged not committing any new offence during the probationary period.
Deferred prosecution agreements or non-prosecution agreements are not used in Norway and there is no regime for plea bargaining. Having said that, when it comes to fines awarded, in practice, the amount of the fine often is discussed between the prosecuting authority and the person or legal entity under prosecution in efforts to explore whether it is possible to establish a level of fine which both the prosecution authorities and the person or legal entity may be willing to accept. If challenged, however, it will ultimately be the court who decide the level of the fine.
Plea bargains are not common in Norway. Negotiations between the defence attorney and the prosecuting authority may occasionally take place, but an agreement on the sentencing is not binding to the court in a potential trial.
Norwegian law recognises several fraud offences. As a starting point these will be applied against individual persons committing such fraud offences. In addition, also a legal entity may be held liable for such criminal offence if a person has acted on behalf of the legal entity as further discussed in 1.4 Corporate Liability and Personal Liability. The following offences are highlighted as the most prominent:
It is set out in the Penal Code Section 371 that it constitute an offence if a person who with intent to obtain an illicit gain for themselves or others i) causes, strengthens or exploits a mistaken belief and thereby deceives someone into doing or omitting to do something by which someone suffers or risks a loss, or ii) makes use of false or incomplete information, modifies data or a computer system, uses a credit or debit card which belongs to another person, or otherwise illicitly affects the result of automated data processing, and thereby causing someone a loss or risk of loss.
The minimum penalty for such offence is a fine, whilst the maximum penalty is imprisonment for up to six years - applicable if the fraud based on an overall assessment is considered aggravated (see Section 372). Both intended fraud and fraud committed by gross negligence, are punishable. As mentioned in 1.4 Corporate Liability and Personal Liability, legal entities will only be held liable for a fine.
The Penal Code Section 375 also includes a special provision for insurance fraud, which is normally sanctioned with imprisonment for up to two years, but for up to six years if the insurance fraud is considered aggravated. On the subjective side, the person acting must act with intention which means that gross negligence is not sufficient for insurance fraud to be punishable.
Misleading and False Company Information
The Penal Code Section 382 states that it constitutes an offence if a person who in an invitation to participate in the founding of or expansion of a private limited liability company, a public limited liability company or another entity with profit purpose, or in connection with an invitation to assume a credit facility towards such a company, provides false or misleading information of significance to the evaluation/assessment of the company.
An offence under this provision may be sanctioned with a fine or imprisonment for up to a maximum of six years. Punishment set depending on whether the offence is considered aggravated. Both intentional and grossly negligent breach of the provision is punishable.
Fraudulent Double Sale
Fraudulent double sale is considered an offence, see the Penal Code Section 385. A penalty of a fine or imprisonment for a term not exceeding two years shall be applied to any person who intentionally inflicts a loss to a person or exposes them to a loss by disposing over an asset, a right or an interest belonging to the other person or exposes another person for a financial loss by disposing over a debt instrument which is wholly or partially redeemed.
Corruption is the main bribery/influence peddling offence in Norway and is governed by the Penal Code which sets out that both acceptance of bribery or benefits and granting of bribery of benefits are offences. The constituent elements for a corruption offence are:
A position or assignment held abroad (outside of Norway) is also covered. The Penal Code does not distinguish between facilitation payments and corruption, meaning that also facilitation payments are considered as criminal offences.
The minimum punishment for corruption is a fine, while the maximum punishment is ten years of imprisonment. The maximum sentence is applicable if the corrupt act is considered aggravated. If not aggravated, the corruption offence can be sentenced with up to three years of prison.
The corruption provision in the Penal Code applies to everyone, including private parties, as well as to national and foreign officials. However, in the assessment of whether the offence shall be considered aggravate, the law specifically give emphasis to whether the corruptive action taken was carried out by or towards a public official or any other person by violating the special trust associated with the position, office or assignment. An important element in this assessment is whether the corruption has led, or could have led, to significant economic benefits for the persons involved.
Trading in Influence
It is set out in the Penal Code Section 389 that trading in influence is a criminal offence. There will be a criminal offence in trading in influence if someone
A person found guilty of trading in influence, may be sanctioned with a fine or imprisonment for up to three years.
Norwegian law does not contain any provision expressly imposing an obligation on enterprises or others to prevent bribery and influence peddling, eg, by maintaining a compliance programme.
However, when considering whether to sanction a company for any corrupt act carried out by a person who was acting on behalf of the it, the Penal Code provides for that the courts should take into account "whether the enterprise could have prevented the offence by use of guidelines, instruction, training, checks or other measures". As part of this consideration, it will have a negative impact on the company if no such guidelines or programmes were in place at the time of the corrupt act.
It is set out in The Norwegian Securities Trading Act that wilful or negligent misuse of inside information shall be sanctioned with a fine or up to six years imprisonment.
The provision governing insider trading (Section 3-3), sets out that "persons possessing inside information may neither directly nor indirectly, for own or third-party account, subscribe, purchase, sell or exchange financial instruments or incite others to carry out such transactions". It is specifically set out that the aforementioned shall only apply to the "misuse" of inside information.
Inside information is defined (Section 3-2) as "any information of a precise nature relating to financial instruments, the issuers thereof or other circumstances which has not been made public and is not commonly known in the market and which is likely to have a significant effect on the price of those financial instruments or of related financial instruments".
Where unlawful gain is obtained by infringement of the insider trading provisions, the party to whom such gain has accrued may be ordered to surrender all or part of it. This also applies where the person to whom the gain accrues is a person other than the infringer. If the gain has accrued to a company which is part of a group, the parent company and the ultimate parent company of the group of which the company is part may be liable for the amount.
The Securities Trading Act Section 3-8 also criminalises intentional or negligent market manipulation. No-one may engage in "market manipulation" related to financial instruments. A breach of this provision shall be sanctioned by a fine or by up to six years imprisonment.
Market manipulation is further defined as:
Where unlawful gain is obtained by the infringement of insider trading provisions, the party to whom such gain has accrued may be ordered to surrender all or part of its gain. This also applies where the person to whom the gain accrues is a person other than the infringer. If the gain has accrued to a legal entity which is part of a group, such party's company's parent company and the ultimate parent company of the group of which the company is part, shall alternatively be liable for the amount.
Illicit Banking and Illicit Conduct of Banking Business
It is set out in the Financial Institutions Act that anyone who which to carry out banking business in Norway needs to obtain a license to do so. Furthermore, the act imposes several other obligations applicable to those who wish to carry out such licensed activity.
Anyone who wilfully or by negligence breaks the provisions of the Financial Institutions Act or orders issued pursuant thereto, may be sanctioned by a fine or, in particularly aggravating circumstances, by imprisonment of up to one year, see Section 22-1 of the said act. This is provided that the offence is not otherwise subject to any more severe penal provision which is applicable for the matter.
The criminal tax fraud provisions are found in the Penal Code, see Section 378 to Section 381. Any person who provides "incorrect or incomplete information" to "a public authority" (typically the tax authorities), or "fails to provide obligatory information", "when he/she realizes or ought to realize that it may lead to tax advantages", may be sanctioned with a fine or with prison for a period of up to a maximum of two years.
If the tax fraud is considered aggravated, however, the prison sentence may be increased to a maximum of six years. In determining whether the tax fraud is aggravated, particular emphasis shall be given to:
Both wilful and grossly negligent tax fraud are considered as offences.
Failure to Comply with the Duty of Disclosure
Furthermore, the Norwegian Tax Payment Act contains a special provision relating to the duty of disclosure of information.
Anyone who wilfully causes or attempts to cause the collection of tax to be obstructed or rendered particularly difficult by omitting to provide information or by providing incorrect information to the tax authorities, shall be sanctioned with a fine or with imprisonment for a period of up to two years. A grossly negligent breach is sanctioned with a fine or with imprisonment for a period of up to one year.
The main offence in relation to financial record-keeping is accounting violation as set out in the Penal Code Section 392.
The provision on accounting violation apply to persons who violate any provisions on bookkeeping, accounting, annual accounts or annual reporting regulated by law or regulations (regardless of which law the provisions are included within). Breaches are sanctioned with fines or imprisonment of up to one year for negligent violations and up to two yeas prisons if the violation was intentional. The maximum penalty increases to a maximum of six years in the case of aggravated violations.
When considering whether a violation is considered "aggravated" the following elements should be taken into consideration:
The accounts will evidence whether transactions are in violation of laws/regulations applicable for accounting/book-keeping, and whether there are punishable actions being performed.
The substantive Norwegian competition rules follows from the Norwegian Competition Act of 2004 and the EEA Agreement. The Norwegian Competition Authority (NCA) enforces both the Act and the relevant provisions of the Agreement. This authority is provided pursuant to the procedural rules set out in the Norwegian Competition Act of 2004 and the EEA Competition Act of 2004 (which ensures dual application of the relevant national and EEA provisions when applicable). Furthermore, the EEA Agreement's competition rules are also enforced by the EFTA Surveillance Authority (ESA) pursuant to that agreement and the EEA Competition Act of 2004.
Consequently, the substantive and procedural national competition rules are, to a large extent, harmonised with the similar provisions provided under EU law. Hence, to establish liability for an offence, the relevant authority must first establish a breach of an applicable provision. Secondly, the authority must demonstrate culpability, ie, intent or negligence, with the entity concerned. In regard to the first point, the main offences relating to cartels and criminal competition law concern:
As for sanctions, both the NCA and ESA may impose structural and behavioural remedies, interim measures, administrative fines (capped at 10% of the relevant undertaking's turnover) and periodic penalty payments on entities responsible for competition infringements. In that regard, it is worth noticing that the Norwegian Supreme Court considers administrative fines pursuant to the National Competition Act of 2004 as a criminal offence pursuant to Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms.
As an alternative to imposing the above-mentioned administrative liability, a breach of certain provisions in the Norwegian Competition Act of 2004 may be considered as a criminal offence, subject to imprisonment of up to six years (when applicable) or criminal fines. Here, the public prosecutor will take lead in the investigation, which will be subject to the Criminal Procedure Act of 1981. This alternative route has, however, not been utilised by the national authority yet.
Unreasonable Trade Practice
Unreasonable trade practice towards consumers is considered the main criminal/administrative offence relating to consumer criminal law. This is a core element of the consumer protection regime adopted. The relevant provision is found in the Marketing Practices Act, which sets out that a person may be sanctioned with a fine and/or imprisonment for up to six months for "misleading" or "aggressive" trading practice towards consumers. Breach is, however, only considered an offence if it consists a material offence, see Section 48, first paragraph.
Trading practice will be considered "misleading" if it contains incorrect information or if it in other ways is fit to mislead the consumer with regards to certain closer specified aspects of the trade.
Furthermore, the trading practice is also considered "misleading" if:
Finally, Section 9 of the said Act further defines when the trade practice is aggressive and thereby deemed as an unreasonable trade. This is the case in situations where harassment, force or improper influence limits the consumers options or actions. The behaviour impacts that the consumer has to make an economic decision they would not normally make.
Hacking (ie, Unauthorised Access)
Forced entry into data systems and access to data systems by unauthorised means( "hacking") is regarded as a criminal offence under Section 204 of the Penal Code. Violations are punishable by fines or imprisonment for a term not exceeding two years.
The serious hindering, without authorisation, by transferring, harming, deleting, deteriorating, altering or inputting information, without authorisation, and which may seriously disrupt or hinder the operation of a data system, is considered a criminal offence under Section 206 of the Penal Code. Denial-of-service attacks and distributed denial-of-service attacks will typically fall within the scope of Section 206. Violations are punishable by fines or imprisonment for a term not exceeding two years.
The unauthorised use of another person’s identity, identity papers, or the unauthorised use of information which may be easily confused with another person’s identity, with the intent of (i) obtaining an unauthorised benefit, or (ii) inflicting a loss on another person, is regarded a criminal offence under Section 202 of the Penal Code. Accordingly, this provision makes phishing a criminal offence. Violations of Section 202 of the Penal Code are punishable by fines or imprisonment for a term not exceeding two years.
Possession or Use of Hardware, Software or Other Tools Used to Commit Cybercrime (eg, Hacking Tools)
The unauthorised production, procurement, sale, use or distribution of (i) a computer password or other data which may give access to a data system or databased information, or (ii) a computer program or device which is suitable for the purpose of committing a criminal offence, with the intent that it be used for the purpose of committing a criminal offence, is punishable by fines or imprisonment for a term not exceeding one year under Section 201 of the Penal Code. Furthermore, the unauthorised procurement or production of a self-spreading data software is also punishable by fines or imprisonment for a term not exceeding one year under Section 201 of the Penal Code.Accordingly, the possession or use of hardware, software or other tools used to commit cybercrime (such as hacking tools) will in certain situations constitute criminal offences in Norway.
Identity Theft or Identity Fraud (eg, in Connection with Access Devices)
As mentioned above, the unauthorised use of another person’s identity, identity papers, or the unauthorised use of information which may be easily confused with another person’s identity, with the intent of (i) obtaining an unauthorised benefit, or (ii) inflicting a loss on another person, is regarded as a criminal offence under Section 202 of the Penal Code. Accordingly, identity theft or identity fraud are regarded as a criminal offences in Norway.
Electronic Theft (eg, Breach of Confidence by a Current or Former Employee, or Criminal Copyright Infringement)
There are no specific cybercrime provisions under Norwegian law penalising electronic theft. The general prohibition against theft under Section 321 of the Penal Code only applies to theft of tangible property, and therefore does not apply to electronic theft. Electronic theft can, however, be penalised as forced entry into data systems and access to data systems by unauthorised means (formally not as theft) under Section 204 of the Penal Code. Violations are punishable by fines or imprisonment for a term not exceeding two years.
Furthermore, both Section 207 and Section 208 of the Penal Code will to a certain extent criminalise electronic theft. Pursuant to Section 207 of the Penal Code, any person who has obtained knowledge or possession of a trade secret in the course of an assignment, honorary post, employment or business relationship, and without authorisation (i) uses the trade secret, or (ii) discloses the trade secret to another person, with the intent of enabling that person to make us of the trade secret, shall be punished with fines or imprisonment for a term not exceeding two years. This also applies to any person who, in the course of an assignment, honorary post, employment or business relationship, has been entrusted with technical specifications, descriptions, recipes, models or similar technical materials, and which unlawfully uses such documentation during the course of their trade.
Norway is obliged under international law to implement the sanctions adopted by the UN Security Council. In addition to this, Norway can choose to align itself with the EU and impose the same restrictive measures after a case-by-case evaluation. However, in practice, the Norwegian regime mainly corresponds to the EU regime.
It is set out in the Norwegian Sanctions Act that any wilful beach of to the Norwegian sanctions in place may be sanctioned with a fine and/or imprisonment for up to three years, whilst negligent breach may be sanctioned with a fine and/or imprisonment for up to six months
There is no stand-alone offence of concealment under Norwegian law. Concealment does however form an element of some white-collar criminal offences. The main offence relating to concealment of a crime is Money Laundering, see 3.13 Money Laundering.
Also contributing/aiding and abetting to a corporate offence, is considered an offence, see Section 15 of the Penal Code. The sanctions are the same as for the principle offence, however, the degree of guilt is considered independently for each individual contributor to an offence, which means that the criminal sanctions imposed will not necessarily be the same for the main offender and the person contributing/aiding and abetting to the offence.
Money laundering is the main offence relating to concealment in our jurisdiction. Pursuant to the Penal Code Section 337, the penalty for money laundering shall be applied to any person who
This means that a person may be held liable for both the predicate offence and the concealment, as long as all prerequisites constituting an offence are fulfilled for both offences.
Money laundering may be sanctioned with a fine or imprisonment for up to two years. However, if the offence is considered aggravated, imprisonment for up to six years may be imposed. In determining whether the money laundering is aggravated, emphasis shall be given to:
Equal to the proceeds is any object, claim or service substituting the proceeds.
Particular Obligations Imposed on Financial Institutions
According to the Norwegian act on the prevention of money laundering (the "AML Act"), reporting entities such as financial institutions are obliged to prevent and report money laundering. The financial institutions are supervised by the Financial Supervisory Authority. The relevant prosecuting unit is ØKOKRIM.
A typical circumstance under which a reporting entity may be held liable for failure to prevent money laundering is where the entity fails to establish sufficient risk-based routines for collecting customer information (known as "Know Your Customer" or "KYC" measures) and/or report suspicious transactions to ØKOKRIM.
The Financial Supervisory Authority may impose coercive fines in order to force compliance with the AML Act, or restrict certain individuals from holding management positions in a reporting entity. ØKOKRIM may impose fines against the reporting entity (or the reporting entity's board members or CEO/ similar positions in cases of intent or gross negligence), for violations of the AML Act.
Board members, managers, employees or others acting on behalf of the legal entity may also be sanctioned with fines for violations of the obligation to investigate and report suspicious transactions in cases of intent or gross negligence. In particularly aggravating circumstances, imprisonment of up to one year may instead be imposed. Further, the AML Act also contain certain specific provisions for physical reporting entities violations of certain AML Act provisions.
The main defence for an individual charged with white-collar offences is that the prosecuting authorities have not been able to prove their guilt beyond any reasonable doubt, which, as mentioned, is the standard of proof for all criminal offences. This means that the judge must be convinced beyond reasonable doubt that all of the constituent elements are present in order for criminal liability to be established. Another line of defence is also to claim that the actions taken indeed not represent a breach of the relevant white-collar offence provisions.
A commonly used first line of defence for corporate enterprises charged with white-collar offences, is to demonstrate that the acting individual(s) was acting as a "rough figure" and not "on behalf of" the enterprise when violating the relevant provision(s).
As mentioned above in 1.2 Statute of Limitations, corporate, liability is not automatically imposed when a penal provision is violated by a person who has acted on behalf of the legal entity. As it is particularly highlighted as relevant whether the enterprise could have prevented the offence by use of guidelines, instruction, training, checks or other measures, the existence of an effective compliance programme is commonly used second line of defence. The argument is then that the legal entity has taken all reasonable actions to prevent the breach by the individual in question.
There are no further exceptions for white-collar offences in Norway.
Self-disclosure, confession/admission, co-operation with the investigators or prosecuting authorities and significant contribution to solving other offences are the main leniency measures in Norway. Self-disclosure or admission of the actions will normally reduce the fine or imprisonment term associated with the crime. If self-disclosure comes early in the investigation with lack of evidence against the person, this will have a very significant impact for the judgement by the court and can typically reduce the penalty by around 30%, always subject to the discretionary assessment by the court.
The Norwegian Working Environment Act (WEA) contains specific provisions relating to whistle blowing/notification.
It is set out in the WEA Sections 2 A-1 and 2 A-2 that an employee has the right to notify "censurable conditions" at the employer's undertaking, and that retaliation against an employee who notifies, or makes known that he will notify, is prohibited. Criminal offences will always be considered as censurable conditions.
Any company that regularly employ a minimum of five employees is obligated to have in place whistle-blowing procedures. The routine must be in writing and as a minimum contain:
If the employee chooses to notify externally to any regulatory authorities or other relevant public authorities, anyone who carries out work or services for the receiving authority has the duty to impede that others become acquainted with the name or other identifying information about the notifying individual.
The prosecuting authorities have the burden of proof in all criminal proceedings in Norway, including in white-collar proceedings.
Standard of Proof
As mentioned in 4.1 Defences, the standard of proof is that guilt has to be proven beyond any reasonable doubt.
Presumption of Innocence
Furthermore, it is a fundamental requirement of due process that anyone is considered not guilty, until the opposite has been proven and finally decided by a competent court.
The penal code contains certain provisions which include guidelines governing the assessment of penalties. As an example, the Penal Code Section 53 sets out that, when assessing, a fine weight shall be given, in addition to such factors that are generally given weight in assessing penalties, to the offender's income, assets, responsibility for dependents, debt burden, and other circumstances affecting financial capacity.
Furthermore, Chapter 14 of the Penal Code contains general rules on determining sanctions, such as provisions on what constitute aggravating circumstances and what constitute mitigating circumstances.
In addition to looking to these mentioned provisions, in practice, the judges usually find guidance in case law/judgements in similar matters. Particularly judgements from the Supreme Court is given emphasis as a guideline for the assessment of penalties.
The Sentencing Process
The sentencing process can be divided into the following phases:
In the investigation phase, the prosecuting authorities will conduct searches, make seizures, interview possible witnesses, etc. There are several possible outcomes of such investigations as the enterprise or individual charged can be indicted, fined without further prosecution (if the fine is approved by the person/entity charged with the fine), or the case can be dropped/discontinued typically based on lack of sufficient evidence for a crime being done.
If the prosecutor in charge is convinced that the individual or legal entity charged is guilty and that this may be proven in court based on the evidence available, a formal indictment may be filed and the court proceedings initiated accordingly.
If an indictment is issued, the case will be heard by the District Court. The District Court verdict can be appealed to the Court of Appeal and then finally to the Supreme Court (the Supreme Court is not allowed to directly decide on the question of whether the charged is guilty or not, but is typically free to decide the penalty determined and the procedural matters). It is further worth mentioning that the Supreme Court only admits a limited number of cases to be heard, following a test of whether the matter is of interest also beyond the specific case at hand.
The final and enforceable judgment can find the defendant not guilty or wholly or partly guilty, punishable by imprisonment (suspended or immediate), fine, confiscation, payment of legal costs and/or loss of rights typically to manage businesses.
As previously mentioned, deferred prosecution agreements, non-prosecution agreements and plea agreements are not used in Norway.
Every year, a considerable number businesses operating in Norway are subjected to governmental audits or inspections due to suspicion of irregularities and financial crime, often with subsequent criminal prosecutions. Several of the cases have an international nexus, either by involving foreign individuals and/or enterprises.
The following will provide an overview of the latest trends and issues that are currently of note in the market, particularly focusing on the types of cases that are currently being prioritised and focused on by the prosecution authorities, and which, therefore, should be known when operating businesses in Norway.
The first section below will give a short summary on the types of cases and crimes the police and prosecuting authorities have focused on in previous years, while the following section will look at the types of crimes the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Norwegian abbreviation ØKOKRIM) has highlighted as priorities today and going forward.
Overview and Statistics
White-collar crimes constitute a limited share of all registered crimes in Norway, but the volume of unrecorded crime within this area is presumed to be substantial. The number of suspicious transactions reported to ØKOKRIM has increased over the last couple of years, a development assumed to be the result of raised awareness and knowledge among not only reporting entities but in society in general.
ØKOKRIM has opened investigations into an increased number of new cases in recent years. Investigations were opened into 15 cases in 2015 and 12 in 2016 and this number rose to 28 cases in 2018 and 30 in 2019. Whether this trend will continue depends on the budgets and priorities within the prosecuting authorities.
Statistics show that a majority of the cases investigated by ØKOKRIM in the last six years concern money laundering, corruption, tax and VAT fraud, customs fraud and securities trading, with increasing attention on money laundering, in particular, in the two last years.
Current Threats and Trends
ØKOKRIM issues a threat assessment every year which serves as a guideline both in prioritising types of crimes to be investigated and prosecuted and in developing methods for prevention and enforcement training.
In the report for 2020, ØKOKRIM identified a number of current key trends, including the pandemic and the accompanying economic uncertainty, globalisation, sustainability and digitalisation, as potential threats for new criminal activity.
In the following, the key issues and findings under each of the above-mentioned threat factors will be summarised.
The COVID-19 pandemic – abuse of public funding schemes
In the first months of 2020, the COVID-19 pandemic hit Norway with great strength, and on 12 March, the Norwegian government effectuated the strictest measures since WWII. The measures were imposed both on individuals and companies in an effort to limit contamination.
The measures included the closing of children centres, schools, universities, events, certain bars and restaurants, gyms, hairdressers, beauty salons and swimming pools, and the cancelling of cultural and sporting events, including social gatherings with more than a limited number of participants. Furthermore, both domestic and international travel was discouraged and people arriving from non-Nordic countries were quarantined for 14 days, irrespective of whether they had symptoms of COVID-19 or not. Those contaminated were required to isolate themselves at home for as long as deemed necessary by qualified medical personnel.
Needless to say, the severe measures had instant and dramatic effects on the Norwegian economy, with some industries, companies and groups, such as the travel industry, restaurants, bars, artists, hairdressers, etc, taking a particularly hard hit and resulting in a large number of layoffs. The government rapidly provided several funding schemes to mitigate the economic effects, including general schemes intended to secure income for workers temporarily laid-off and liquidity for companies that were hit hard, as well as industry-specific measures and guarantee schemes for loans to small and medium-sized businesses. In efforts to ensure that the extraordinary funding was provided when needed, the government implemented simplified, digital application procedures.
Abuse of funding schemes
When ØKOKRIM's threat assessment for 2020 foresaw that abuse of the funding schemes would become a significant issue and challenge, they also expected that the schemes would not only be abused by previous white-collar criminals, but that dire need could lead traditionally compliant entities to abuse it. The threat was identified both based on the general experience that crime usually adapts in times of change or crisis, as well as on intelligence which revealed that the schemes were already being exploiting. As an example, there were several instances of employees being instructed by their employer to work while at the same time receiving unemployment benefits.
As forecast, the abuse of the COVID-19 funding schemes has materialised over the last few months. Statistics from August 2020 show that approximately 17,000 applications for a total of NOK1.3 billion in benefits have been stopped by the automatic control systems of the Tax Authority. Furthermore, 3,700 claims for repayment of a total of NOK189 million have been issued. Furthermore, the Labour and Welfare Administration, which operates the schemes providing compensation for losses of salary, has detected a number of frauds and has, to date, reported 12 offences to the police. The most commonly used method of abuse is to report incorrect information, such as fictitious income or identity.
Due to the above, ØKOKRIM is now giving high priority to cases relating to abuse of the public funding schemes. This includes initiating criminal proceedings concerning lower amounts than are normally been prioritised, in order to demonstrate the accountability of all beneficiaries. Recently, ØKOKRIM announced that they have initiated investigations in a matter of suspected aggregated social security fraud and concealment of the proceeds amounting to approximately NOK4 million, relating to abuse of the COVID-19 funding schemes.
Globalisation and cross-border crime
The globalisation of trade markets not only brings a number of advantages, such as easy access to cheaper goods, commodities, raw materials and services from abroad, and larger markets for the enterprises strong enough to handle increased competition, but also increases the frequency of instances of cross-border crime.
A particular issue of globalisation highlighted by ØKOKRIM is the limited knowledge concerning the large funds that are transferred out of Norway. There is a significant risk that these funds are transferred to support criminal acts, such as terrorism. Financial support for terrorism is a criminal act under Norwegian law, sanctioned with imprisonment of up to ten years. The same applies to anyone who makes banking or other financial services available to persons or enterprises for such transfers.
The fight against terror financing is closely connected to the fight against money laundering, another area of sharp focus in Norway today, both from affected businesses as well as legislators and prosecution authorities.
Reporting entities such as financial institutions are obliged to prevent and report any suspicion of terrorist financing and money laundering, and the procedures to be followed are increasingly strict and subject to further supervision. Reporting entities may be held liable for failure to prevent money laundering, eg, where they have failed to establish sufficient KYC measures or to report suspicious transactions to ØKOKRIM. At the same time, criminals are developing more professional and sophisticated methods for money laundering and for exploiting loop holes in the legislation. Another factor highlighted by ØKOKRIM in the challenges of combating money laundering is that the contributors are rarely exposed when the primary offences are investigated.
White-collar crimes threatening sustainable development
Sustainable development is the overriding goal of most Norwegian policies intended to ensure decent living and working conditions, education, equality, cultural diversity and health services. The Norwegian welfare system guarantees equal access to benefits for all. Most public services are either free or heavily subsidised, and the social security system provides various generous benefits.
Those benefits may be taken for granted by many, but would not be possible without the financing that stems from tax on income, wealth and consumption. By consequence, tax evasion and abuse of public schemes are considered to be threats against the Norwegian welfare system and dealt with accordingly. ØKOKRIM reports that the scope is unknown, but that tax evasion and abuse of public funding schemes cause major losses annually to the Norwegian state.
A recent example is the comprehensive abuse of the government COVID-19 funding schemes established in March when the pandemic hit Norway. ØKOKRIM therefore gives high priority to cases concerning severe tax evasion and similar crimes that are considered to threaten the cornerstones of the social welfare systems.
Virtualisation and digital crimes
Various types of economic crimes executed by use of virtual means have dominated Norwegian media recent years, and this is also a global trend. Several high-profile and sophisticated IT attacks against large enterprises, political parties, the Norwegian parliament and private individuals, as well as mass fraud in the virtual space and a number of cases of abuse of personal information and data and online threats and blackmail, have made virtual economic crime a high priority both for lawmakers and enforcement authorities.
As also stressed by ØKOKRIM, there has been an increase in the use of new technologies to commit or conceal crimes. Both cryptocurrencies and digital payment platforms are expected to be used even more often in the future, as well-suited means to conceal financing of crimes and to launder money. Two prominent cases have been seen in Norway in 2020, in which criminals demanded extortion payments in cryptocurrencies to avoid the risk of being identified.