White-Collar Crime 2021

Last Updated October 21, 2021

Norway

Law and Practice

Authors



Advokatfirmaet Thommessen AS was established in 1856 and is considered to be one of Norway’s leading commercial law firms. The firm has offices in Oslo, Bergen, Stavanger and London, and provides advice to Norwegian and international companies and organisations in both public and private sectors, from SMEs to multinational corporations. With approximately 200 lawyers, Thommessen covers all business-related fields of law. The firm has extensive experience in defending businesses and/or management in cases involving allegations of white-collar crime. Virtually all criminal investigations initiated by the Prosecuting Body handling white-collar crime (ØKOKRIM) have underlying civil law issues. Hence, in addition to criminal law and criminal procedure expertise, an in-depth understanding of the underlying civil law, industry and other relevant circumstances is vital.

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:

  • criminal sanctions may only be imposed if it is authorised by law;
  • there must be no ground for impunity, such as an emergency, self-defence or self-enforcement;
  • the offence must be committed with a necessary subjective element being fulfilled by the offender, which means that relevant act either has to be considered intentional or negligent (depending on which criterion of guilt applies to the specific offence in question); and
  • the offender must be accountable at the time of the act (ie, not under the criminal minimum age of 15 years, not psychotic or mentally disabled, etc).

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 in the Penal Code.

Limitation Periods

A criminal act cannot be punished if the 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:

  • two years when the maximum statutory penalty prescribed is a fine or imprisonment for a term not exceeding one year;
  • five years when the maximum statutory penalty prescribed is imprisonment for a term not exceeding three years;
  • ten years when the maximum statutory penalty prescribed is imprisonment for a term not exceeding ten years;
  • 15 years when the maximum statutory penalty prescribed is imprisonment for a term not exceeding 15 years; and
  • 25 years when the maximum statutory penalty prescribed is imprisonment for a term not exceeding 21 years.

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. 

In cases of criminal liability for a legal entity, the limitation period applicable shall be determined based on the limitation period applicable if the criminal offence was committed by a person.

Some particularly serious offences, such as war crimes and terrorism, are not subject to limitation.

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 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, as a main rule, concealed crimes will 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 of an offence is given the status as charged for the 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 to offences committed outside of Norway by a Norwegian citizen, by a foreigner with permanent residence in Norway or by a legal entity registered in Norway. 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.

Corporate Liability

Pursuant to Section 27 of the Penal Code, a legal entity may be held criminal liable for an offence when a penal provision is violated by a person who is considered to have "acted on behalf of" the legal entity. Previously, legal entities could be held liable on an objective basis as there was no requirement that the subjective criteria for criminal liability was met for the person acting on behalf them (not acting with intention or negligence) or that the person who committed the offence was not accountable when acting. This was, however, changed by a recent ruling by the Supreme Court which concluded that there is an absolute prerequisite for criminal liability and punishment that intention or negligence can be established for the individual(s) who carried out the criminal act.

If criminal intention or negligence is established, the question of whether the legal entity shall be penalised for the offence is subject to a discretionary assessment based on the criterions 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, and take into consideration certain elements as set out in the Penal Code:

  • the preventive effect of the penalty;
  • the severity of the offence, and whether an individual acting has acted with subjective intent or negligence;
  • whether the legal entity could have prevented the offence by use of guidelines, instruction, training, checks or other measures;
  • whether the offence has been committed in order to promote the interests of the legal entity;
  • whether the enterprise has had or could have obtained any advantage by the offence;
  • the financial capacity of the enterprise;
  • whether other sanctions arising from the offence are imposed on the enterprise or a person who has acted on its behalf, including whether a penalty is imposed on any individual person, and;
  • whether agreements with foreign states prescribe the use of enterprise penalties.

A fine is the only applicable criminal sanction to be imposed on legal entities. However, the legal entity may also lose its right to operate in Norway (administrative sanction).

Personal Liability

Individuals and legal entities may be held liable for the same offence. 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 legal entity is to be held liable, the totality of the penalties awarded, 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 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 or the assets of a legal entity, only the target entity may be held liable for the offence.

Victims' Compensation for Loss

Victims of a white-collar offence may claim compensation for their loss based on the principles of general tort law. The general conditions for compensation are:

  • the offence must have resulted in a financial loss;
  • there must be a basis of liability (typically negligence) for a person and/or legal entity; and
  • there must be causation between the financial loss suffered and the action constituting the liability.

Under Norwegian law, a victim of white-collar offences may not claim punitive damages.

All types of civil disputes and criminal cases will start in the District Court in first instance, with a right to appeal to the Court of Appeal and to the Supreme Court in third instance. There are no special courts for white-collar matters and all charges and disputes associated therewith will follow the same rules. This means that all courts have jurisdiction to allocate damages to victims of a white-collar offence.

Class Actions

Class actions are admitted for civil claims for damages and compensation following white-collar crimes pursuant to the Disputes Act Section 35, provided that certain 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 to be permitted are set out in Section 35-2 of the Disputes Act which provides that a class action can only be brought if:

  • several legal persons have claims or obligations for which the factual or legal basis is identical or substantially similar;
  • the claims can be heard by a court with the same composition and principally in accordance with the same procedural rules;
  • class procedure is the most appropriate method of hearing the claims; and
  • it is possible to nominate a class representative to safeguard the rights and obligations of the class in the class action.

Please note that only persons who could have brought or joined an ordinary action before the Norwegian courts may be class members. 

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, high-profile 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.

Following this criticism, 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 one of the most controversial matters, the Transocean case. 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 the basis of lack of sufficient evidence. 

ØKOKRIM has highlighted two types of economic crimes to be prioritised: (i) fisheries crimes and (ii) fraud related to Norwegian COVID-19 funding schemes for the individuals and enterprises hardest hit by the ongoing pandemic.

The 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. Now, approximately one-and-a-half years later, it is clear the ØKOKRIM was correct in their predictions and that ØKOKRIM has stuck to their promise of prioritising these case. As a result, we have already seen several convictions in cases relating to abuse of the COVID-19 funding schemes, in addition to there being several cases of alleged fraud and money laundering relating to the funding schemes under investigation and prosecution.

Another recent development which should be noted is that legal entities may no longer be held criminally liable in Norway based on objective liability. It is set out in the Penal Code Section 27 that an enterprise may be held criminally liable when a penal provision is violated by a person who has acted on behalf of the enterprise even if no specific person meets the subjective requirement of intention or negligence. However, in an award issued in April 2021, the Supreme Court concluded that such objective liability as described in Section 27 would not be in conformity with the punishment term in Article 6 (2) and Article 7 of the ECHR. Legal entities may therefore now only be held criminally liable in instances of negligent or wilful misconduct by one or several persons acting on their behalf.

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 such violations. 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 higher-profile cases.

Norway 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 investigation of white-collar crimes.

Potential criminal matters and suspicious transactions are reported to ØKOKRIM and/or the police 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. The prosecution authorities decide which matters to investigate further based on internal guidelines and priorities, available resources, 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, documentation and information related to white-collar offences.

Dawn Raids

ØKOKRIM's investigations are often commenced by 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 similar. 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 disclose relevant documents in their possession, provided that 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 or suspected 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.

Cross-Border Co-operation

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.

Interpol

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.

Europol

Although not part of the EU, Norway has a co-operation agreement with the EU's law enforcement agency, Europol, which offers similar benefits as Interpol within the EU and EEA area.

Eurojust

Norway also has a co-operation 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.

Extradition

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, which 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. The following should be noted:

  • Norwegian citizens may not be extradited;
  • the offences which gives basis for the request for extradition must be punishable also in Norway, with a possible sentence of a minimum one-year imprisonment;
  • extradition shall not be accepted if it will imply a breach of fundamental humanitarian considerations; and
  • extradition shall only be accepted if there is preponderance of evidence that the person requested to be extradited has committed the offence which gave rise to the request.

Special rules apply to extradition within the Nordic Region (Norway, Finland, Iceland, Sweden and Denmark), such 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 if 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 based on an overall assessment finds that there are weighty arguments for not charging 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 require prosecution.

Furthermore, as mentioned above, prosecution may also in certain circumstances be waived conditionally upon the person or company charged not committing any new offences during the time of probation.

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, but 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.

Fraud

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:

  • 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
  • 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 cause 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.

Insurance Fraud

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 constitute 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. The punishment is 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 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

Corruption is the main bribery/influence peddling offence in Norway and is governed by the Penal Code Section 287 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:

  • that a person, for the benefit of themselves or others "demands, receives or accepts" an "offer of an improper advantage"; or
  • "gives or offers" such an advantage, "in connection" with the conduct of a "position", an "assignment" or similar.

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 maximum punishment is 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 aggravated, the law specifically give emphasis to whether the corrupt act 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:

  • for themselves or others demands, receives or accepts an offer of an improper advantage in return for influencing the conduct of another person's position, or assignment; or
  • gives or offers any person an improper advantage in return for influencing the conduct of another person's position or assignment.

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 – for example, by maintaining a compliance programme.

However, when considering whether to sanction a company for a 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.

Insider Trading

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 imprisonment for up to six years.

The provision governing insider trading (Securities Trading Act 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 in the Securities Trading Act 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.

Market Manipulation

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 imprisonment for up to six years.

Market manipulation is further defined as:

  • transactions or orders to trade which give, or are likely to give, false, incorrect or misleading signals as to the price, supply or demand of financial instruments, or which secure the price of one or several financial instruments at an abnormal or artificial level; it is, however, an exemption if the person(s) who entered into the transactions or issued the orders to trade establish that their reasons for doing so are legitimate and that these transactions or orders to trade conform to conduct accepted by the Financial Supervisory Authority as market practice on the market concerned;
  • transactions entered into or orders to trade given in relation to any form of misleading conduct; or
  • dissemination of information through the media, internet, etc, which gives, or is likely to give, false, incorrect or misleading signals as to financial instruments, including the dissemination of rumours and news, where the person who made the dissemination knew, or should have known, that the information was false, incorrect or misleading.

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 Norwegian Financial Institutions Act that anyone who wish to carry out banking business in Norway needs to obtain a licence 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 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 or she realises or ought to realise that it may lead to tax advantages", may be sanctioned with a fine or with imprisonment for a period of up to 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:

  • whether a considerable amount was involved;
  • whether the fraud was performed in a manner making it difficult to uncover;
  • whether the fraud was performed over multiple occasions or over an extended period, the level of planning and organisation (more professionally performed);
  • whether the offence has included abuse of position or trust; and
  • whether the fraud was performed as part of running a business.

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.

Accounting Violation

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 years of prison 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:

  • whether incorrect or misleading information or an incorrect document was used;
  • whether the violation was committed over a longer period of time;
  • whether the violation was committed by someone in breach of trust accompanying a persons or a company's position or business;
  • whether the violation resulted in a significant economic benefit;
  • the potential risk of significant damage (financial or of other nature); and
  • whether the person/company made it challenging to control the business.

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.

Competition Rules

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:

  • participation in cartels and anti-competitive agreements, such as co-operation on price, market-sharing and exchange of strategic information;
  • abuse of a dominant position, including anti-competitive price discrimination, tying or refusal to supply, predatory pricing and margin squeeze;
  • failure to notify about concentration above the turnover thresholds set out in the National Competition Act or the EEA Agreement, or a breach of the stand-still obligation pursuant to those acts;
  • failure to comply with a decision by the authority, including requests for information; and
  • providing incorrect or incomplete information to the authority.

Sanctions

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 regard to certain closer specified aspects of the trade. 

Furthermore, the trading practice is also considered "misleading" if:

  • information which is essential for the consumer to be able to make an informed economic decision is omitted or concealed, or if such information is presented in an unclear, incomprehensible, ambiguous or unserviceable way; and
  • the trading practice is fit to influence consumers to come to an economic decision which they otherwise would not have come to.

Finally, Section 9 of the said Act 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 (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 up to two years.

Denial-of-Service Attacks

The serious hindering, by transferring, harming, deleting, deteriorating, altering or inputting information, without authorisation, 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 up to two years.

Phishing

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

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 of using it for the purpose of committing a criminal offence, is punishable by fines or imprisonment for up to 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 up to 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

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

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 up to 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 who 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 breach of 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 standalone 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:

  • provides assistance in safeguarding the proceeds of a criminal act for another person by, for example, collecting, storing, concealing, transporting, sending, transferring, converting, disposing of, pawning or investing them; or
  • by converting or transferring assets or by other means conceals or obscures where the proceeds of a criminal act they have personally committed are located or originate from, who controls them, their movements or rights associated with them.

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:

  • the sort of criminal act the proceeds originate from;
  • whether the proceeds the money launderer has dealt with are of considerable value; and
  • whether the offender has laundered money on a regular basis.

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 – that is "know your customer" (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 physically reporting entities' violations of certain AML Act provisions.

Personal Liability

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.

Corporate Liability

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 "rogue employee/servant" 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. It is particularly 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 making a 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 judgment 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:

  • an encouragement to notify about censurable conditions;
  • procedure for notifying; and
  • the employer's case-handling upon receipt, handling and follow-up of the matter.

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 prevent others becoming acquainted with the name of (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. Particularly judgments from the Supreme Court are given emphasis as guidelines for the assessment of penalties. 

The Sentencing Process

The sentencing process can be divided into the following phases:

  • investigation;
  • decision to prosecute;
  • court proceedings; and
  • final and enforceable judgment.

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 committed.

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 particular 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 typical to managing business.

As previously mentioned, deferred prosecution agreements, non-prosecution agreements and plea agreements are not used in Norway.

Advokatfirmaet Thommessen AS

Ruseløkkveien38
Postboks 1484 Vika
NO-0116 Oslo
Norway

+47 23 11 11 11

+47 23 11 10 10

firmapost@thommessen.no www.thommessen.no
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Law and Practice

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Advokatfirmaet Thommessen AS was established in 1856 and is considered to be one of Norway’s leading commercial law firms. The firm has offices in Oslo, Bergen, Stavanger and London, and provides advice to Norwegian and international companies and organisations in both public and private sectors, from SMEs to multinational corporations. With approximately 200 lawyers, Thommessen covers all business-related fields of law. The firm has extensive experience in defending businesses and/or management in cases involving allegations of white-collar crime. Virtually all criminal investigations initiated by the Prosecuting Body handling white-collar crime (ØKOKRIM) have underlying civil law issues. Hence, in addition to criminal law and criminal procedure expertise, an in-depth understanding of the underlying civil law, industry and other relevant circumstances is vital.

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