Sale of Bergen Engines stopped

Government deems transfer to Russian owner a security risk

Bergen Engines

Photo: Håkon Mosvold Larsen / NTB scanpix
Minister of Justice and Public Security Monica Mæland and Minister of Defense Frank Bakke-Jensen met with the press after the notification to Rolls Royce that the sale of Bergen Engines had been stopped.

STAFF COMPILATION

In a royal decree issued on March 26, the Norwegian government has ordered that Rolls Royce stop the sale of Norwegian company Bergen Engines AS to companies within the Transmashholding Group (TMH).

Additionally, a block has been placed of any transfer of shares, assets, property, industrial or technological information or other rights held by Bergen Engines or the company’s subsidiaries to TMH.

This decision is pursuant to the provisions of the Act of June 1, 2018, No. 24 concerning national security as set out in Section 2-5, paragraph 1. The royal decree grants the Minister of Foreign Affairs the authority to make the decision that any export of goods or technology by Bergen Engines or the company’s subsidiaries to Russia, where the end user is in Russia or to other actors domiciled in Russia must be subject to prior approval from the Norwegian Ministry of Foreign Affairs.

On March 18, the government concluded that it had sufficient information in hand to determine that the sale of Bergen Engines to TMH needed to be blocked to ensure that the interests of Norwegian national security were not threatened.

“We believe that it is wholly necessary to prevent the sale of this company to a company controlled from a country that we do not have a security partnership in place with,” said Monica Mæland, Minister of Justice and Public Security.

“This has been a challenging case, but we have engaged in positive dialogue with Rolls Royce throughout this matter,” Mæland said.

The most important factors in the government’s assessment of whether to block the sale are:

  1. The technology in Bergen Engines’s possession and the engines that they manufacture would be of great military strategic significance for Russia, and that it would strengthen Russia’s military capability in a way that is in clear contravention of Norway’s security policy interests, as well as the policy interests of Norway’s allies.
  2. Although these products and technologies are not subject to the export controls in place, Russia has faced significant challenges in gaining access to these since the imposition of tough sanctions against the country in 2014.
  3. The planned acquisition may have resulted in attempts to circumvent export control regulations or Norway’s own restrictive measures directed at Russia in order to gain access by underhand means to knowledge and technology of great military strategic significance to Russia.
  4. The export of technology and engines to Russia would have been in contravention of Norway’s security policy interests, as well as the policy interests of Norway’s allies.

(Source: regjeringen.no)

Russia’s reaction

“This is discouraging news, with flimsy arguments from the Norwegian side,” said the Russian Ministry of Foreign Affairs, after the Norwegian government said no to the acquisition of Bergen Engines.

“The agreement was only commercial. The goal was to bring the Norwegian company Bergen Engines to new markets,” said Maria Zakharova, spokeswoman for the Russian Foreign Ministry, in an official statement.

She pointed out that the engine factory “according to Norwegian regulatory authorities is not subject to Norwegian export restrictions.”

In the statement, which is available on the website of the Russian embassy in Oslo, it is also pointed out that the sales halt, according to the Russian point of view, is part of a number of similar actions in which Norway has blocked Russia.

“In recent years, the Norwegian business community has refrained from implementing new projects with Russian partners, even in domains where there are no sanctions,” said Zakharova.

She further stated that what has happened is “inappropriate political interference in a cooperative effort that is purely business.”

“The comment from the Russian side is as expected,” said defense policy spokesman Hårek Elvenes (H) to NTB.

“Something else would haven been surprising. The Russian company that wanted to buy Bergen Engines has close ties with those in power in the Kremlin. Using the company’s technology for Russian military purposes would be detrimental to allied security interests,” he said.

(NTB / Translated by Lori Ann Reinhall)

This article originally appeared in the April 9, 2021, issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.

The Norwegian American

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