On 30 September 2025, the EFTA Court delivered its judgment in Case E-24/24, ESA v Norway (Notified acquisitions of qualifying holdings), an infringement action brought by the EFTA Surveillance Authority (ESA). The case concerned Norway’s alleged failure to comply with provisions of two financial directives: Directive 2013/36/EU on access to the activity of credit institutions and prudential supervision (the Capital Requirements IV Directive), and Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (the Solvency II Directive).
While the Court upheld ESA’s claims on both substantive pleas (finding maximum harmonisation of the provisions in question), the judgment is particularly notable for its procedural implications. In recent cases – Case E-9/23, ESA v Norway (Inpatient treatment), and Case E-13/23, ESA v Norway (Prior authorisation in the financial sector) – the Court had taken a strict approach to ESA’s handling of pre-litigation procedures and the applications before the Court, resulting in the dismissal of both actions.
By contrast, this judgment in Case E-24/24, ESA v Norway (Notified acquisitions of qualifying holdings) clarifies some of the limits of that strictness, while still holding ESA to a high procedural standard.
Background and Facts
ESA brought proceedings against Norway, alleging non-compliance with certain provisions of both Directive 2013/36 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (the Credit Requirements IV Directive), and Directive 2009/138 on the taking-up and pursuit of the business of Insurance and Reinsurance (the Solvency II Directive).
First, ESA was concerned with the alleged incorrect implementation of these directives into the national law of Norway. Specifically, ESA argued that the Financial Institutions Act of Norway introduced additional criteria for assessing acquisitions that went beyond the exhaustive list provided in the directives. In particular, ESA said that the terminology in the national law created ambiguity and allowed for broader assessments than permitted under EEA law.
Second, ESA was concerned administrative practice in Norway. ESA alleged that Norway maintained a system requiring approval for acquisitions of twenty-five percent or more in financial institutions, often rejecting such applications without a proper assessment of suitability. This, ESA argued, contravened the harmonised thresholds and assessment procedures laid out in both directives.
In both pleas, ESA was supported by the Commission.
Judgment of the EFTA Court
On the first plea, the Court concluded that prudential assessments contained in Article 23(1) of the Capital Requirements IV Directive and Article 59(1) of the Solvency II Directive were exhaustive, and that EFTA-EEA states may not provide for any additional criteria. In other words, the provisions in question were maximum harmonisation.
Moreover, further provisions of the two directives restrict opposition to acquisitions solely to the criteria therein, or to cases of incomplete information. Furthermore, additional provisions of the directive further prohibit EFTA-EEA states from imposing more stringent notification or approval requirements.
Given this, and the way the wording of the national law in Norway was worded – giving effect to the directive – the Court found that Norway had failed to fulfil its obligations under various provisions of the two directives.
On the second plea, on substance, the Court examined Norway’s administrative practice of requiring approval for acquisitions of twenty-five percent or more in financial institutions. Norway acknowledged that such a practice existed, and was based on its dispersed ownership policy, which aims to prevent excessive risk-taking and promote financial stability.
However, the Court found that this practice imposed notification and approval thresholds beyond those set out in the two directives. It emphasised that the directives imposed maximum harmonisation here also with set thresholds. Thus, administrative practice of imposing additional notification and approval thresholds by means of conditions in initial authorisations and approvals of acquisitions breached Article 22 of the Capital Requirements IV Directive and Article 57 of the Solvency II Directive.
But beyond finding the two infringements, the judgment can be noted for what the Court said regarding the admissibility of ESA’s second plea. The Court noted that, as it put it, it,
‘drew attention to the fact that although the application [by ESA] seeks a declaration that, as regards maintaining in force the administrative practice at issue, Norway has failed to fulfil its obligations arising from Articles 57, 58 and 59 of Solvency II, the concluding paragraph of the letter of formal notice of 28 September 2022 only refers to a failure to fulfil obligations arising from Articles 57 and 59 of Solvency II. Consequently, the question arises whether the inclusion of Article 58 of Solvency II in the operative part of the reasoned opinion constitutes an impermissible extension of the subject matter set out in the letter of formal notice.’ (para 86).
The Court emphasised the importance of the pre-litigation procedure in ensuring that EFTA-EEA states have a fair opportunity to respond to alleged breaches of EEA law. Recalling its recent case-law on infringement, that the letter of formal notice and the reasoned opinion together define the scope of the dispute, and that this scope cannot be expanded during litigation. That said, it acknowledged that minor discrepancies (e.g., clerical errors) do not automatically render a claim inadmissible, provided they do not alter the substance of the complaint or impair the EFTA-EEA state’s ability to defend itself. The Court stressed that while the operative parts of a letter of formal notice, reasoned opinion, and application should align, exact wording is not required if the subject matter remains consistent.
Therefore, the Court was satisfied that, in this case,
‘It is apparent from the pre-litigation procedure, viewed as a whole, as well as Norway’s response…, that the error in the letter of formal notice constitutes an irrelevant typographical error which did not, as a matter of fact, adversely affect Norway’s rights of defence…. Despite that error, Norway was able to identify ESA’s arguments and to present contrary arguments with respect to the provisions…at issue.’ (para 93, emphasis added).
The Court also took the opportunity to clarify its case-law on admissibility of pleas in infringement proceedings. As it put it,
‘…the statements on admissibility in [Case E-13/23, ESA v Norway (Prior authorisation in the financial sector)], must be read within their context…’ (para 98).
The context for the Court was it was ESA’s responsibility to place before the Court the information needed to enable the Court to establish that the obligation in question had not been fulfilled. As it further noted regarding Case E-13/23, ESA v Norway (Prior authorisation in the financial sector),
‘…when important elements of law are first introduced after the written submissions of the parties to the dispute, it casts doubt on whether the infringement procedure has enabled the [EFTA-]EEA [s]tate to present an effective defence and whether ESA has ensured that the [EFTA-EEA] [s]tate is in a position to fully understand the nature of the alleged breach and thus granted an opportunity to comply with its obligations under EEA law.’ (para 98).
And then came the conclusion on admissibility of the second plea,
‘In this respect, this case is different’ (para 98).
Thus, here in Case E-24/24, ESA v Norway (Notified acquisitions of qualifying holdings), ESA’s second plea was admissible, and well-founded.
Analysis
The Court’s ruling in Case E-24/24, ESA v Norway (Notified acquisitions of qualifying holdings) is noted for its treatment of admissibility of ESA’s application. Indeed, it might even be said that the sigh of relief within ESA could be heard from far away.
While recent judgments delivered earlier in 2025 – Case E-9/23, ESA v Norway (Inpatient treatment), and Case E-13/23, ESA v Norway (Prior authorisation in the financial sector) – had signalled a strict approach to ESA’s pre-litigation procedure, the Court here adopted a more contextual and pragmatic stance, recognising that the EFTA-EEA state in question was still able to defend itself against the pleas put forth by ESA.
That said, the judgment did not turn away from the high standards it imposed on ESA in Case E-9/23, ESA v Norway (Inpatient treatment), and Case E-13/23, ESA v Norway (Prior authorisation in the financial sector). Rather, the Court here ensured that those two prior judgments there were not to be misread in a way that was seen to be a capitulation to the EFTA-EEA states. As was already seen in the oral hearing in Case E-30/24, ESA v Iceland (Pensions and European Aviation Safety Agency), that took place earlier in September 2025, the defending EFTA-EEA state there tried to rely, in part, on the argument that it was unable to fully defend itself. Here in Case E-24/24, ESA v Norway (Notified acquisitions of qualifying holdings), the Court in putting some limits on the possibility of EFTA-EEA states utilising this defence more fully in the future.
This case therefore illustrates the Court’s approach to balancing procedural formality with functionality. By treating ESA’s clerical error as immaterial, the Court signalled that substance will prevail over technicality, where the overall integrity of the process remains intact. This is relevant for complex infringement proceedings (as this one undoubtable was), where minor drafting inconsistencies can arise. Or to put it another way, the Court’s reasoning reinforced the idea that procedural safeguards exist to protect the rights of EFTA-EEA state, but at the same time, should not unnecessary procedural pitfalls for ESA.
If there was any doubt, the Court therefore confirmed it will assess admissibility of ESA’s applications on a case-by-case basis, in light of the overall conduct of the proceedings. In doing so here in these proceedings, the Court vindicated ESA’s position, as well as providing it de facto guidance for future enforcement cases. Again, to the relief of ESA.
Read the judgment
The judgment of the EFTA Court in Case E-24/24, ESA v Norway (Notified acquisitions of qualifying holdings), delivered on 30 September 2025, can be read here.