2 Correspondence. By letter of 12 January 20154, the Norwegian Government submitted its reply to the Authority's letter of 25 November 2014.

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1 Brussels, 8 July 2015 Case No: Document No: Norwegian Ministry of Agriculture and Food Postboks 8007 Dep N Oslo Norway Dear Sir or Madam, Subject: Letter of formal notice to Norway concerning the use of the Nyt Norge ("Enjoy Norway") brand Introduction By a letter dated 25 November 2Ol4t, the EFTA Surveillance Authority ("the Authority") informed the Norwegian Government that it had opened an own initiative case regarding the brand Nyt Norge and its potential infringernent of the EEA Agreement. The Authority has assessed the information provided by the Norwegian Government and has reached the conclusion that the use of the Nyt Norge brand infringes Article 1 I of the EEA Agreement insofar as it applies to products within the scope of the EEA Agreement. 2 Correspondence By the abovementioned letter of 25 November 2014, the Authority requested Norway to provide information as to the Nyt Norge brand. By letter of 3 Decemb er 2014,2 the Norwegian Government requested an extension of the deadline to reply until 19 January 2015, which was granted by the Authority by letter of 3 December By letter of 12 January 20154, the Norwegian Government submitted its reply to the Authority's letter of 25 November On 25 February 2}l5s, the Authority's Internal Market Affairs Directorate addressed a Prearticle 31 letter to the Norwegian Government. I Document No Document No Document No a Document No Document No Rue Belliard 35, B-1040 Brussels, tel: (+32X0)2 286 l8 I l, fax: (+32X0)2 286 l8 00,

2 Page2 By letter of 16 March 20156, the Norwegian Government requested an extension of the deadlinetoreplytothepre-article3l letteruntil30april2015.byletterof 18Marchz}t57, the Authority granted the requested extension of the deadline to reply. The Norwegian Government's reply to the Pre-article 31 letter was submitted to the Authority on 30 April Relevant national framework According to information provided by the Norwegian Government in its reply to the Authority dated l2 January (point 6) and to the information available on the website Nyt Norge is a brand which aims to promote the sale of food products with Norwegian origin by encouraging consumers to choose such products.e Information provided bythe Norwegian Government in its replyto the Authority of 30 April 2015 shows that //yl Norge is used for 2,214 different products of which 137 fall within the EEA Agreement.lo The Nyt Norge brand is run by the foundation Matmerk that has been set up by the Norwegian Ministry of Agriculture and Food, and which has received its start-up capital from the Ministry, cf. Article 4 of Matmerft s Articles of associationlr. Similarly, a major part of Matmerk's working capital is provided by the Norwegian Ministry of Agriculture and Food, cf. Matmerk's annual reports and the Norwegian Government's reply to the Authority dated 12 January As for the Nyt Norge brand in particular, almost TOYo of the funding is provided by government interventi on, i.e. by way of mandatory levy on the farmers and by direct funding from the Norwegian Government, cf, page 2 (point 7) of the Norwegian Govlrnment's reply to the Authority dated 12 January 2015.In 2015, the public funding amounts to 10 mill. NOK, cf, the Norwegian Government's reply to the Authority dated 30 April Matmerk is an independent foundation. However, the Norwegian Ministry of Agriculture and Food exercises control over the use of the public funds contributed through an annual allotment letter, through yearly reports and through semiannual meetings with Matmerk, cf. the Norwegian Government's reply to the Authority dated 12 January iol5 (point 3). Additionally, through ministerial representation on the election committee, the Norwegian Ministry of Agriculture and Food is involved in the election of Matmerk's board of directors, cf. Article 6(3) of Matmerk's Articles of association. 4 Relevant EEA law 6 Document No Document No Document No l. e See e.g. r0 See the appendix "Products allowed to use the "tlyt Norge" brand, March 20t3* submitted with the Norwegian Government's reply of 30 April It Publicly available on v vw.matmerk.no/cms/files/5 l7lvedt kter-matmerk.pdf. 12 Publicly available orr http,/ir,.nr*.*ut*".kr..

3 Page 3 Article 8 of the EEA Agreement reads: "Article 8 1. Free movement of goods between the Contracting Parties shall be established in conformity with the provisions of this Agreement. 2. (Jnless otherwise specified, Articles l0 to 15, 19,20 and 25 to 27 shall npply only to products originating in the Contracting Parties. 3. (Jnless otherwise specified, the provisions of this Agreement shall apply only to: (a) productsfatlingwithin Chapters 25 to 97 of the Harmonized Commodity Description and Coding System, excluding the products listed in Protocol 2; (b) products specified in Protocol 3, subject to the specdic arrangements set out in that Protocol." Article 11 of the EEA Agreement reads: "Article I l Quantitative restrictions on imports and all measures having equivalent e.ffect shall be prohibited between the Contacting Parties." 5 The Authority's assessment ln its correspondence with the Authority, the Norwegian Government has, in essence, put forward two reasons why it considers that Nyt Norge does not infringe Article 1 1 of the EEA Agreement. Firstly, the Norwegian Government has submitted that Nyt Norge falls outside the scope of the EEA Agreement, and secondly that Nyt Norge is considered justified as the EU has launched an - allegedly - similar initiative called "Enioy! It's from Europe". The Authority will consider each of these reasons below, however, as a starting point it shall be considered why a promotional campaign such as Nyt Norge potentially comes within the ambit of Article 1l of the EEA Agreement. 5.1 Nyt Norge constitutes a measure having equivalent effect to quantitative restrictions It is recalled that measures which encourage the purchase of domestic products are considered measures having equivalent effect to quantitative restrictions and come, therefore, within the ambit of Article I 1 of the EEA Agreement, provided that the measures are attributable to the State, cf. established case law of the Court of Justice of the Eyropean Union ("the CJEU"). To this effect, the Authority refers to the cases "Buy lrish- t3, Apple and Pear Development Councilla and "Markenqualittit" s. The Authority considers that Nyt Norge's characteristics are essentially similar to the UK Appte and Pear Development Council which had been established by the UK Government witfr tfre dual purpose of promoting the sale and purchase of domestic apples and pears and the improvement of these products. The board members of the Apple and Pear Development t3 Commission v lreland ("Buy lrish"), Case 249l8l,EU:C:1982:402. ta Apple and Pear Development Council v K.J. Lewis Ltd and others, Case , EU:C:1983:370. ts Commission v Germany ("Markenqualitiit"), Case C-325l00, EU:C:2002:633'

4 Page 4 Council were appointed by the Govemfiient, and the Council's activities were financed through a statutory levy imposed on producers of the said products. In its judgment, the CJEU held that "1...f a body such as the Development Council, which is set up by the government of a Member State and is financed by a charge imposed on growers, cannot under Community law enjoy the same freedom as regards the methods of advertising used as th.at enjoyed by producers themselves or producer's associations o.f a v o luntary c haract er." l 6 Additionally, the CJEU established that such a body cannot lawfully promote the purchase of domestic products: "In particular, such a body is under a duty not to engage in any advertising intended to discourage the purchase o.f products o.f'other Member States or to disparage those products in the eyes oj'the consumers. Nor must it advise consumers to purchase domestic products solely by reason of their national origin."tt (emphasis added) In view of the fact that Nyt Norge has been created by a foundation set up, financed and to some extent controlled by the Norwegian Ministry of Agriculture and Food, and additionally that the Ministry provides funding directly for Nyt Norge, it is the Authority's assessment that Nyt Norge is attributable to the Norwegian State and as it aims to promote domestic products, constitutes a measure having equivalent effect to quantitative restrictions in accordance with Article 1l of the EEA Agreement. 5.2 Nyt Norge comes within the scope of the EEA Agreement In its reply of 12 January 2015, the Norwegian Government recalled that Article 8 of the EEA Agreement provides that agricultural products are not covered by the EEA Agreement and submitted that Nyt Norge is "nearly exclusively used for agricultural products outsicle the scope of the EEA Agreement"tB.ln view of this, the Norwegian Government contended that Nyt Norge falls outside the scope of the EEA Agreement and thus does not violate Article l1 of that Agreement. Moreover, in its reply of 30 April 2015, the Norwegian Government submitted information demonstrating that in total the Nyt Norge brand is applied to 2,214 products of which only i.e. 6.20/o - fall within the scope of the EEA Agreement pursuant to Article 8 (3, point b) of the EEA Agreement.re In terms of funding, the Norwegian Government held that as merely 6.2%o of the products using the Nyt Norge brand fall within the EEA Agreement, only the amount of 620,000 NOK - and not the total 10 mill. NOK - should be considered relevant for the assessment of whether Nyt Norge infringes Article l l of the EEA Agreement.2o Additionally, the Norwegian Govemment informed the Authority that public funding for Nyt Norge will be reduced successively to 8 mill. NOK in As to prbli" funding oi Uyt 16 Para. l7 of the Apple and Pear Development Council case. r7 Para. l8 of the Apple and Pear Development Council case. r8 Page 4 of the Norwegian Government's reply. le See appendix to the Norwegian Governmeni's reply of 30 April 2Ol5: "products allowed to use the.,nyt Norge " brand, March 201 3". 20 Page 2 of the Norwegian Government's reply dated 30 April 2015.

5 Page 5 Norge after 20l7,the Norwegian Government stated that it will be reviewing the level of budget support, and that it is the intention to reduce public funding for Nyt Norge.2l The Authority does not agree with the Norwegian Government as to whether Nyt Norge infringes Article 1l of the EEA Agreement. As emphasised in the Pre-article 3l letter, the Authority considers that Nyr Norge infringes Article I I of the EEA Agreement, despite the fact that only a limited part of the products under the Nyt Norge brand fall inside the scope of the EEA Agreement. In this regard, it is recalled that Article 11 of the EEA Agreement is not subject to a de minimis rule, cf. established case law of the CJEU. For instance, in the Bluhme case22 the CJEU rejected the argument that a ban on keeping other species of bees than the so-called "L&sa brown bee" on the very small Danish island "L&,ss" did not fall under Article 34 TFEU (which corresponds to Article 11 of the EEA Agreement) because the ban only applied to O.3o/o of the Danish territory.23 Another clear illustration as to the lack of a de minimis rule is provided by the judgment in Commission v France which concerned an administrative practice entailing a prior authorisation procedure for the importation of medicinal products. According to the French Government, only 1% of the cases fell within the scope of the EU rules, since the remaining 99 oh of the cases concerned purely internal situations. Nonetheless, the CJEU considered the French administrative practice an infringement of Article 34 TFEU.24 As regards Nyt Norge, insofar as the 137 products covered by the EEA Agreement are concerned, the fact of the matter remains that the brand constifutes a directly discriminatory measure protecting Norwegian products against products from other EEA States, which infringes Article 11 of the EEA Agreement. The Authority takes note ofthe Norwegian Government's intention to reduce public funding for Nyt Norge in the future, however, the Authority considers this irrelevant fortwo different reasons. Firstly, because the future public funding of Nyt Norge does not have any impact on whether Norway is currently infringing Article 1l of the EEA Agreement and secondly, because no binding decision seems to have been taken in this respect. 5.3 The EU campaign "Enjoy! it's from Europe" does not justify Norway's infringement of the EEA Agreement In its reply of 30 April 2015, the Norwegian Government holds that the aim of Nyt Norge is comparable to that of the EU campaign "Enjoy! It's from Eltrope",zs as both aim to support the internal agricultural production in Norway and the EU respectively. The Norweglan Govemment has not submitted any arguments as to why in terms of substance, Nyt Norge and"enjoy! It's from Europe" are comparable. 2t lbid. 22 Judgment n Bluhme, Case C-67197, EU:C:1998: C ommis s ion v F rqnc e, Case C , EU:C :2005 :3 I 3. 2a See paras. l5 and 16 of Case C s *Enioy! It'sfrom Europe" is a new promotion regime under EU's Common Agricultural Policy. For more information see e.g. en.htm.

6 Page 6 The Authority points out that in contrast to Nyt Norge, "Enjoy! It's from Europe" is not created by one Contracting Party that seeks to promote domestic products only. Instead "Enjoy! It'sfrom Europe" is created at EU level and promotes products from all EU Member States on a collective basis. Hence, under "Enjoy! It's fi"om Europe" no EU Member State is allowed to participate in the promotion of domestic products to the detriment of products originating from other Member States. Allowing EEA States to promote domestic products onlywould, fundamentally, run counter to the principles upon which the intemal market is based such as non-discrimination between domestic products and products originating from other States that are part of the internal market. Therefore, it is the Authority's assessment that Nyt Norge and "Enjoy! It's from Europe" are not comparable. Even if "Enjoy! It's from Europe" were to be considered an infringement of the EEA Agreement, this would not allow Norway to have recourse to a similar infringement of the EEA Agreement. It follows from established case law that EEA States cannot justiff infringements by invoking a similar infringement made by other EEA States.26 Conclusion Accordingly, as its information presently stands, the Authority must conclude that, by maintaining in force a national promotional measure such as "Nyt Norge " which constitutes a measure having equivalent effect to quantitative restrictions, Norway is in breach of Article 1 I of the EEA Agreement insofar as products covered by the EEA Agreement are concerned. In these circumstances, and acting under Article 31 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court ofjustice, the Authority requests that the Norwegian Government submits its observations on the content of this letter within tw'o months of its receipt. After the time limit has expired, the Authority will consider, in the light of any observations received from the Norwegian Government, whether to deliver a reasoned opinion in accordance with Article 3l of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice. For the EFTA Surveillance Authority '' 26 See the judgment of the EFTA Court, Case E-l/03, EFTA Suneillance Authority v The Republic of Icelarrd, [2003] EFTA Ct. Rep. 143, para.32. and the judgment of the CJEU in Commission v United Kingdom, Case C , EU:C: I 99 I :294, para.41.