Sweden’s first FDI fine for failed notification upheld: key takeaways

In a recent ruling, the Administrative Court in Stockholm upheld the decision by the Inspectorate of Strategic Products (the “ISP”) to impose a fine of SEK 200 000 (approx. EUR 20 000) on Ramsbury Invest AB for failing to notify an investment in due time. This marks the first court decision concerning an administrative fine under the Swedish Screening of Foreign Direct Investments Act (2023:560) (the “FDI Act”), which entered into force on 1 December 2023. In this blog post, we comment on the key points of the court’s judgment and discuss its broader implications.

Background to the FDI Act

Under the FDI Act, any investment that confers certain levels of influence over a Swedish entity engaged in protected activities must be notified in advance to the ISP. Failure to submit a notification in time may result in an administrative fine. Once a filing has been made a standstill obligation applies not to implement the investment. Whether a fine is imposed, and the amount thereof, depends on the specific circumstances of the case. The fine may range from a minimum of SEK 25 000 (approx. EUR 2500) to a maximum of SEK 100 million (approx. EUR 10 million). Please read our previous blog posts on the Swedish FDI Act here (about the legislation as such prior to its entry into force), here (about an expanded scope of the Act) and here (“one year with the Swedish FDI-regime”).

The ISP’s decision

As previously reported in a blog post on 10 January 2025, the Swedish company Ramsbury Invest AB (the majority shareholder of the H&M Group) became the first entity to be sanctioned under the FDI Act. The company had carried out an investment that triggered a mandatory notification requirement under the FDI Act but submitted the notification to the ISP two months after the investment had been completed. According to the investor, the delay was due to insufficient information from the target and a misunderstanding of how the FDI Act applies. Once the company became aware of the mistake, it promptly submitted the required notification. As the investment itself was not considered to pose a threat to Sweden’s security or public order, the investigation was closed in phase-1 without further action. However, the company had failed to comply with the standstill obligation. The ISP stated that the fining system under the FDI Act is based on strict liability, arguing that a fine may be imposed regardless of whether the infringement was intentional or due to negligence. In this case, the ISP found no indication that the infringement had posed any risk to national security or public order, and therefore considered the breach non-serious. Taking into account the unintentional nature of the breach and the company’s prompt corrective action, the ISP imposed a relatively low fine of SEK 200 000 (approx. EUR 20 000) – well below the statutory maximum. Ramsbury appealed the decision to the Administrative Court in Stockholm.

The Administrative Court’s decision

In its judgment dated 8 May 2025, the Administrative Court upheld the ISP’s decision, confirming the fine imposed on Ramsbury Invest. While the court’s overall assessment aligned with the ISP’s conclusions, it provided some clarifications and corrections to the authority’s reasoning.

For example, the ISP considered the harm caused to the regulatory system by failure to notify as an aggravating factor when determining whether to impose a fine. The court disagreed with this approach, emphasizing that failure to notify an investment is a prerequisite for imposing a fine under the FDI Act, and cannot simultaneously serve as an aggravating factor in that assessment.

The ISP also argued that the investor could have taken additional measures once it became aware of its obligation to notify, which the authority viewed as an aggravating factor when deciding whether to impose a fine. However, the court found that this argumentation lacked evidentiary support, as the ISP had not presented sufficient evidence in the case file to substantiate this claim.

Thus, the court found that two of the aggravating circumstances raised by the ISP lacked merit. While the court acknowledged the presence of several important mitigating factors, and a few, less significant, aggravating ones, it emphasised that the starting point under the FDI Act is that an administrative fine should be imposed when the substantive conditions are met. On that basis, the court concluded that the imposition of a fine on the investor was warranted.

Regarding the size of the fine, the ISP had taken the company’s financial position into account in its assessment. This despite the preparatory works to the FDI Act indicating that the fines should not be determined based on the company’s turnover. The court however confirmed the ISP’s reasoning, arguing that the preparatory works also emphasize that the fine should be high enough to avoid being perceived merely as a cost of doing business, particularly in light of the company’s financial resources. In this case, the court found the company’s resources to be considerable, with a reported turnover of SEK 8 billion (approx. EUR 800 million) in 2023 and the investment amounting to SEK 100 million (approx. EUR 10 million). The court concluded that the size of the fine imposed by the ISP was reasonable and proportionate.

Finally, under the FDI Act, an administrative fine may be waived if the breach is minor or excusable, or if imposing the fine would otherwise be unreasonable. The court found no such grounds in this case. The Court noted that the company had not been sanctioned under any other regulatory framework for the same conduct, that the circumstances were not beyond the company’s control, and that a lack of knowledge of the applicable rules could not serve as a valid excuse. The court therefore found no basis to waive the fine. Ultimately, it upheld the fine imposed by the ISP.

Concluding remarks

The first ruling under the FDI Act confirms the ISP’s strict approach to the Swedish FDI regime and highlights the importance of maintaining strict compliance with the regulatory requirements and also that the first instance court agrees in this regard. The court’s ruling shows that the company’s financial resources should be taken into regard when determining a fine but also that a proportionality assessment needs to be carried out. Now it remains to be seen whether the judgment will be appealed (within three weeks from the date of the judgment). The case also confirms that fines may be imposed regardless of actual harm or intent.

Companies are advised to carefully consider whether a notification is required when planning an investment or merger. This applies to all investors, including Swedish and EU investors. The Delphi team has extensive experience with FDI-related matters and is happy to assist companies in navigating the FDI screening process.