BALTIC MONITOR

Date: 28 December 2019

New legislation in Finland will stop the Russian expansion?

Since January 1, 2020, foreigners from outside the EU living in Finland have to get permission from the Finnish authorities to buy real assets. This is a part of the new legislation adopted yet in March 2019. Restrictions in the real estate transactions are the reaction of Finland to multiple purchases of parcels and properties often located in strategically important places in the country by Russians.

SOURCE: WIKIPEDIA.ORG

New legislation concerns real properties located all over Finland, except for Åland Islands. The law is applicable to transactions made after January 1, 2020. What is important in the character of the Finnish real estate market, there is no need to apply for permission to buy shares in housing associations. Regulations do not apply to citizens and legal subjects from the EU and the European Economic Area (EEA) and people with dual nationality when one of the countries is a member state of the EU or EEA. In the case of co-partnerships when at least one of the owners does not have an EU or EEA passport the permission is required. Application forms for the purchase of real assets have to be submitted electronically in the Ministry of Defence. Application for the permission entails a small payment. Forms have to be filled in Finnish or Swedish and the ministry has up to three months to reply. According to Matias Warsta from the Ministry of Defence of Finland “regulations were introduced to defend the national security”. – The security situation in the Baltic region has deteriorated in the last decade. We wanted to create a system which would allow us to monitor and control transactions in the Finnish real estate market and help to safeguard national interests of the state security – Warsta said.

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The report of the SUPO counterintelligence from 2016 showed that since the beginning of the previous decade, Russians have been systematically buying properties near Finnish strategic assets such as refineries, factories, ports and military bases. Russians were even buying parcels close to schools which are gathering points for reservists (the Finnish Army is based on the universal military service). The public debate about the purchase of real assets in Finland intensified in 2018 after the big operation of the police on the islands near Turku – it concerned the company controlled by Russians which was active in the real assets market and was suspected of money laundering. In the years 2007-2014, Airiston Helmi company bought several real properties on the islands located in strategic points along sea routes to Turku and nearby communication cables.

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