Corruption in Finland

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Finland's overall corruption is relatively low, according to public opinion and global indexes and standards. The 2022 Corruption Perceptions Index released by Transparency International scored Finland at 87 on a scale from 0 ("highly corrupt") to 100 ("very clean"). When ranked by score, Finland shared second place with New Zealand among the 180 countries in the Index, where the country or countries ranked first are perceived to have the most honest public sector. [1] For comparison, the best score was 90 (ranked 1), the worst score was 12 (ranked 180) and the average was 43. [2]

Contents

According to a 2013 Transparency International survey, an overwhelming majority of people in Finland do not witness cases of corruption by public officials or institutions in their lifetime. [3] Existing corruption tends to be structural, arising from a network of wealthy individuals who favor each other in business; private companies have no disclosure requirements. The few instances of corruption involving the government include decision-making in state investments, [4] political donations, and election funding. Non-traditional types of corruption in Finland (common globally) include tax evasion, gifts, hospitality, and conflicts of interest. [5]

Agreements

Finland signed in 2002 European Council GRECO criminal law against bribery. Finland demanded two exceptions in bribery law that have been signed e.g. in neighbour lands Estonia and Sweden. In May 2019 exception were still not taken in force in Finnish criminal law against bribery. [6]

Forms

Elections

A 2008 Transparency International report noted a remarkable lack of transparency in Finnish political finance, [7] reinforcing demands for greater transparency; in 2007, the Groupe d'États Contre la Corruption (GRECO) stressed that corruption should be better noticed in election financing. [8] The 2007 Finnish campaign finance scandal erupted the following spring, with nine government ministers and several members of parliament lacking transparency in their election-funding reports. Since the law had no penalties for false fund reporting by elected politicians, the conservative National Coalition Party and rural Centre Party have not demanded the resignations of the convicted politicians. According to the 2009 Act on Candidate Election Funding, presidential candidates, parliamentarians, and deputies must declare all funding for an election campaign; donors of over €1,500 must be named. [9]

Public-sector jobs

Two-thirds of state and municipal public servants are appointed from political parties, of which only five percent of Finnish citizens are members. Article 6 of the constitution of Finland states that everyone has an equal right to public jobs, and selection should be based on capability and expertise. The number of political appointments of public servants has been criticized as excessive, [10] and the parties determine public-sector salaries.

Tax avoidance

Prime Minister Jyrki Katainen claimed to fight unreported employment or undeclared employment income but, according to Markku Hirvonen, resources and initiatives in Finland have been insufficient to reach this goal. Two hundred tax officers examined tax havens in Sweden in 2013; 100 officers worked in Denmark, 80 in Norway, and 10–20 in Finland. Although investigations of unreported employment income found Sweden €100 million in previously-unpaid taxes, Finland found none. In Sweden, unlike Finland, all international transactions above 150,000 Swedish kronor (about €15,000) are required to be reported to tax officers. [11]

According to Taloussanomat , Finland loses €320 million in annual taxes to tax havens. [12] The business watchdog organization Finnwatch reported that Finnish companies, including the nation's top 20 companies, have 438 subsidiaries in countries classified as tax havens. [13]

Germany bought LGT Bank data from Heinrich Kieber in 2008. According to the data, about 20 Finns evaded taxes amounting to €50-60 million; this was the country's largest known tax avoidance case. All names have been kept secret, and authorities have been criticized for not doing enough to prosecute tax evaders. [14] [15]

Foreign accounts are legal if taxes are paid. Based on this data, the unpaid taxes on the accounts amounted to more than €10 million in 2013. According to a 21 September 2013 Helsingin Sanomat article, Liechtenstein banks held funds from Casimir Ehrnrooth (UPM). Ehrnrooth's family owns majority shares in companies such as YIT, Jaakko Pöyry, Guggenheim Helsinki Plan and Bertel Paulig, and owns a construction company in Turku. [16] Jorma Ollila and Kari Stadigh also have investments in Luxembourg. [17]

In Finland, total collected annual taxes are €65 billion and the annual fiscal deficit is estimated at €4.6 to €7.7 billion. Unlike Sweden, the country has not fully determined how the tax gap should be assessed. According to Parliamentary Audit Committee chairperson Tuija Brax, "Sweden has been actively addressing this tax gap problem for some time". [18]

Finnish tax authorities began investigating holdings in Liechtenstein in 2008, and 17 Finns paid additional taxes totaling €10 million. Taxpayers made reclamation in Administrative Court. The amount of unpaid taxes is estimated to be high, and decisions of this court are not made public. In two cases shown to reporters, the Administrative Court imposed a payment of about one percent (which conflicts with Tax Administration rules). The court's justification for a very low tax is unknown. In one case, funds sheltered from taxation amounted to €483,000 and the additional tax was €4,350. This extra taxation is paid as interest on the original amount. According to the Supreme Administrative Court of Finland, no other legal procedures are possible when collecting the hidden tax and its one-percent interest rate. Tax officers are untrained in legal issues. [19]

Money laundering

The Helsinki District Court dropped charges in October 2019 in suspected €135 million money laundering case through Finnish construction company bank accounts. [20]

Construction

Finnish police investigated financial irregularities of the Youth Foundation. In 2018, foundation chair Perttu Nousiainen received hundreds of thousands of euros from tax-haven firms into his personal accounts. Police suspect the building firm's managers of aggravated tax fraud and other offenses. The trust connected to the Youth Foundation funded Centre Party politicians, in conflict with the law. [21] [22] [23]

An audit was conducted in 2012 of a Helsinki construction office, based on corruption concerns. The business works with YIT. [24] Six people were arrested in May 2012 by an order from Helsinki District Court, investigating corruption in Helsinki building contracts. The detainees were suspected of accepting bribes. The public HKR-Rakennuttaja purchased services from the construction sector with a value of up to about €100 million per year. Fines may reach about €100,000 over several years. [25] Destia, a state-owned company which builds public roads, was investigated for alleged irregularities in January 2013. [26]

Former Espoo mayor Marketta Kokkonen and Olavi Louko, director of Espoo's Technical and Environment Services since 2001, were charged with bribery linked to major construction companies in 2010. [27] [28] Bribes were said to be paid from 2004 to 2008. The state ordered Louko to pay a fine of €7,500 . [29] On the Espoo board of directors, some Finns voted no confidence in Louko [30] [31]

In a Parliamentary Ombudsman investigation released in May 2013, Maija Saxlin said that museum director Janne Gallen-Kallela-Sirén was biased in his position on the Guggenheim Helsinki Plan. [32] According to Carl Gustaf Ehrnrooth, major owner of construction companies (including YIT and Pöyry), Gallen-Kallela-Sirén made the proposal for the Guggenheim museum; he was a board member of a company majority-owned by C–G Ehrnrooth, and his wife also worked for the company. [33] [34] When tax havens were criticised and Casimir Ehrnrooth's accounts made public, Helsinki politicians accepted a tax-haven-funded project. The 2007 Finnish campaign finance scandal bribery sentences were overturned in the Helsinki Court of Appeals in late June 2013. [35]

In 2013, former Vantaa mayor Jukka Peltomäki was accused of receiving €500,000 from Forma Futura from 2006 to 2011. Forma Futura had planned buildings for VVO, NCC, YIT and Citycon. [36] [37] [38] [39]

Olkiluoto nuclear plant

The Olkiluoto nuclear plant construction project has been accused of grey work; it was impossible to check foreign workers' employment documentation without prior notice. Controllers and police had no unannounced access to the area. After notice, employment circumstances were often changed; foreign workers often left the country before a criminal case was evaluated. The workforce was fluid, and employees were not registered for tax or other official registers. [40]

Youth Foundation

There are several criminal investigations going on regarding transactions done by Youth Foundation, or Nuorisosäätiö in Finnish, since 2014 ongoing in 2018. Youth Foundation rents apartments for young adults in Finland. Youth Foundation have had close links to Centre Party. For example, its ex directors include ex Prime Minister Matti Vanhanen and MP Antti Kaikkonen. Foundation have received tens of millions public funds for construction. In 2018 police investigated construction business in Estonia and €18,5 million financing from Poland. Millions of euros seems to be lost in consulting agreements and in over payments of land and constructions. [41] Police investigate financial transactions, black market accounting, potential money laundering and potential relations to tax havens. [42] Business in Estonia was made with a Finnish businessman, who is member of board in at least in three apartments in the USA owned by MP Eero Lehti, conservative National Coalition Party in Finland. [43]

Construction company in Hämeenlinna was in bankruptcy in September 2019. Main owner was accused of bribes in relation to Youth Foundation (Nuorisosäätiö) case. [44] [45]

Youth Foundation lost 8 million in real estate deals and first juridical claim was published in January 2020. Investigation is ongoing about e.g. fraud and bribe. [46]

Electronics

The 1977 Salora case was Finland's largest tax evasion and bribery case to date. TV Nurmi and Salora sold televisions valued at six million Finnish markkas (excluding accounting procedures) from 1970 to 1975. A Valco factory, built in Imatra at a cost of Fmk265 million in 1978, was bankrupt in two years. Politicians were accused of bribery, since they received TV and stereo equipment from Salora. Although no leading politicians were accused in court, Social Democrats, RKP, Liberals and Centre Party candidates lost in the next election because of suspected bribery. Bror Wahlroos, father of Björn Wahlroos, was accused of receiving stereos valued at Fmk2,000 and received a Fmk3,000 fine. Selora's director was convicted of bribing five ministers, two secretaries-general, one governor and 30 tax officers, and sentenced to 3+1⁄2 years' imprisonment. [47]

Politics

Tax Administration director Mikko Laaksonen found company election funds for the National Coalition Party which were incorrectly reduced as the expense of company operations during the 1980s. In 1979, the largest newspaper advertisement expenses in Helsinki were by members of the Construction Committee. [48] [49]

Mikko Sauli told Helsingin Sanomat on 11 May 2012 that political youth organizations overestimate membership to receive more state support. The large parties refused to give their member lists to authorities. State support was largest in 2012 for the centre (€670,000) and National Coalition Parties (€657,000). [50] [51] Ilkka Kanerva of the National Coalition Party was convicted in April 2012 for receiving bribes, and resigned from the Turku council the following month. [52]

Government

In November 2016, Juha Sipilä's government allocated €100 million in public funds for Terrafame (known as the Talvivaara Mining Company). YLE TV News reported that a company owned by Sipilä's children and other relatives had a half-million-euro contract with Terrafame. According to Sipilä, Pöyry drew up the contract as a consultant. Pöyry's major owners are Henrik Ehrnrooth and his family. [53] [54] [55] YLE reported that Georg and Henrik Ehrnrooth own a company in Luxemburg which organizes tax-haven companies for clients, including Jorma Ollila and Kari Stadigh. The company worked with Mossack Fonseca in Panama for several years. [56]

Sports

In 2011, 11 football players were charged with bribery. Singaporean match-fixer Wilson Raj Perumal was accused of fixing matches from 2008 to 2011. [57]

Anti-corruption conventions

Agreements include: [58]

Transparency International

According to Transparency international reports, Finland has changed little since 2012 in its Corruption Perceptions Index: [59]

See also

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References

  1. ↑ "The ABCs of the CPI: How the Corruption Perceptions Index is calculated". Transparency.org. Retrieved 24 November 2022.
  2. ↑ "Corruption Perceptions Index 2022: Finland". Transparency.org. Retrieved 28 May 2023.
  3. ↑ "Global Corruption Barometer 2013-Finland". Transparency International. Retrieved 17 November 2013.
  4. ↑ Report: Finland 'still has work to do' in addressing corruption yle 3.2.2014
  5. ↑ "Snapshot of the Finland Country Profile". Business Anti-Corruption Portal. GAN Integrity Solutions. Archived from the original on 10 November 2013. Retrieved 17 November 2013.
  6. ↑ Lobbaamisen harmaa alue Jarno Liski, Suomen Kuvalehti 24.5.2019 page 9
  7. ↑ Vaalijohtaja: Vaalirahoituslain rikkominen melko yleistä YLE 15 May 2008 (in Finnish)
  8. ↑ Evaluation Report on Finland on Incriminations, Theme I, s. 21, GRECO 3–7.12.2007
  9. ↑ "Finland - 9-Corruption". 2017.
  10. ↑ "Poliittiset virkanimitykset ovat suomalaista korruptiota" yle 13 January 2012 (in Finnish)
  11. ↑ "Harmaan talouden tutkija: Veroparatiisien tutkintaan ei panosteta Suomessa". 25 March 2013.
  12. ↑ Suomesta veroparatiiseihin 320 miljoonaa vuodessa Taloussanomat 9.10.2013
  13. ↑ "Finnwatch: 100s of Finnish subsidiaries in tax havens yle 8.1.2014". Yle.fi. Retrieved 23 February 2014.
  14. ↑ Kaikkien aikojen veronkiertotutkinta kuivui kokoon - varoja piilottaneet suomalaiset jäävät ilman rikosseuraamuksia yle 18.9.2013
  15. ↑ Supreme Court ruling hobbles Liechtenstein tax probe Yle 19.9.2013
  16. ↑ Bertel Pauligilla veroparatiisitili 9.10.2013 A9
  17. ↑ HS-raportti: Luxemburgin veroparatiisi Helsingin Sanomat 22.9.2013 B7-B10
  18. ↑ Billions in Finnish taxes remain uncollected yle 16.12.2013
  19. ↑ Liechtensteinin veronkiertojutussa on määrätty hyvin pieniä veronkorotuksia yle 16.12.2013
  20. ↑ Court drops all charges in €135m money laundering case YLE News 9.10.2019
  21. ↑ Youth Foundation CEO quits amid police probe YLE News 13.3.2018
  22. ↑ Nuorisosäätiön johtaja sai satoja tuhansia euroja veroparatiisiyhtiöiltä – poliisi selvittää, onko kyse lahjonnasta YLE 24.8.2016
  23. ↑ Vaalirahakohussa ryvettyneellä Nuorisosäätiöllä ja sen johdolla vaiettuja kiinteistöbisneksiä YLE 24.8.2016
  24. ↑ Helsingin rakennusvirastosta erityistilintarkastus HS 16.5.2012 A11 Archived 13 July 2012 at archive.today
  25. ↑ 6 detained in Helsinki construction bribery probe yle 21 May 2012
  26. ↑ Destiassa epäillään törkeää kavallusta – kaksi epäillyistä päällikkötasolla HS
  27. ↑ Espoo Leaders Face Bribery Charges yle 13.07.2010
  28. ↑ Länsiväylä 1.6.2007,page.6
  29. ↑ Loukon lahjustuomio pysyy yle 9.12.2013
  30. ↑ Espoon johtokaksikko jatkaa tehtävässään yle 9.08.2010
  31. ↑ Board of Directors in 09.08.2010 Archived 13 December 2013 at archive.today
  32. ↑ Oikeusasiamies: Gallen-Kallela-Sirén jäävi Guggenheim-valmistelussa Helsingin Sanomat 18 May 2013
  33. ↑ Ajatko alas Helsingin taidemuseota, Janne Gallen-Kallela-Sirén? HS 3.2.2012
  34. ↑ Carl Gustaf Ehrnrooth avasi oven Helsingin Guggenheim-hankkeelle 15 January 2012
  35. ↑ Kanerva's bribery sentence overturned yle 27 June 2013
  36. ↑ Puolen miljoonan lahjusepäily Helsingin Sanomat 2.10.2013 A16
  37. ↑ Vantaan Peltomäkeä epäillään törkeästä lahjonnasta HS 1.10.2013
  38. ↑ Peltomäen lähipiiriä epäillään rahanpesusta HS 1.10.2013
  39. ↑ Rikosoikeuden professori: Virkamiehen puolen miljoonan lahjusepäily on ainutkertainen HS 2.10.2013
  40. ↑ Tarkastajat haluavat sakotusoikeuden Olkiluodossa HS 11.10.20112 A
  41. ↑ Näin kupattiin Nuorisosäätiön rahat: käsikirjoitus MOT YLE November 2018
  42. ↑ Nuorisosäätiön johtaja sai satoja tuhansia euroja veroparatiisiyhtiöiltä - poliisi selvittää, onko kyse lahjonnasta YLE MOT 07.03.2018
  43. ↑ Eero Lehden ”unohtama” virolaisyritys, veroparatiisikytkös ja rakennusyhtiön veropetosepäily – satojen firmojen miehellä on poikkeukselliset verkostot YLE MOT 07.03.2018
  44. ↑ Rakennusliike Leimarakentajat jätti konkurssihakemuksen YLE 24.9.2019
  45. ↑ Rikosvyyhti laajenee – jo toista rakennusliikkeen omistajaa epäillään Nuorisosäätiön ex-johtajien lahjomisesta YLE MOT 22.07.2019
  46. ↑ Nuorisosäätiö YLE 15 January 2020
  47. ↑ Kronikka 1900–1999 Suomen ja maailman tapahtumat. Weilin+Göös, 1999
  48. ↑ Aarno Laitinen Musta monopoli Kustnnus vaihe Ky Gummerus 1982 page 110
  49. ↑ Aarno Laitinen Musta monopoli Kustnnus vaihe Ky Gummerus 1982 page 62
  50. ↑ Pääkirjoitus Nuorisojärjestöjen haamujäsenet HS 15 May 2012
  51. ↑ Ex-demarinuori:Jäsenmääriä vääristelty, Poliittisten nuorisojärjestöjen jäsenrekisterit eivät pidä paikkaansa, sanoo demarinuorien entinen pääsihteeri Mikko Sauli, 11.5.2012A4
  52. ↑ Kanerva withdraws from Turku council yle 21 May 2012
  53. ↑ Pääministerin enojen, serkkujen ja lasten omistamalla yrityksellä noin puolen miljoonan euron tilaus Terrafamesta Yle TV news 25.11.2016
  54. ↑ Terrafamen kaivoksen alasajo ei ole enää vaihtoehto – Sipilä: "Sotkamossa on tehty ihme" Yle TV news 14.11.2016
  55. ↑ Government pledges 100 million euros more for eastern Finland mine YLE TV 11.11.2016
  56. ↑ Ehrnrootheilta paljastui oma veroparatiisitehdas – yhtiöllä ollut tiivis suhde Panaman Mossack Fonsecaan YLE A Studio 27.4.2016
  57. ↑ RoPS-pelaajille ehdollista lahjusten vastaanottamisesta Singaporelaismies vankilaan, HS 20 July 2011 A2+0
  58. ↑ Global Corruption Report 2009 Archived 3 March 2011 at the Wayback Machine , Corruption and the Private Sector, Transparency International August 2009
  59. ↑ "CORRUPTION PERCEPTIONS INDEX 2017".
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