EU sanctions implementation in Finland
1. Finnish Customs Investigations into Sanctions Evasion
In December 2023, Finnish Customs uncovered a substantial sanctions evasion scheme involving two Finnish companies suspected of illegally exporting EU-sanctioned products, including electronics, drones, and defence materiel, to Russia. The investigation revealed that these companies had been involved in over thirty instances of exporting or attempting to export sanctioned items, with a suspected total value exceeding €600,000. Additionally, nearly 3,500 drones, valued at over €2 million, were also suspected to have been illegally diverted to Russia. A critical aspect of the case involved the suspected transit of drone-stopping equipment classified as defence materiel. The companies allegedly circumvented sanctions by transiting goods through other countries under false pretenses. This case underscores the complexities involved in enforcing sanctions and the need for vigilant monitoring and investigation by authorities.
2. Implementation of EU Directive on Sanctions Violations
In response to EU Directive 2024/1226, Finland is amending its Criminal Code to introduce specific criminal offences related to sanctions violations. The new provisions, set to take effect on 20 May 2025, include:
Sanctions Offence: General violation of EU sanctions.
Aggravated Sanctions Offence: More severe violations involving significant financial gain or deliberate circumvention.
Negligent Sanctions Offence: Violations resulting from negligence.
Sanctions Violation: Breach of sanctions regulations.
These amendments aim to harmonize Finland's legal framework with EU standards and enhance penalties for sanctions violations. Notably, the double criminality requirement will be abolished, allowing for the prosecution of Finnish citizens for sanctions offences committed abroad, even if the act is not punishable under the law of the place where it was committed.
3. Confiscation of Russian Assets in Finland
In October 2024, a Finnish court ordered the confiscation of $4.25 billion in Russian assets in Finland at the request of Ukrainian state firm Naftogaz. This legal action stems from Naftogaz seeking compensation for the expropriation of its property by Russia following the annexation of Crimea in 2014. The Finnish Enforcement Authority executed the order, which included seizing and freezing various Russian assets, including real estate and properties valued at tens of millions of dollars. The confiscation marked the first successful asset freeze outside Ukraine in this context. Russia plans to contest the order, asserting that some seized properties are diplomatic and therefore protected under international law.
4. Seizure of Russian Freight Cars
In July 2022, Finland seized nearly a thousand freight cars belonging to Russian companies as a result of European Union sanctions. Finnish state-owned rail operator VR and a letter from Russia's rail monopoly revealed that 865 rail cars from Russia were seized by bailiffs. The seized rail cars belonged to companies either directly hit by EU sanctions or whose shareholders gave up their control because they got hit by sanctions after Russia's invasion of Ukraine. The Finnish bailiff authority reported that it had frozen assets of a few dozen Russian and Belarusian individuals and legal entities, including transportation firms, worth at least €82 million, to comply with EU sanctions.
5. Court Acquittal in Sanctions Case
In a case involving a Finnish company's CEO, the District Court of South Karelia acquitted the CEO of sanctions charges. The company had received an order from a Russian customer for non-prohibited goods, which later became sanctioned. The CEO decided to go through some of the motions of an export, which would then be blocked, and this would be proof that delivery could not be made. Customs considered that the company was seeking to export sanctioned goods and investigated and charged the CEO with the appropriate sanctions breaches. However, the court relied on the fact that the company had taken no steps to move the goods from its warehouse and found that there was no real intention to actually export.
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