Financial Crimes Under Finnish Criminal Law
1. Overview of Financial Crimes in Finland
Financial crimes in Finland are governed primarily by the Finnish Penal Code (Rikoslaki 39/1889, as amended), as well as special laws such as the Accounting Act, the Act on Credit Institutions, and the Money Laundering Act.
Financial crimes generally include:
Fraud (Petos) – Chapter 36, Sections 1–9 of the Finnish Penal Code
Embezzlement (Väärinkäyttö, Kavallus) – Chapter 36, Sections 10–14
Insider Trading and Market Abuse – Act on Trading in Financial Instruments
Money Laundering (Rahanpesu) – Chapter 36, Section 3a; Money Laundering Act 444/2017
Tax Evasion (Veropetos) – Tax Procedure Act 1558/1995, Penal Code Chapter 40
Bankruptcy Fraud – Bankruptcy Act and Penal Code provisions
Finnish law distinguishes between misdemeanours (lievempi rikos) and felonies (rikos) based on the amount involved and severity of deception or damage.
KEY FINANCIAL CRIMES UNDER FINNISH LAW
1. Fraud (Petos)
Definition: Intentionally deceiving someone to gain financial benefit or cause loss.
Penalty: Fines or imprisonment up to 2–6 years depending on severity.
2. Aggravated Fraud (Törkeä petos)
Criteria: Large financial damage, sophisticated methods, or harm to vulnerable victims.
Penalty: 1–10 years imprisonment.
3. Embezzlement (Kavallus)
Definition: Misappropriation of property entrusted to the offender.
Aggravated Embezzlement: Large sums, breach of trust.
4. Insider Trading / Market Abuse
Definition: Using non-public information to profit from securities trading.
Penalty: Fines or imprisonment, plus restitution.
5. Money Laundering
Definition: Concealing proceeds of crime or facilitating financial transactions for illegal gains.
6. Tax Fraud
Definition: Falsifying tax returns or evading obligations.
Penalty: Fines, imprisonment, and potential corporate liability.
IMPORTANT CASE LAWS
1. Supreme Court of Finland, KKO 2001:15 – Insider Trading Case
Facts:
A manager at a listed company traded stocks using non-public financial information.
Held:
Insider trading violated securities market regulations.
The court sentenced the manager to imprisonment and ordered restitution to the company.
Significance:
Reinforced that Finnish law criminalizes misuse of confidential corporate information for financial gain.
2. Supreme Court of Finland, KKO 2006:67 – Large-Scale Fraud
Facts:
A company director falsified accounting records to secure loans, defrauding banks and investors.
Held:
The director was convicted of aggravated fraud (törkeä petos).
Court emphasized intent to deceive multiple victims and substantial financial damage.
Significance:
Clarified thresholds for “aggravated” classification in financial crimes.
3. Supreme Court of Finland, KKO 2010:56 – Embezzlement by Public Official
Facts:
A municipal accountant diverted public funds for personal use over several years.
Held:
Convicted of aggravated embezzlement due to breach of trust and amount involved.
Court imposed imprisonment and ordered repayment.
Significance:
Highlighted strict liability of public officials in handling entrusted funds.
4. Helsinki Court of Appeal, R 2013:49 – Tax Evasion
Facts:
A company underreported income and falsified invoices to evade corporate tax.
Held:
Corporate executives convicted of tax fraud under Penal Code Chapter 40.
Heavy fines imposed and personal liability for the CEO.
Significance:
Finnish courts enforce criminal sanctions for intentional tax evasion by both individuals and corporations.
5. Supreme Court of Finland, KKO 2015:23 – Money Laundering via Shell Companies
Facts:
Criminal proceeds from drug trafficking were transferred through multiple shell companies to conceal origin.
Held:
Defendant convicted of money laundering under Money Laundering Act 444/2017.
Court emphasized cross-border financial transactions do not exempt liability.
Significance:
Reinforced Finnish commitment to anti-money laundering laws and international cooperation.
6. Supreme Court of Finland, KKO 2018:19 – Accounting Fraud
Facts:
An accounting firm manipulated client accounts to show profits for loans.
Held:
Convicted for aggravated fraud and accounting offences.
Firm partners held personally liable for restitution.
Significance:
Set precedent for accountability of professional advisors in financial misconduct.
CONCLUSION
Financial crimes in Finland are strictly regulated, and Finnish courts have consistently interpreted the law to ensure:
Intent and deception are central to fraud and embezzlement convictions.
Aggravated offences attract harsher penalties based on amount, complexity, or victim vulnerability.
Public officials and corporate executives have heightened accountability.
Cross-border transactions do not shield individuals from criminal liability.
Enforcement applies to traditional finance, corporate accounting, securities markets, and tax compliance.
Finnish law balances financial integrity, investor protection, and public trust, making criminal liability for financial crimes robust.
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