Finland

Finland Corruption Report

Snapshot

Finland_250x148.jpgCorruption does not impact businesses operating in Finland. The Finnish regulatory system is transparent, and administrative corruption is almost non-existent. The Criminal Code contains provisions against active and passive bribery, embezzlement, fraud and abuse of office, and persons and companies can be held liable for offences. Facilitation payments are prohibited, while the propriety of gifts and hospitality depends on their value, the intent and the potential benefit obtained. Corruption is limited due to an administrative culture of transparency and openness, a strong system of internal and external controls, and the involvement of civil society in the management of public affairs. Isolated incidents of corruption and favouritism do occur, primarily at the local level, where the interests of businesses and local politicians are sometimes improperly linked in so-called ‘old-boys networks’.

Last updated: November 2015
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Judicial System

Corruption is not a problem in Finland's judicial system. Companies consider the judiciary independent and effective in ensuring the transparent enforcement of commercial contracts, dispute settlements and the protection of property rights (GCR 2015-2016, ICS 2015). Finnish judges must adhere to a set of ethical principles which include openness, independence, professionalism and impartiality in the justice system (FER 2013). Public polls reveal that citizens do not pay bribes to judges and that the judicial system is considered to be among Finland’s least corrupt institutions (GCB 2013European Commission, Feb. 2014).

Police

Finland's police sector is regarded as being free from corruption and enjoying a large degree of public trust. The reliability of police services to protect companies from crime is considered very high (GCR 2015-2016), and the government has effective mechanisms to investigate and punish police abuse (HRR 2014). Public polls reveal that citizens do not pay bribes to police officers and that police services are considered to be among Finland’s least corrupt institutions (GCB 2013European Commission, Feb. 2014).

In an isolated corruption case, the former head of Helsinki's anti-drug police unit, Jari Aarnio, was found guilty of abuse of office, aggravated fraud and acceptance of bribes. He received a year and eight months prison sentence for the purchased equipment and software on behalf of the Helsinki police department from a company in which Aarnio was an investor and holding decision-making powers. Aarnio faces eight charges, and the case is still pending (Uutiset, June 2015).

Public Services

Finland's regulatory system is transparent, efficient and competitive, and companies are very unlikely to encounter corruption when interacting with the public administration or when obtaining public services. It is considered easy to deal with government administrative requirements (permits, licences, reporting, etc.), and companies report that irregular payments and bribes almost never occur when obtaining public utilities, business permits, licences and other related services (GCR 2015-2016European Commission, Feb. 2014).

Land Administration

Corruption in Finland's land administration is not considered a problem. Companies are unlikely to encounter corruption while interacting with land services, and no surveyed companies report of bribery when obtaining building permits (European Commission, Feb. 2014). The average time required to register property is higher than the OECD average, while the cost is almost the same (DB 2015).

Tax Administration

Public polls reveal that Finland's tax administration is free from both corruption and abuse of power, and that bribery almost never occurs during interactions with tax authorities (GCB 2013European Commission, Feb. 2014). The Act on the Taxation of Business Profits forbids the tax deduction of bribes in Finland and abroad. The tax administration has provided tax officials with guidelines stating the latter's obligation to report suspected criminal offences, including foreign bribery (ICS 2015). The average time and cost required to deal with tax payments is lower than the OECD average (DB 2015).

Customs Administration

Corruption at Finland's borders is not considered a problem for importing and exporting, and the transparency of the border administration is very high (GETR 2014). Public polls reveal that the Finnish customs administration is free from corruption and abuse of power, and that bribery almost never occurs during interactions with customs services (GCB 2013European Commission, Feb. 2014).

Public Procurement

Corruption in Finland's public procurement process is not an obstacle for businesses. Even though a quarter of surveyed businesses believe corruption has prevented their company from winning a public tender in Finland in the past three years (European Commission, Feb. 2014), almost none state it being common practice to use bribery in their sector to win contracts (NTCBR 2013). Finnish 'old boys networks', a system of informal relationships between businessmen and public decision-makers, are reported to influence procurement decisions, especially at the local level (NISA 2012EUACR 2014). The majority of companies report that procurement officials are not likely to show favouritism when deciding upon contracts (GCR 2015-2016).

Natural Resources

Corruption is not reported to be an obstacle for businesses in Finland's natural resources sector (European Commission, Feb. 2014). Finland is among 17 governments that provide political, technical and financial support to the Extractive Industry Transparency Initiative (EITI), which aims to ensure accountability in and the transparent publication of extractive industry revenues and expenses.

Legislation

Finland's Criminal Code prohibits active and passive bribery, embezzlement, fraud, abuse of office, breach of trust and abuse of insider information. It criminalises bribery between businesses, of Finnish and foreign public officials, and through intermediaries (agents, consultants or other representatives). Persons and companies are subject to criminal corruption offences. The Criminal Code distinguishes between non-aggravated bribery and aggravated bribery, with the latter carrying penalties of up to four years’ imprisonment. A company can be held criminally liable for corruption offences committed by individuals working on its behalf and may be ordered to pay corporate fines of up to EUR 850,000 for violations. Finland's law offers no distinction between bribes and facilitation payments, while the propriety of gifts and hospitality depends on their value, intent and potential benefit obtained. The Ministry of Finance has issued guidelines for civil servants regarding gifts, benefits and hospitality. MPs are not allowed to keep gifts exceeding a value of EUR 100. Other relevant legislations include the Political Parties Act, which requires candidates and parties to report campaign donations exceeding EUR 800 in local elections, and EUR 1,500 in parliamentary elections. The Act on Public Contracts provides for mandatory exclusion of bidders from competitive tendering if they have been convicted of a serious offence such as bribery. Bribes and other benefits given for an inappropriate purpose are not tax deductible according to the Act on the Taxation of Business Profits.

Finland is a signatory to the OECD Anti-Bribery Convention, the United Nations Convention Against Corruption (UNCAC), the Council of Europe’s Civil and Criminal Law Conventions against Corruption, and the Group of States Against Corruption (GRECO). Access the Lexadin World Law Guide for a collection of legislation in Finland.

Civil Society

In Finland, freedom of expression and access to information are constitutionally guaranteed and respected by the government in practice (HRR 2014). Media outlets and journalists operate freely, without political interference or other restrictions. The media plays a central role in uncovering and reporting on corruption cases (NISA 2012), and Finland's media environment is considered among the freest in the world (FotP 2014).

Civil society organisations (CSOs) play a vital role in Finland, with around 75 percent of Finns belonging to at least one organisation. Many CSOs rely on state funding (NISA 2012), and very few CSOs are active in anti-corruption matters.

Sources

Topics: Europe & Central Asia