Relations between Finland and Russia have never been so deteriorated since the war in Ukraine began, which led the Nordic country to join the NATO military alliance. The latest chapter in this tension between the two countries has occurred after the action of the National Enforcement Authority of Finland (an agency that reports to the Ministry of Justice) to confiscate the real estate assets that the Moscow Government has in the Nordic country. The seizure of properties began on October 24 and affected 40 properties with a total value of 35 million euros, according to the newspaper. Helsingin Sanomat.
The action has been carried out by order of a Helsinki court in relation to a decision made by the International Court of Arbitration in The Hague in April 2023. This international court sentenced Russia to pay the Ukrainian state energy company Naftogaz more than 5 billion euros as compensation for the invasion of the Crimean peninsula in 2014, in which much of the company’s infrastructure was destroyed.
The Ukrainian energy company has celebrated in a statement the decision made by the Helsinki court, alleging that “given that Russia refuses to voluntarily pay Naftogaz the funds stipulated by the Hague ruling, we continue to use all available mechanisms to recover them. Today we are one step closer to restoring justice. At the same time, we are taking active measures to enforce the legal ruling in other jurisdictions involving Russian assets,” said Naftogaz Group President and CEO Oleksiy Chernyshov.
The Naftogaz company has also requested the confiscation of Russian assets in the rest of European countries, but for now Finland has been the first State to implement the seizures, according to local press reports. The reaction from the Kremlin to the freezing of millions of euros in real estate has not been long in coming. A protest note has been sent from the Russian embassy in Finland to the Ministry of Foreign Affairs announcing legal action against Finland’s decision. For his part, Kremlin spokesman Dmitry Peskov confirmed: “Of course, we will challenge this in court. Naturally, the Russian Federation will defend its real estate interests, so we will use all legal mechanisms to protect our interests.”
The Russian embassy in Helsinki is not touched
Among the list of properties seized by the Finnish Government, the building of the Russian Center for Science and Culture, located in the central Töölö district in Helsinki, stands out for its real estate value, as well as another office building worth 10 million euros in the capital. The public television network YLE has revealed the list and location of the rest of the 40 Russian properties seized by the authorities, of which half are diplomatic properties, including the residences of embassy workers in the country.
However, it has been reported that the Russian embassy complex has not been seized, as its diplomatic use is protected by the Finnish Constitution and international law. The rest of the seized properties vary greatly and are spread throughout the country, such as a 17-hectare plot of land located on the seafront, which Russian diplomats used as a summer residence. According to Finnish media, several houses have also been expropriated in the demilitarized zone of the Åland Islands, including a 1.78-hectare residence that would have been owned by Russian President Vladimir Putin in 2009.
A matter of national security
In parallel with the freezing of Russian real estate assets, the Helsinki Government is preparing legislation for this fall to completely prohibit Russian citizens and companies from purchasing property in Finland. According to a draft law that was made public, Finland would apply a ban on purchasing real estate to citizens of States “whose territory of origin has been considered to violate the territorial integrity, sovereignty and independence of another State and may threaten the security of Finland.”
According to the Government, real estate in the hands of Russian owners is considered to represent a potential danger to the country’s security and, therefore, the Executive sees it as a priority to approve this law. In September, the Ministry of Defense reported that six permits for real estate transactions by companies and private buyers of Russian nationality had been denied.
Minister Antti Häkkänen justified the decisions by stating that “it cannot be ruled out that the real estate acquisitions in question could threaten national security and hinder the organization of national defense or the surveillance and safeguarding of territorial integrity.” These six properties were in the east of the country, near the shared 1,400 kilometer border with Russia and which has still had its land posts closed for a year.
Since the start of the war in Ukraine, the Government of Finland fears the escalation of tensions and the impact of a hybrid war carried out by the Kremlin that threatens strategic sectors such as telecommunications, infrastructure or cybersecurity. For this reason, the Ministry of Defense has recently reported that in recent years 3,500 real estate assets linked to Russian owners have been monitored throughout the country.
“We see as a potential threat to our security the fact that we have Russian and other landowners acquiring land near critical infrastructure,” Prime Minister Petteri Orpo said.
In recent years, Finnish media have repeatedly reported several cases of suspicious properties and real estate acquired by Russian owners. Some striking cases have been those of unusually fortified forest cabins, summer houses equipped with helipads or the acquisition of logistical warehouses of no apparent value, but which were located near airports or border control posts, so it was suspected that could be used for espionage tasks or sabotage actions. The Ministry of Defense also clarified that until the ban is approved, the majority of real estate purchases by Russian citizens have received approval, however, the number of applications has clearly decreased.
For the researcher at the Finnish Institute of International Affairs (FIIA) Arkady Moshes, these actions are further proof of the “ruinous state of relations between the two countries, where any action or decision can be justified in favor of national security because public opinion “The public sees everything through the prism of security.” “The relationship between the two countries could not be worse,” concludes the expert.
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