Russian citizens, the largest group of foreign property holders in Finland, have for years been buying up not only holiday homes but also plots located near strategic military areas. The Airiston Helmi police raid in southwest Finland on 22 September was the latest in a chain of events that pushed Finnish lawmakers to move beyond ignoring the Russian threat to enact laws restricting foreigners from purchasing real estate in sensitive areas.
On 22 September, the Finnish National Bureau of Investigation (NBI) described on Twitter an ongoing police raid in the Turku Archipelago in the southwest part of the country. The raid, which included about 400 police, tax police, border guards, and national defense unit officials, some of them heavily armed, was organized to search land owned by Airiston Helmi, a Finnish real estate firm led by a Russian with Maltese citizenship. Two suspects, a -year-old Russian citizen and former board member of Airiston Helmi, and a 51-year-old Estonian national, were taken into custody. The NBI seized €3 million in cash and a large amount of data, and found a well-equipped communications center in the cellar.
The NBI reported that the raid was targeted at an alleged international money laundering scheme and rejected suggestions that the operation had anything to do with national security concerns. However, several security experts have proposed that the operation was prompted by national security as well as financial reasons.
Airiston Helmi, founded in 2007, is a very small, highly leveraged, high-risk company that regularly bought and sold properties in southwest Finland for millions of euros between 2007 and 2014. It owns 50.45 of land, including several islands and lots along strategically important maritime routes connecting the city of Turku, Finland’s sixth-largest city. While the Finnish media has repeatedly reported on the purchase by Russian interests – including Airiston Helmi and Russian private citizens – of real estate close to strategic infrastructure and military objects, Finnish authorities have not publicly discussed the threat until recently. Finnish authorities nevertheless reportedly have kept watch on these transactions.
There are several reasons, including legal and historical ones, for why it is possible for foreigners to purchase real estate close to strategic infrastructure in Finland despite the risk to national security.
First, Finland does not currently have a law that would restrict or forbid foreigners from buying land in sensitive areas; these restrictions were lifted following Finland’s accession to the European Union in 1995. The number of Russian purchases grew fast after 2000 and reached an all-time high of 780 transactions in 2008. In all, since 2000, Russian citizens have bought about 5,000 properties in Finland, becoming the largest single group of foreign property holders. In many cases, the buyers are ordinary Russians buying summer homes in an economically and socially safe environment. But some real estate purchases do not resemble holiday homes and are located close to military areas and outposts or other strategically important infrastructure. The lack of any legal means to restrict these purchases put Finnish officials in a difficult situation – according to Finnish journalist Marjo Näkki, without an applicable law, restricting only purchases by Russian citizens would be discriminatory. For a rule-based, democratic country that highly values human rights, that practice would be unthinkable.
Second, Finland’s relations with Russia has always been fraught. The country was part of the Russian Empire for almost a century and the two nations share 1,300 km of border. Finland fought Russia in 1939-40 and 1941-44, losing a tenth of its territory as a condition of the 1948 peace treaty. During the Cold War, Finland chose neutrality. This neutrality came at the cost of “Finlandization” – a foreign policy adopted to suit the Soviet Union.
Third, even though Finland retained its independence, the Soviet Union had a strong influence on Finland during the Cold War in many areas: not only foreign policy and national defense, but also the economy, education, the press, and culture. For example, some Finnish schoolbooks were written according to Soviet historiography. The media and culture were partly censored. These restrictions left a trace. As Sofi Oksanen described it, “wearing a bridle such as this for decade after decade affects the language and the mindset of a people. We still don’t know which decisions made during that period were based on real threats or on self-censorship and delusion. These are the most treacherous consequences of Finlandization.”
In the post-Cold War period, Finland has been pursuing a new foreign policy course: it is seeking a balance between keeping in contact with Russia (but remaining, hard-headed and realistic), and drifting westward.
Being a relatively small Western country next to Russia’s border, Finland’s attempt to seek a balance is key to explaining Finland’s seemingly controversial foreign policy. On one hand, Finland has not joined NATO and according to a 2017 poll, a majority of Finns oppose outright NATO membership. Nevertheless, Finland is one of five countries that make particularly significant contributions to NATO-led operations and supports other Alliance objectives. In 2017, Finland established the European Centre of Excellence for Countering Hybrid Threats in Helsinki, supported by NATO and the European Union, to engage in strategic-level dialogue, research, training, and consultations.
Similarly, Finnish President Sauli Niinistö has maintained closer ties with Russian President Vladimir Putin than most other EU leaders since the Ukraine crisis; Putin has visited Finland every year since 2016, and the Trump-Putin Summit this summer was held in Helsinki. At the same time, Finland has backed Western economic sanctions against Russia over Crimea, and was one of the countries that publicly expelled a Russian as part of the EU’s response to the nerve gas attack in Salisbury, England. According to a recent poll, most Finns remain skeptical about Putin, with just 2 percent of respondents saying they believed Putin was making the world a safer place.
These two aspects – juridical and historical – perhaps explain both Finland’s two-track Russian policy and why, as mentioned by Laur Nurmi, a journalist at the Finnish newspaper Aamulehti, it has been a common practice in Finland not to mention the ever-present Russian threat. Sometimes, according to Nurmi, this even includes giving inaccurate information on Russian-related events. Nurmi is one of many Finnish experts who believe that, with regard to the Airiston Helmi case, the official investigation into the real estate deals is just a smoke screen to both and send the Kremlin a message that Finland “has had enough.”
But things are changing. In past years, the Finnish government’s national security committee updated its list of scenarios that constitute hybrid warfare against the country, adding foreign real estate acquisitions and information warfare, among others, to more common security threats such as war and terrorism. The Airiston Helmi case made the discussion over Russian influence public, and the Finnish defense ministry is preparing a draft law that requires national security to be taken into account in certain real estate transactions.
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Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.