Report on banning foreign real estate acquisitions sent out for comments

Report on banning foreign real estate acquisitions sent out for comments

The Finnish Government aims to improve national security of Finland by tightening the legislation on foreign real estate transactions. A working group appointed by Minister of Defence Antti Häkkänen drew up a report on the matter, which will be sent out for comments next. The legislative proposal is due to be submitted to Parliament before the end of the year.

The working group proposes that no permit to buy real estate be granted to persons whose country of nationality has been found by the European Union to be in violation of the territorial integrity, sovereignty and independence of another country or whose country of nationality may be a threat to Finland's national security. This prohibition would also apply to entities who are domiciled in the territory of such a country or who are owned or influenced by citizens or entities of such a country. Further provisions on such countries would be issued by government decree.

"In recent years, Western countries have seen continual examples of the increasingly flagrant means employed to destabilise our societies. Finland must make sure not to leave any windows of vulnerability open to hostile actors. We must identify and neutralise in advance any risks that could compromise the functioning of society and the security of the population in times of crisis," says Minister of Defence Häkkänen.

The security situation in Europe and in Finland is more serious and more difficult to predict than at any time since the Cold War, and the change is expected to be long-lasting. The threat of intelligence and influence targeting Finland's critical infrastructure has increased both in the physical and cyber environment as a result of Russia's aggression against Ukraine and Finland's membership in NATO.

The purpose of the proposed provisions is to prevent hostile broad-spectrum influencing by means of property owned in Finland. Foreign real estate ownership can be exploited to prepare hostile action against the Finnish society. Such action can be used against the Finnish economy, infrastructure, businesses and security of supply or against Finland's self-determination and capacity to provide security for its population.

The legislative project is related to the Programme of Prime Minister Petteri Orpo's Government, which states that the Government will examine the adequacy of the regulation on the acquisition and possession of real estate by parties outside the EU and the EEA. The Government will also examine possibilities to engage in more effective ex post facto intervention and control in respect of assets central to the security of society and security of supply.

The report is available in Finnish in the Gateway to Information on Government Projects (PLM005:00/2023).

The deadline for comments on the report is 25 October 2024. All organisations and private individuals may submit comments online at lausuntopalvelu.fi. Following the consultation round, the law-drafting work will continue at the Ministry.

Inquiries: Kosti Honkanen, Senior Specialist for Legal Affairs, Chair of the legislative project, tel. 0295 140 607, [email protected], and Joonas Laito, Specialist, Vice-Chair of the project, tel. 0295 140 071, [email protected]

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