Russian Real Estate in Finland Pose Security Risk, PM Warns

(Bloomberg) -- Finland’s Prime Minister Petteri Orpo said his nation is preparing steps to address the potential security risks from Russian property holding near critical infrastructure.

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Finland for years allowed Russians to buy up land and real estate without security reviews. But after its neighbor launched a full-scale war against Ukraine in 2022, the Nordic nation has woken up to the risk that such assets could be used against it.

Since then, Finland has carried out a full mapping of holdings by Russians, Orpo said in an interview at his seaside residence in Helsinki on Monday.

“We see it as a potential security threat that we have Russian and other foreign property owners, land owners in the vicinity of critical infrastructure,” he said. “Common sense dictates that if we observe a genuine risk to national security, then we ought to be able to act.”

After pushing through legislation that allows the state to intervene in real estate transactions before they happen, Finland is currently drafting a full ban on property purchases. It would apply to citizens of states whose homeland has been found to have “violated the territorial integrity, sovereignty and independence of another state and could threaten Finland’s security,” according to a preliminary text published last month.

No decisions have yet been taken on any such measures, and it’s too early to say “whether we can retroactively reinforce them or if we can expropriate properties,” Orpo said. “This is a very difficult legal question and that’s why we need to carefully review how to proceed.”

The first time Finland blocked the purchase of a property was in late 2022, when the Defense Ministry vetoed the sale of a former nursing home in the west of the country near an army site. It’s since made a handful of other similar decisions.

Still, local newspapers have over the years reported on a swathe of suspicious assets, including heavily fortified sites with helipads, near-empty loss-making hotels kept afloat by owners with links to Russia and locations near key rail interchanges and communications links.

The risk is that such properties “could be used for some acts of damage or possibly as a bridgehead in connection with some larger operation,” Orpo said.

Finland is now more alert to various forms of influence operations and hybrid warfare after facing acts such as cyber attacks, having asylum seekers pushed to its 1,300-kilometer (800-mile) border by Russia, and having to divert aircraft that could not land due to the jamming of the global positioning system.

On Monday, a Russian military aircraft ventured into Finnish airspace for 2 minutes, flying to the depth of 2.5 kilometers over the Baltic Sea. The authorities launched an investigation. While multiple similar incursions have been reported over the years, the most recent incident was the first since Finland acceded to NATO just over a year ago.

Russia’s neighbor entered the North Atlantic Treaty Organization in April 2023 in reaction to the start of the full-scale war in Ukraine, betting that collective security guarantees would help deter any attack. Always suspicious of its eastern neighbor, Finland had kept its defense forces in shape, with more artillery than France and Germany combined and upholding compulsory military service through the years.

“What Russia has caused is that Finland and Sweden joined NATO, the European Union has been completely united in supporting Ukraine whilst opposing Russia, and now Europe has finally woken up to increasing its own defense capabilities,” Orpo said. “All of these have been practically poison for Russia.”

--With assistance from Rob Dawson.

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