Customs authorities detain several Outokumpu employees
Evidence of double-billing collected during raid
Criminal investigators of Finnish Customs have detained several employees of the metallurgical company Outokumpu on suspicion of criminal action linked with the export of stainless steel to Russia.
The authorities also conducted an extensive raid on Outokumpu offices in Tornio. The search of the premises extended from Tuesday through Thursday, during which time large numbers of documents were confiscated.
The criminal investigation began on Tuesday; the matter came out in public on Wednesday when Outokumpu issued a press release, according to which the investigation involves the export of stainless steel from Tornio to Russia. Finnish Customs issued an equally brief statement on the matter on Thursday.
Sami Rakshit of Finnish Customs said that the authorities had "started a preliminary investigation and interrogated several Outokumpu employees who are under suspicion".
Neither Rakshit, nor any others who took part in the investigation would agree to talk, noting that the investigation was incomplete, and that suspicions involving a large listed company are quite sensitive matters.
Finnish Customs says that it will give out its next report on the matter in mid-April.
Helsingin Sanomat has learned that the suspicions involve both the export of steel to Russia, as well as import of scrap steel from Russia.
Under the practice of double billing, companies evade taxes and other fees by showing one set of documents to Finnish authorities and another set to the Russians for the same consignment of goods.
Double billing has been common in exports to Russia, but Finland has not taken issue with the matter, as it has not been seen as a crime under Finnish jurisdiction, because the falsified papers have been shown to Russian officials.
There have been suspicions that double billing is taking place with the collusion, and possibly at the initiative of Finnish exportres. Companies have nevertheless avoided direct responsibility by emphasising the roles of mediators in the deals.
In the Outokumpu case, customs investigators are interested in the actions of companies that have served as go-betweens. Police also have investigations pending against the same or similar companies.
Large Finnish corporations have long used companies that act as go-betweens in connection with trade with Russia. Some of the companies are domiciled in Finland and others in Russia, and some are located in countries considered tax havens.
Outokumpu has also used such middlemen.Helsingin Sanomat has learned that a certain company located in the southeast of Finland has had a key role in the case.
Outokumpu also has operations of its own in Russia, for which it has its own subsidiary, Outokumpu Rossija, which specialises in imports of Russian scrap metal to Finland.
It was also revealed on Tuesday that police suspect that the Outokumpu steel mill in Tornio had been cheated in a scrap metal deal. The case apparently has nothing to do with the matters being investigated by customs authorities.
The suspected fraud emerged when the National Bureau of Investigation and local police were investigating suspected tax fraud linked with trade in scrap metal in the Oulu region. Several companies had sold about EUR 5 million worth of scrap stainless steel between 2004 and 2006.
Police say that inside the scrap steel there had been metal of lesser value, and even slag.
Outokumpu press release: Tornio works staff questioned in relation to export to Russia