Outokumpu issues sharp denial over Finnish Customs suspicions on exports to Russia
Steel manufacturer Outokumpu vehemently denies having done anything unlawful while selling stainless steel to Russia.
The company’s view was further consolidated when it was shown the preliminary investigation material by the Finnish Customs, before the issuing of a final statement.
“The preliminary investigation material confirms our original notion that we have not practiced anything illegal while trading with Russia”, says Matti Louhija Senior Vice President, Corporate General Counsel, Outokumpu.
Outokumpu employees are suspected of an aggravated accounting offence and gross forgery. With regard to the company itself, the crime suspicion relates to gross forgery.
In connection with the final statement, Outokumpu eventually gained access to the information that the Customs had acquired to support its crime suspicions.
The Customs suspect Outokumpu Stainless Ltd, a part of the Outokumpu Group, of having taken part in a large-scale international swindle in selling steel to Russia. The suspicions date back to a period between May 2005 and March 2006.
The Customs believe Outokumpu has traded in stainless steel with manufactured firms registered in tax havens. Furthermore, the Customs suspect that forged documents have been used to avoid paying the Russian Customs fees, together with double bills to skip paying taxes.
“In our trading with Russia we have around ten clients, some of whom have been registered in tax havens. After the clients have paid their bills, we export the material to Russia in accordance with the established business practices. We always provide the Customs with correct information with regard to our trading”, Louhija says.
According to Louhija, foreign middle-man companies were used for the purpose of preventing the possible losses arising from the depreciation of the rouble. The bills were paid in US dollars.
“With our trading with Russia we always require advance payments. Therefore we have had no need to produce risk analyses regarding our clients by looking into their background. The payments have been received by our accounting department, which has recorded all the entries in due form”, Louhija continues.
In 2007, Outokumpu changed its trading practice with Russia. It no longer deals with middle-man companies and does not use forwarding agents, either.
“Through our Russian subsidiary we take care of the imports as well.”
In addition to Outokumpu, employees from a Lappeenranta-based forwarding company Saimaa Lines are also among the suspects in the criminal case.
The Customs believe the preliminary investigation material will be presented to the prosecutor for the consideration of charges by Midsummer.
Outokumpu press release 19.5.2009