Police investigate suspected tax fraud scam in wood sales
Money paid to Russia funnelled back to Finland through tax havens
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The eastern regional unit of the National Bureau of Investigation (NBI) is investigating allegations that money paid to Russia for wood may have returned to Finland after passing through tax havens.
Martti Kemppainen, head of the Mikkeli unit of the NBI, says that the target of the investigation is a suspected aggravated tax fraud by a person employed in the forest industry.
The investigation has been painstaking, as the requests for help made to Russian authorities have taken time. According to a television programme in the Spotlight series on YLE television, the suspect has worked in a listed company. The programme does not reveal the company’s name.
The NBI has long investigated timber sales between Finnish forest industry companies and Russian wood sellers. Forest companies have been suspected of circulating part of the purchase price of wood to foreign tax havens, with only part of it going to the Russian sellers.
The suspected return of the money to Finland is a new development.
Finnish tax authorities say that Russian officials are the main victims of the fraudulent activities, but payment of Finnish taxes are also avoided in the scam. Another aim is to avert the mandatory exchange of money repatriated into Russia into roubles.
The investigation is encumbered by the fact that the companies and individuals suspected of tax evasion have usually not been domiciled in Finland. The fact that in this case, the suspect lives in Finland, was the key factor in launching the investigation.
The Spotlight programme, which airs Wednesday evening on YLE’s mainly Swedish-language FST5 television network, examines Finnish listed companies which have subsidiaries in tax haven countries. According to the programme, Wärtsilä, Konecranes, Neste, UPM, Outokumpu, and Rautaruukki have set up such subsidiaries.
It is quite legal to own a company in a tax haven, and to use it in business operations. Problems arise, however, from the efficient protection given by the laws of tax haven countries to their administration and business activities.
Some listed companies say that their tax haven subsidiaries were needed for temporary business activities, and that they are no longer in use.
Even the state-owned energy company Fortum once set up a subsidiary on Guernsey, with which it dealt with the financing of a power plant for Stora Enso.
Helsingin Sanomat
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| 28.1.2009 - TODAY |
 Police investigate suspected tax fraud scam in wood sales |
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