Shady Estonian companies pose problems for Finnish builders

Finnish-run shady operators leave taxes, and sometimes wages unpaid

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Cheap competition from Estonia is causing problems for many Finnish construction companies, who are finding it difficult to compete with the shady business practices of many of the Estonian firms.
      Estonian companies involved in the questionable dealings are often run by Finns. The standard practice is to flout the law as long as possible, and when the company is caught doing something illegal, the employees are simply moved to another company that the same people have set up, and operations resume from a clean slate.
     
The recession has brought nearly all construction in Estonia to a halt.
      Kyösti Suokas, deputy chairman of the Finnish Construction Trade Union, says that nearly all capable Estonian builders now work in Finland. The workers are often underpaid, and often no taxes, or social insurance contributions are paid, he says.
      He says that small Finnish construction companies are desperate, because it is impossible to compete with companies registered in Estonia.
      “Medium sized companies also say that it is impossible to get subcontracting work, because they cannot compete with companies registered in Estonia”, Suokas says.
     
“Supervision by officials is so haphazard that it doesn’t even work as a deterrent”, laments Suokas.
      He says that Finnish tax authorities have no idea if foreign workers sent to Finland pay any taxes at all.
      “The only risk for a company that is caught is that it will have to pay the fees that it should have been paying in the first place. There is no punishment.”
      The Construction Trade Union has learned of cases in which a company that has been caught for failing to pay wages has complied and paid the missing money, only to later demand that the employee return the money in order to keep his job.
     
Director Tapio Kari of the Confederation of Finnish Construction Industries RT confirms the union’s observations about shady companies operating from Estonia.
      “Criminals need to be brought under control one way or another, because it is a market disturbance affecting companies that operate honestly.
      Shady companies are most common on small construction sites.
      “Supervision is difficult. We feel that it should be headed by officials”, Kari says.


Links:
  Finnish Construction Trade Union
  Confederation of Finnish Construction Industries RT

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