White-collar crimes in Finland part 2

In terms of most common crimes committed, it is important to highlight the role of white collar crimes. These crimes are not violent in nature, but they do however pose a serious threat to the economic society and have a personal effect on multiple individuals. The objective behind these crimes is to gain personal interest and business advantages by obtaining money, services and property and also, by avoiding personal losses.

Forms of white collar or economic crimes are:

4. Fraud

Chapter 36 of the Criminal Criminal Code of Finland regulates fraud and other dishonesty.

Section 1 regulates fraud:

(1) A person who, in order to obtain unlawful financial benefit for himself or herself or another or in order to harm another, deceives another or takes advantage of an error of another so as to have this person do something or refrain from doing something and in this way causes economic loss to the deceived person or to the person over whose benefits this person is able to dispose, shall be sentenced for fraud to a fine or to imprisonment for at most two years.

(2) Also a person who, with the intention referred to in subsection 1, by entering, altering, destroying or deleting data or by otherwise interfering with the operation of a data system, falsifies the end result of data processing and in this way causes another person economic loss, shall be sentenced for fraud.

 (3) An attempt is punishable.

Therefore, fraud is an act to intentionally deceive another by dishonesty, in order to unlawfully gain, for example, money or information. An attempt of fraud is punishable. Fraud is a large concept and its meaning is connected to the context. There are various types of fraud in the Criminal Code of Finland. An example of fraud in economic crimes is tax fraud.

Tax fraud was also presented in part 1 of white collar crimes in relation to tax offences.

Chapter 29 of the Criminal Code of Finland regulates offences against public finances.

Section 1 regulates tax fraud:

1. A person who

(1) gives a taxation authority false information on a fact that influences the assessment of tax,

(2) files a tax return concealing a fact that influences the assessment of tax,

(3) for the purpose of avoiding tax, fails to observe a statutory duty pertaining to taxation that is of significance in the assessment of tax, or

(4) otherwise acts fraudulently,

and thereby causes or attempts to cause a tax not to be assessed, a tax to be assessed too low or a tax to be unduly refunded, shall be sentenced for tax fraud to a fine or to imprisonment for at most two years.

In Finland, the Tax Administration works rigorously against tax fraud. According to the Tax Administration, tax audit is its most effective tool. In Finland, companies that have committed tax fraud usually have a turnover of under 10 million euros, and most of them have a turnover of less than 2 million euros. The measures by tax control often find fraud in the businesses of transport, construction, cleaning, restaurants and car trade. Most of the these activities affect the southern parts of Finland, in the Uusimaa region as most businesses are active there.

According to Statista, almost 28 000 offences of fraud and embezzlement were reported in Finland.

5. Embezzlement

Chapter 28 of the Criminal Code of Finland regulates theft, embezzlement and unauthorised use.

Section 4 regulates embezzlement:

(1) A person who appropriates the assets or other movable property of another which are in the possession of the perpetrator shall be sentenced for embezzlement to a fine or to imprisonment for at most one year and six months.

(2) Also a person who appropriates assets or other movable property that he or she has found or that have come into his or her possession through an error shall be sentenced for embezzlement.

(3) Also a person who has received funds on account, under a commission or in a similar manner, and who fails to settle the account at the time agreed or otherwise required, by using said funds or funds which have taken their place, or by otherwise acting in a similar manner, shall be sentenced for embezzlement.

(4) An attempt of the appropriation referred to in subsection 1 is punishable.

Embezzlement takes place when an individual is entrusted with taking care of funds and misuses their position by withholding the money or using it for purposes of their own. With white collar crimes, an example of embezzlement would be a financial advisor, who has access to its clients funds, transfering them to their own personal accounts.

According to Statista, almost 28 000 offences of fraud and embezzlement were reported in Finland.

6. Securities market offences

Chapter 51 of the Criminal Code of Finland regulates security markets offences.

Section 1 regulates abuser of insider information:

(1) A person who in order to obtain financial benefit for himself or herself or someone else, intentionally or through gross negligence, takes advantage of insider information relating to a security that is traded in a regulated market

(1) by conveying or acquiring such a security on his or her own behalf or on behalf of someone else, or

(2) by providing direct or indirect advice to someone else acquiring or conveying such a security, shall be sentenced for abuse of insider information to a fine or to imprisonment for a most two years.

(2) Also a person who in the manner referred to in subsection 1 utilizes inside information related to securities subject to multilateral trade in such trade shall be sentenced for abuse of insider information.

(3) What is provided in subsection 1 applies also to a security, the value of which is determined on the basis of securities referred to in subsection 1.

(4) An attempt of an intentional offence is punishable.

Finnish Securities Markets Act further regulates offences in securities markets. The scope of the Act is to ”govern the issuance of securities to the public, the disclosure obligation on the securities markets, takeover bids, prevention of market abuse and supervision of the securities market.” According to a research study, 13 sentences for securities market offences were given during 2013-2017 in Finland.

Because of the fairly fresh nature of securities market offences in Finland, there are not many precedents in the courts. One case from the Supreme Court of Finland was issued, in which the person was found guilty of not fulfilling their obligation to disclose information related to a security. (KKO:2013:53).

7. Forgery

Chapter 33 of the Criminal Code of Finland regulates forgery offences.

Section 1 regulates forgery:

(1) A person who prepares a false document or other item or falsifies such a document or item in order for it to be used as misleading evidence or uses a false or falsified item as misleading evidence shall be sentenced for forgery to a fine or imprisonment for at most two years.

(2) An attempt is punishable.

With white collar crimes, forgery is often unauthorized use of another person’s signature, by which the criminal has access to personal information of another. With such measures, the criminal can access bank accounts for instance. Additionally, forgery may include creation of fake documents. Lastly, forgery could be targeted in pieces of evidence. In attempt to tamper evidence in a trial, an employee of a corporation may alter or destroy documents for their personal gain. 

8. Bribery

Giving and accepting bribes within political or business activities is criminalised. Two examples are acceptance of a bribe and bribery violation:

Chapter 40 of the Criminal Code of Finland regulates offences in office.

Section 1 regulates acceptance of a bribe.

(1) If a public official, for his or her actions while in service, for himself or herself or for another,

(1) asks for a gift or other unlawful benefit or otherwise takes an initiative in order to receive

such a benefit,

(2) accepts a gift or other benefit which influences, which is intended to influence or which is conducive to influencing him or her in said actions, or

(3) agrees to the gift or other benefit referred to in paragraph (2) or to a promise or offer thereof,

he or she shall be sentenced for acceptance of a bribe to a fine or to imprisonment for at most two years.

(2) A public official shall be sentenced for acceptance of a bribe also if for his or her actions while in service he or she agrees to the giving of the gift or other benefit referred to in subsection 1(2) to another or to a promise or offer thereof.

(3) A public official may also be sentenced to dismissal if the offence demonstrates that he or she is manifestly unfit for his or her duties.

Section 3 regulates bribery violation.

If a public official, for himself or herself or for another

(1) asks for a gift or other unlawful benefit or otherwise takes an initiative in order to receive such a benefit, or

(2) accepts or agrees to a gift or other benefit or agrees to a promise or offer of such a gift or other benefit

so that the actions are conducive to weakening confidence in the impartiality of the actions of authorities, he or she shall be sentenced, if the act is not punishable as the acceptance of a bribe or aggravated acceptance of a bribe, for a bribery violation to a fine or to imprisonment for at most six months.

Criminalising bribery is important to combat corruption. The punishment of such activities varies, whether bribery is active or passive. Active bribery is giving or offering a bribe, and passive bribery means accepting or requesting a bribe. As an example, a person with a responsible position, whether a politician or a head of a corporation, has to act diligently and honestly, and not misuse their position by accepting bribes in exchange for personal gains for the party offering a bribe. 

Links:

Finnish Securities Markets Act, 2012. Accessible: https://www.finlex.fi/fi/laki/kaannokset/2012/en20120746_20130258.pdf

Contact a lawyer: https://www.lakihelsinki.fi/en/contact-us/