Preparation of legislation banning the acquisition of real estate by Russian citizens
According to the Programme of Prime Minister Petteri Orpo’s Government, the Government will examine the adequacy of the regulation on the acquisition and possession of real estate by parties outside the EU and the EEA. The Government will also examine possibilities to engage in more effective ex post facto intervention and control in respect of assets that are central to the security of society and security of supply.
Minister of Defence Antti Häkkänen appointed a cross-administrative working group on 17 November 2023. Its task was to assess the possibility of a total ban on the acquisition of real estate by Russian communities and Russian citizens and to prepare related legislation.
The working group finalised its report on 16 May 2024. According to the report, no permit to buy real estate should be granted to persons whose country of nationality has been found by the European Union to be in violation of the territorial integrity, sovereignty and independence of another country or whose country of nationality may be a threat to Finland’s national security. This ban would also apply to entities that are domiciled in the territory of such a country, owned, or influenced by citizens or entities of such a country.
The purpose of the proposed provisions is to prevent hostile broad-spectrum influencing by means of property owned in Finland as foreign real estate ownership can be exploited to prepare hostile action against the Finnish society. Such action can be used against the Finnish economy, infrastructure, businesses and security of supply or against Finland’s self-determination and capacity to provide security for its population.
The working group’s report was sent out for comments on 2 September 2024. The legislative proposal is due to be submitted to Parliament before the end of this year.
Questions and answers
- As a result of Russia's full-scale illegal war of aggression against Ukraine, a fundamental change has taken place in the security and operating environment of Finland and Europe
- The purpose of the ban is to prevent hostile broad-spectrum influencing by means of property owned in Finland
- Real estate can be used in a manner that threatens Finland's national security over a long period of time, and the permit procedure cannot fully anticipate all threats that may arise.
A permit to acquire real estate would not be granted to a person whose only country of nationality or all the countries of nationality
- the Council of the European Union has found by its decision to have violated the territorial integrity, sovereignty and independence of another state or
- who may pose a threat to Finland's national security.
- These states would be determined by government decree.
Permits would not be granted to
- a corporation domiciled in the territory of a state referred to in the Government Decree
- an entity controlled by the nationals of the country subject to the ban.
- This would not apply to persons with a permanent residence permit in Finland
- Persons with a permanent residence permit could acquire a real estate if the Ministry of Defence grants a permit for the acquisition
- This would not apply to persons who are not currently subject to the permit procedure
- Dual citizens would remain outside the ban.
- The proposal is due to be submitted to Parliament towards the end of 2024.
- The act would contain the necessary transitional provisions.