Finnish authorities are tightening scrutiny of real-estate purchases after a series of Russian-linked property deals raised fears that land and buildings near military facilities and critical infrastructure could be used for espionage or sabotage, according to a recent report by Bloomberg. 

One attempted purchase that helped crystallize those concerns in recent years: a partially derelict former nursing home in Kankaanpää, in southwestern Finland, that three Russian nationals sought to buy in October 2022 for about 15 times its prior sale price. The 100-room site, which included a commercial kitchen and a morgue, was described by the buyers as intended for “recreational use,” Bloomberg reported.

Finland’s Ministry of Defense blocked the transaction after an investigation, according to the report, which  noted that the property lies about 7 kilometers from the Niinisalo garrison, a key artillery training site and home to the country’s largest army unit, and a base open to U.S. troops under Finland’s defense cooperation agreement with Washington.

The case came as Finland reassessed years of openness to Russian capital following Moscow’s full-scale invasion of Ukraine in 2022. While many Russian transactions involved ordinary home or holiday purchases, Finnish officials and security experts have grown concerned about acquisitions near military bases, airfields, weapons depots, telecommunications and transport links, and other strategic sites, according to the news agency. 

“In peacetime, properties can appear harmless until the moment they are activated,” Defense Minister Antti Häkkänen told Bloomberg, saying Finland had observed in Ukraine that Russian-owned property was used for intelligence gathering, sabotage and pre-positioning of supplies. Häkkänen warned that if tensions rise, “it is already too late to start closing the gaps,” Bloomberg said.

Finland changed its law in 2020 so that non-EU or non-EEA citizens must obtain permission from the Ministry of Defense to buy property, and the Kankaanpää nursing home case was the first transaction blocked on national security grounds. Risk assessments consider both location and the buyer’s background and motivation, with multiple agencies looking for patterns and “weak signals,” according to the report. 

Under current law, Russian and Belarusian nationals are banned from buying property unless they hold a permanent Finnish or long-term EU residence permit. Häkkänen told Bloomberg the measures target state methods rather than individuals, framing property acquisitions as potentially part of “hybrid” tactics aimed at destabilization.

But Finnish authorities face the challenge of assessing thousands of existing Russian-owned properties, while balancing property rights and the costs of intervention. Finland can seize a property if there is evidence of activity that threatens national security, Bloomberg reported.

Finnish officials and experts remain concerned about potential workarounds, including dual citizenship, purchases via EU/EEA partners, leasing arrangements, share purchases in residential apartments, and the use of companies or proxy buyers. 

The news report also recounted a prominent case involving Airiston Helmi, a company majority owned by Russian businessman Pavel Melnikov, whose properties near the Åland Islands and subsea cables were raided by police in September 2018 as part of an investigation into alleged money laundering and other financial crimes. 

Read more at Bloomberg