Crime prevention

Police | Customs | National prosecution authority | Ministry of Justice

Economic downturn reflected in the investigations of economic crime – the police registered a record number of economic offences

Source: Police

In 2023, the police registered a total of 2,391 economic offences, which is about 15% more than in 2022 and an all-time record. The number of different types of crime also increased by 12% from 2022, and 4,373 different types of crime were registered. The number of open criminal cases (3,946) increased by almost 13% from the previous year (2022: 3,497). The number of open cases of economic crime has been on the rise for several years and this is reflected in a growing workload of crime investigators and long processing times. As the financial situation of companies is weakening and the number of insolvencies is on the rise, the risk of economic offences reported to the police remains high in the near future.

Economic crime has both direct economic impacts and extensive indirect impacts on society at large and for this reason, investigating them is important. In 2023, the police used coercive measures to recover a considerable amount of assets (€24.5 million) in connection with the investigations of economic crime. In 2022, the figure had been €26.5 million. The figures describing the proceeds of economic crime and criminal damage arising from this type of crime clearly show that economic crime causes significant harm to society at large. Over the past ten years, the damage caused by economic crime each year has averaged €195 million. In the cases of economic crime closed last year, the damage totalled about €147 million. The damage caused by an offence is not always at the same level as the proceeds it generates – an environmental offence generating only small proceeds may nevertheless cause significant environmental damage.

Financial misconduct in companies reflected in a growing number of aggravated economic offences

Economic misconduct by companies and persons connected with them typically manifests itself in debtor’s offences, tax and accounting offences, embezzlement, counterfeiting and different types of fraud. In 2023, there was a particularly steep increase in aggravated accounting offences, tax offences, offences involving dishonesty of a debtor, subsidy fraud, embezzlement and counterfeiting compared to 2022.  Debtor’s offences and tax and accounting offences are common economic offences and they account for a large proportion of the economic offences reported to the police each year.  In 2023, they accounted for 54% of all economic offences registered by the police. The measures taken by the crime prevention authorities, extensive offences uncovered by the police and changes in registration practices impact the manner in which the police compile statistics on types of crime, and they also cause occasional variation in the values.

Customs protects tax revenues, combats the shadow economy, and uncovers and investigates economic crime

Source: Customs

The taxes collected by Customs in 2023 for the EU and the State of Finland amounted to approximately 0.3 billion euros. The statistics illustrate the impact of tax collection, and both administrative and crime prevention operations by Customs. Customs statistics should be examined by comparing them with the observations and statistics of other authorities presented in this overview. This makes it possible to determine the correct scale and weight of issues and phenomena. 

Customs promotes fair competition and takes effective action against irregularities

Customs controls goods and collects taxes on them. Customers can only take possession of goods after paying taxes and duties, except for credit customers.

In combating economic crime, Finnish Customs still encounters a high degree of circumvention of the sanctions against Russia and Belarus imposed by the EU due to the war in Ukraine, as well as international economic crime involving e-commerce and intra-EU trade. The Internet is also being used increasingly often in the marketing and sales of highly taxed products to customers, while also circumventing the tax provisions applying to such products.

Customs focuses its control measures on operations associated with substantial tax interests. Real-time customs controls of various modes of transport and related goods, vehicles and passenger flows also play a central role in ensuring correct taxation and, consequently, combating the tax gap. The measures for preventing economic crime that fall under the investigative responsibilities of Customs also aim at reducing the tax gap.

The percentage of unpaid taxes relative to total taxes and parafiscal charges varied between 0.05 and 2.1% in 2013–2023. In 2023, the amount of tax arrears came to about 1.0 million euros, which is 1.2 % of the approximately 0.3 billion euros of the total taxes and parafiscal charges collected by Customs (Figure 1). 

Customs conducts corporate audits and document controls

The audits carried out by Customs ensure the fiscal correctness of customs and taxation matters, facilitate and safeguard smooth foreign trade, and protect society by for instance weakening opportunities for shadow economy operations.

The audits carried out by Customs in 2023 covered customs procedures, fairway dues, agricultural and internal market aid paid by the EU, and the tax border between Åland and mainland Finland. In addition, Customs still carries out controls of tax warehouses relating to excise duties on behalf of the Tax Administration.

Audits are nationwide and Customs carries them out in real time, as well as before and after actual cases to be examined have occurred. In addition to corporate audits and document controls, Customs also performs for example warehouse controls, as well as controls of accounting and goods. Audits and controls are based on risk analysis or take place on a statutory basis. Risk-based target selection is supplemented by random sampling.

A corporate audit covers the operations, organisation, administration, internal control, business systems and accounting materials of a company. Most corporate audits involve a company visit. A corporate audit may be conducted before a licence, permit or status is granted, or before approval of a change in a licence or permit. The purpose of a subsequent corporate audit is to review the company’s operations and the correctness of its business transactions and customs declarations after a customs clearance or taxation.

Document controls comprise controls on business transactions carried out after customs clearance or the taxation process. Usually, the controls are targeted at a large number of decision on customs clearance or taxation. The number of document controls also includes controls involving authorisations and administrative mutual assistance.

In 2023, Customs conducted a total of 318 corporate audits and document controls (figure 2). Annual variation in the number of audits and controls is the result of the priorities approved for the audits and controls each year, the areas audited and controlled, and the increasing use of electronic materials. In 2023, customs procedure audits focused on import and special procedures.

The total amount of debited taxes based on post-clearance recovery resulting from tax audits was 3.1 million euros at the end of 2023. Annual variation in the amount of post-clearance recovery depends on the auditing and control priorities, risk analysis and critical selection criteria used in the selection of entities, the proportion of entities subject to statutory audits and controls, the size of the companies audited and controlled, and the scope of audits and controls. Even a single larger audited entity or a major error will have a significant impact on the annual post-clearance recovery total.

A total of 17 corporate audits and document controls were carried out in 2023 on shadow economy targets. These were based on either a criminal offence, the AM communications of OLAF, or requests for preliminary investigation. 

Counterfeit goods

Customs supervises goods infringing intellectual property rights pursuant to Council Regulation (EU) 608/2013. The purpose of the supervision is to protect customers from exposure to products that may endanger their health and safety, as well as safeguard tax revenue and the financial interests of rights-holders. The controls are largely based on cooperation between Finnish Customs and rights-holders, as the crimes involving counterfeit goods that infringe intellectual property rights are complainant offences. Most of the counterfeit products detained by Customs infringe a registered trademark or design. Products that infringe patents are also occasionally detained. The supervision takes place in connection with, for example, physical inspections.

The number of counterfeit goods detained by Customs and their calculated value have been decreasing (figure 3) between 2013 and 2023. The fluctuation in the number of detained counterfeit goods and their value is completely normal and strongly connected to the resources available at the time. The long-term trend clearly indicates a decline in large-volume detentions. This is because there is currently no eastbound transit traffic, which means that Finland is no longer a transit country for counterfeit goods. Today, detentions are completely focused on postal and express freight traffic, and these now reflect the situation of counterfeit goods in Finland better than before. The increase in online trade has a significant effect on the import of counterfeit goods. Online purchases are mostly transported in postal or express packages, which in turn has a direct effect on the size of the shipments, i.e., they are mostly small. A similar trend has been observed in other EU countries.

The large volumes of postal traffic make controls challenging. Identifying counterfeit goods requires a more detailed inspection of the goods, and usually, X-ray imaging is not helpful, as it does not show trademark markings, for example. More than 95 % of the articles detained in Finland infringe a registered trademark. With the volume of packages constantly increasing, the resources allocated to supervising postal traffic have not permitted Customs to focus on the identification of counterfeits among arriving goods.

Investigation of economic crime

Customs investigates suspected economic offences that fall under its jurisdiction. Economic crime refers to crime that is committed in connection with legal business operations with the aim of obtaining financial gains. The main offence usually involves tax fraud or aggravated tax fraud. Customs also investigates offences involving forgeries, as well as offences involving customs clearance, the environment and accounting. Customs also classifies the smuggling of products subject to excise tax (alcohol, snus and cigarettes) as economic crime when it is comparable with business and professional activity, and even when it is not disguised as business activity.

The societal impact of economic crime prevention by Customs in 2023 amounted to 103.2 million euros, while the figure for the previous year was 18.2 million euros (figure 4). The impact comprises the sum of damages resulting from the cases investigated, i.e. evaded taxes, damages resulting from cases under or pending investigation (sequestration and prohibition of transfer), assets recovered by Customs, and assets assigned to the distraint authority or another official. The value of recovered proceeds of economic crime totalled 8.2 million euros. In the previous year, the amount was 2 million euros. The amount of recovered proceeds of crime varies from year to year.

In 2023, Customs investigated a total of 633 tax fraud cases, which is 51 cases more than in 2022. A total of 107 cases of aggravated tax fraud were detected, which is 15 cases less than the previous year. Customs collaborates with the Tax Administration and law enforcement authorities in other countries to combat the growing phenomenon of Intra-Community VAT fraud.

Ever since the Russian invasion of Ukraine, the sanctions against Russia and their suspected evasion have been a significant phenomenon. In 2023, some 8 000 cases of goods transports between Finland and Russia were processed under monitoring of sanctions based on customs declarations. Of these transports, Customs inspected more than 1 600. The number of regulation offences has increased significantly since 2022. In 2023, Finnish Customs registered 492 regulation offences, of which 58 cases were investigated as suspected aggravated regulation offences. In previous years, Finnish Customs has only investigated rare cases of regulation offences. Through effective export controls, Customs will ensure for its part that the common EU foreign and security policy measures are effective, and that the objectives set out for them are achieved in full.

The prosecutor's duty is to enforce criminal liability.

In the case of shadow economy phenomena, this means that the prosecutor decides whether there are grounds for deeming that the preconditions of a criminal offence have been met. As a rule, the prosecutor must press charges when there are probable grounds for doing so on the basis of the evidence gathered in the pre-trial investigation. A criminal case is initiated in a District Court on the basis of an application for a summons and progresses to the main hearing after the related preparations.

District courts decide cases of financial crime as the court of first instance

Source: Ministry of Justice

The number of cases of financial crime decided by district courts has remained level in recent years. The most common financial offence decided by district courts is aggravated accounting offence. Aggravated accounting offences are often connected to other offences, such as aggravated tax fraud. The handling time of a financial offence is influenced by factors such as the scope of the case. The median handling times of cases in district courts range from approximately 150 to 300 days, depending on the type of offence.

In 2023, the number of criminal cases submitted to district courts was roughly 3% lower than in the previous year. The median of processing times for all criminal cases increased slightly but is approximately at the level of 2021.

More information about the processing of criminal cases in general: Financial statements of the National Courts Administration (in Finnish only, summary in Swedish) [.fi]›.

Page last updated 4/11/2024