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Authorities in Finland recorded a sharp increase in economic crime in 2024, with labour exploitation and bogus self-employment becoming permanent features of the country’s shadow economy.
According to new figures published on Thursday by the Finnish Tax Administration and partner agencies, the police registered 2,619 economic offences last year, a 10 percent rise from 2023 and the highest annual total on record. Offences committed by debtors and accounting-related violations made up 63 percent of all cases, up from 54 percent the previous year.
Investigations show that so-called “forced entrepreneurship” has become a widespread practice in sectors such as construction, cleaning, car repair, and seasonal labour. This involves disguising employment relationships under the guise of entrepreneurship, shifting responsibility for employment costs onto the worker and enabling social security abuse.
“Disguised employment has become embedded in labour-intensive sectors. It is part of a broader trend of exploiting loopholes in employment and taxation rules,” said the Tax Administration in a statement.
Authorities also reported an increase in cases involving money laundering, identity theft, insurance fraud, and illegal cross-border money transfers. These complex schemes often require cooperation between agencies and can involve international actors, professional facilitators, and links to organised crime.
The construction, transport, hospitality, and seasonal work sectors were identified as high-risk areas, with foreign labour frequently involved in exploitative arrangements.
Bankruptcy and tax fraud on the rise
The number of bankruptcies surged in 2024, with 3,035 proceedings initiated — a 12.5 percent increase from the previous year. Corporate restructuring procedures also rose to 318 cases, up 3.9 percent.
The deterioration in financial conditions and rise in insolvency has driven more bankruptcy-related offences. These cases often require lengthy investigations and may not be resolved quickly, officials noted.
The Tax Administration carried out 612 shadow economy tax audits in 2024, recovering €125 million in taxes and penalties. Auditors reported that misuse of invoicing services, identity fraud, and digital payment systems have made enforcement more challenging.
Increased use of virtual banking and “light entrepreneurship” services has also contributed to the rise in unregulated labour and unreported income, particularly in informal and subcontracted roles.
Joint inspections and broader enforcement
A total of 1,928 inspections were conducted by the Regional State Administrative Agency (AVI) targeting companies employing foreign workers, marking an increase in coordinated operations involving multiple agencies.
Kela, Finland’s social insurance agency, filed 562 criminal complaints related to suspected benefits fraud worth €4.3 million. These cases commonly involved forged documents and undeclared wages.
The Finnish Centre for Pensions reviewed the insurance arrangements of 3,691 employers and found errors affecting 1,540 employees across 268 businesses.
Customs officials also investigated 404 cases of tax fraud, much of it connected to cigarette smuggling. Seizure rates and reported cases rose significantly.
Prevention efforts and new tools
Authorities continue to implement a national action plan to combat the shadow economy and economic crime. The programme supports collaboration between agencies, promotes fair business practices, and enhances data sharing and oversight.
The Tax Administration warned that as economic pressures grow and bankruptcies rise, the risk of financial misconduct will remain high.
The latest figures are available on the Grey Economy and Economic Crime website maintained by multiple Finnish public authorities.
HT
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Source: www.helsinkitimes.fi
