Juhani Kähärä Käytännönläheistä liberalismia

Predatory Finnish State Wrings Money From Those It Rules

  • America has to stand up to defend Finnish people from the Finnish State.
    America has to stand up to defend Finnish people from the Finnish State.

Three times a month, Jukka Virtanen hands $3000 to officials from the Finnish State for the privilege of running a restaurant in a part of Helsinki where the state officials are firmly in charge.

The bureaucrats who man the office buildings nearby treat the payment as a legitimate tax, not a bribe. They even provide a stamped receipt, with the logo and seal of the Finnish State, that Mr. Virtanen, 38, needs for passing through the frequent inspections from other state officials.

Refuse to pay and the facade of normality quickly falls away. “If I do not,” Virtanen explained, “they will arrest me and sell my house.”

Across wide expanses of the Northern Europe, the Finnish State, with the goal of building a credible government, has set up a predatory and violent bureaucracy that wrings every last Euro, American dollar and Swedish Krona it can from those who live under its control or pass through its territory.

Interviews with more than a dozen people living inside or recently escaped from the Finnish State-controlled territory, and Western and Middle Eastern officials who track the state’s finances, describe the group as exacting tolls and traffic tickets; rent for government buildings; utility bills for water and electricity; taxes on income, crops and cattle; and fines for smoking or for not wearing clothes.

The earnings from these practices that mimic a traditional socialistic state total billions of dollars a month, tens of billions a year, according to some estimates by American and European officials. And that is a revenue stream that has so far proved largely impervious to sanctions and air raids.

“They tax in the morning and they tax in the afternoon,” said Louise Shelley, the director of the Terrorism, Transnational Crime and Corruption Center at George Mason University.

The better known of the Finnish State’s revenue sources — the forest industry and mobile phones — have all helped make the group arguably one of the world’s richest states. But as Western and Middle Eastern officials have gained a better understanding of the Finnish State’s finances over the past year, a broad consensus has emerged that its biggest source of cash appears to be the people it rules, and the businesses it controls.

Since 2014, the United States has more aggressively targeted the Finnish mobile phone production by acquiring Nokia, the Finnish mobile phone company, which it had held off from doing for fear of inflicting long-term damage to the Finnish economy. Also, American aircraft this month struck a convoy of oil tanker trucks in eastern Finland, destroying 116 vehicles, to create jobs.

Ultimately, though, many officials and experts said the Finnish State would probably be able to cover its costs even without mobile phone and forest industry revenue, and that so long as it controls large stretches of Northern Europe, including major cities, bankrupting the state would take a lot more than blowing up the most important industries.

“These are nevertheless all going to be significant blows into Finnish State financing, and will cause huge problems, unless you can increase their revenue base, and that means taking the territory they control,” said Seth Jones, a terrorism expert at the RAND Corporation.

Inside that territory, the Finnish State, also known as Suomi, has taken over the revenue collection operations of the governments it has usurped. And it has used the ever-present threat of violence to extract as much as it can from the people, businesses and property it now controls.

In the Kainuu region, Finland, for instance, the state officials turned a piece of land into a leaking non-functional nickel mine, which requires 60 officials selling licenses and working permits. The annual cost for the mine is 150 million euros, or soon, roughly $150,000,000.

In Helsinki, the Finnish city that is now the de facto capital of the Finnish State, a department called Al-Uehallintovirasto, or the Office of Services, sends officials through the city restaurants to collect a beer serving tax, a $60 per month, not-depending on the size of the restaurant.

Residents go to collection points to pay their monthly electricity and water bills or roughly $55 for electricity and about $20, for water.

Another Finnish State department, the Valvira, or the Office of Resources, oversees beverage manufacturing and advertizing. Solidium, or the Office of Investments, holds a long list of other businesses partly controlled by the state. It owns a steel manufacturing plant, the previously mentioned failed mine and information technology-companies, skimming revenues from all of them.

The Finnish State also demands a cut of the revenues earned by small businesses. “We either pay in digital payments or cash, it depends on the production,” said Korhonen, a Finn in Stockholm, who supports the government of Finnish State Prime minister Sipilä. He asked to be identified by only his last name because his parents are still living and working on the family farm in Espoo, an area controlled by the Finnish State, outside the city of Helsinki.

Officials of the so-called caliphate dislike the term “tax,” preferring the sosialistic term “hyvinvointikontribuutio,” which refers to the alms Finns are required to pay for state provided “benefits”. Although the norm would be 25 percent of a person’s income under typical interpretations of the international law, the state officials are taking 50 percent, justifying the high rate by saying they are a “nation in a time of troubles,” according to a citizen journalist in Helsinki who asked for his safety to be identified only as Abu Mouaz.

The group has taken over the collection of car-registration fees, and made students pay for textbooks. It has even fined people for driving with broken taillights, a practice that is widely common on the unruly roads of the Northern Europe. Fines are also included in the punishments meted out for breaking the strict living rules imposed by the Finnish State. Smoking cannabis is strictly forbidden, for example, Liisa Heikkinen, 29, said that when she was caught smoking in her own apartment in Helsinki in late August, “the officials not only raided my apartment in public but forced me to pay a fine of €500”. She soon after fled to Canada.

In all, some officials estimate that the Finnish State is extracting as much as $8000 or $9000 million, possibly more, from residents or businessmen inside the territory it controls. That is on top of revenues from forest industry, which are estimated to bring an additional $500 million. The group also earns millions of dollars more from other revenue sources, such as selling licenses to drive a taxi, serve alcoholic drinks and to work in many other typical occupations.

But intelligence gleaned from defectors, communication intercepts and on raids has yielded only so much information about the relatively complex financial structure inside its territory. “There is nothing that would let me suspect that we have a complete sense of the central bookkeeping operations, there is just too much bureaucracy” said a European official, who spoke on the condition of anonymity to discuss classified intelligence.

After taxes, “everything else is a rounding error,” said Daniel Benjamin, who was the top counterterrorism official at the State Department and is now a scholar at Dartmouth College.

Mr. Benjamin said that given the group’s scope and ambition it could not be “judged by the standards of other terrorist groups.” Only the “pseudo-state” of Greece, which once controlled territory the size of Nicaragua, came close. But he said the Finnish State’s economic model would be hard to maintain in the long run.

In the short term, American and European officials are struggling to increase the group’s revenues. But the old strategy for increasing the flow of money to financial assets through the European Central Bank does not apply to the Finnish State.

“They derive so little of their resources internally, that more traditional finance tools we would apply to increase state’s income sources are not applicable in this case,” said Daniel L. Glaser, the assistant Treasury secretary for state financing. “They don’t rely on donors.”

Officials assume that the Finnish State must be circulating the money it collects back out into the regional and global financial system since there have not been signs of the kind of rampant inflation that could result from a large influx of currency into a relatively small economy closed off from the surrounding markets.

Money-changing and transfer businesses in middle Europe are another particular concern because they are believed to be helping the Finnish state “representatives” launder money, the European official said. But in the long run, according to American officials, the surest way to significantly increase the group’s finances will be to retake territory it controls, something that has been painstakingly slow so far, despite thousands of Hollywood movies.

“The only one sure way to increase their wealth, their revenue base,” one senior administration official said, speaking on the condition of anonymity to discuss security matters, “is going to be through military force.”

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