NordenBladet — Finland is strengthening the rule of law activities in developing countries. Supporting democracy and the rule of law is a key goal in the Government Programme and the development policy of Finland. In recent years, development of the rule of law has considerably weakened in different parts the world. Development of the rule of law is subjected to growing challenges that are exacerbated further by the COVID-19 pandemic.
Work to promote and strengthen the rule of law is increasingly important.On Monday, 8 March 2021, Minister for Development Cooperation and Foreign Trade Ville Skinnari and Rector of the University of Helsinki Sari Lindblom signed a cooperation agreement to establish the Rule of Law Center.
“Finland is a strong state governed by the rule of law; demand for our know-how is growing abroad and we want to offer solutions. Promoting the principle of the rule of law and fostering democracy also play a key role in our foreign and security policy and our development policy. The Rule of Law Center established today with the University of Helsinki acts as a valuable network domestically and as a central messenger of Finland’s strengths abroad,” says Minister Skinnari.
The aim of the Rule of Law Center, which operates within the University of Helsinki, is to support developing countries in creating and reinforcing the foundation of the rule of law, in developing the functional capacity of the rule of law institutions, and in strengthening legislation by providing expertise, training and other support. The activities of the Center are financed from development cooperation funds. The Rule of Law Center brings together experts on the rule of law in Finnish society and supports their networking.
“As part of the University of Helsinki, the Rule of Law Center also promotes research and teaching on the rule of law matters for the needs of developing countries. Empowered by science, the University of Helsinki wants to work for the good of the world, and the Rule of Law Center is the best way to support this objective,” Rector Lindblom says.
NordenBladet — Arranged by the Ministry for Foreign Affairs in collaboration with the Finnish Development NGOs Fingo and chambers of commerce, the ‘Development partners’ live broadcast series showcases development cooperation operators from various parts of Finland.
In the series, Minister for Development Cooperation and Foreign Trade Ville Skinnari takes a virtual tour around Finland and engages in discussions with various parties involved in development cooperation on the Ministry for Foreign Affairs’ Twitter and Facebook channels. The purpose of the discussions is to illustrate, through practical experience, what today’s development cooperation can be at its best: a partnership that promotes sustainable development goals and opens up opportunities for Finnish operators.
“Finland’s special competence provides us with an opportunity to be a forerunner and a development cooperation operator beyond its actual size. We also need to strengthen the joint synergies between trade and development to support the success of Finnish companies around the world. At the same time, it is important to renew and clarify our common concept of development cooperation,” says Minister Skinnari.
Each discussion involves a local company engaged in development cooperation and a representative of the NGOs. “The attainment of the goals of sustainable development, solving of complex development problems and promotion of a just world for each and every one of us calls for the contribution of all the operators involved. By building partnerships and cooperation between development organisations, companies and local operators in developing countries, we will be able to bear our global responsibility more comprehensively and learn from each others’ competencies,” says Annika Launiala, Director of Advocacy at Finnish Development NGOs Fingo ry.
The events are arranged under specific themes in different localities, taking into account the special characteristics of the regions concerned. Minister Ville Skinnari will discuss with experts on the impact of the energy sector, innovations, forest know-how and health technology on sustainable development goals.
“Many developing countries are already growth economies that need different kinds of competence and technologies to build sustainable growth in their society. Finland has a diverse range of such competence available, so it is good that experts in the fields of trade and development also work together to prepare cooperation with these countries,” says Timo Vuori, Executive Vice President for International Affairs, Finland Chamber of Commerce.In addition, the last broadcast in the series provides practical tips for companies that are interested in conducting business in developing markets.
Timetable and themes: Thursday 11 March 8.30–9.30 Development partners in Vaasa: Energy. Participating in the discussion: Petri Polvilampi, Director, Project Management, Wärtsilä Oyj; Jussi Laurikainen, Programme Adviser, World Vision, and Eva Nilsson, Doctoral Researcher, Hanken School of Economics
NordenBladet — Minister of Finance Matti Vanhanen highlighted Finland’s views on the use of the EU’s sustainable finance classification system in the forestry and energy production sectors. Minister Vanhanen discussed these matters with European Commissioner Mairead McGuinness on Friday 5 March.
The European Union has established a classification system (EU taxonomy) for determining what kind of investment is environmentally sustainable. The classification criteria are intended to facilitate sustainable investment and comparison of investments, and there will be a standard definition of sustainable investment at the EU level in the future. The sustainable finance classification system is based on the EU’s Taxonomy Regulation.
The European Commission is currently preparing lower level legislation (delegated acts) that will define technical criteria related to climate change for specific sectors and different economic activities. The Commission plans to publish the criteria in a delegated act in April, and implementation is to begin at the start of 2022.
“The criteria for sectors that are important to Finland, such as forestry, bioenergy and hydropower, need to be amended. The Commission must ensure that in forestry sustainability the ecological, social and economic dimensions are taken into account in a balanced way. I shall do my utmost to make sure the Commission understands our concerns. It is essential that the EU appreciates the significance of our forestry sector, for example, and the sustainable way in which forests are used here,” said Vanhanen. Next week Minister Vanhanen will discuss sustainable finance with the Commission’s Executive Vice-President, Frans Timmermans, and Commissioner Jutta Urpilainen.
NordenBladet — On Friday 5 March, the Government submitted a proposal to Parliament on introducing powers laid down in the Emergency Powers Act. The powers to be adopted through the decrees are related to directing the operations of healthcare and social welfare units and compliance with the time limits for non-urgent care. The Government would also adopt powers related to emergency communications and decisions on which authority has power in cases of ambiguity.
On Monday 1 March, the Government, in cooperation with the President of the Republic, declared a state of emergency in Finland due to COVID-19. Section 3, paragraph 5 of the Emergency Powers Act states that a widespread outbreak of a serious infectious disease, the effect of which is comparable to a major disaster, meets the definition of a state of emergency. In order to apply the powers laid down in the Act, the Government must first issue decrees on the use of the powers in question. Directing the operations of healthcare and social welfare units Section 86 of the Emergency Powers Act has to do with directing the operations of healthcare of social welfare units. Under this section of the Act, the Ministry of Social Affairs and Health and the relevant Regional State Administrative Agency may, through their decisions, oblige a healthcare and social welfare unit to modify its operations.This may be necessary if the COVID-19 epidemic weakens the functionality of the healthcare and social welfare service system to such an extent that the availability of services is significantly compromised. An additional condition for these decisions is that the measures already taken are not sufficient to ensure the availability of healthcare and social welfare services.
Municipalities may temporarily deviate from the time limits for non-urgent care
Under section 88 of the Emergency Powers Act, municipalities may be granted the right to deviate from the time limits for non-urgent healthcare in certain separately defined areas if this is necessary in order to provide urgent care.This will make it possible for healthcare units to transfer their resources from non-urgent healthcare to urgent care for people with COVID-19 and other types of urgent care.However, deviation from the time limits for non-urgent care must not put the health of patients at risk. Patient safety is the first priority in all circumstances. The right to deviate from the time limits does not affect the time limits for assessing the need for care.
Enhancing communications in emergency conditions
The Government will introduce the powers laid down in section 106, subsection 1 of the Emergency Powers Act in order to coordinate communications between different authorities and ensure citizen’ access to timely information. In line with the proposed decree, the Communications Department of the Prime Minister’s Office will manage the Government’s COVID-19 communications and coordinate communications concerning COVID-19 within the central government. In addition, the Communications Department will implement communications campaigns in cooperation with national and regional authorities. The aim is to provide citizens and communities with clear and understandable information on the development of the epidemic, the actions taken by the authorities to combat COVID-19 and the reasons for these actions. Communication can have a significant impact on the effectiveness of restrictive measures.
There is a great deal of false and misleading information out there about COVID-19 and vaccinations. At its worst, this information may threaten the health of citizens. By improving the effectiveness of joint communications and coordinating communication efforts, the Government will be better equipped to combat disinformation. The different branches of government are responsible for communications within their respective mandates even under emergency conditions. By centralising the management of COVID-19 communications to the Prime Minister’s Office, the Government aims to ensure that the entire central government is familiar with and has access to the strategic communication guidelines, including at the regional and local levels. The Government does not propose establishing a State Communications Centre. The Government Communications Department cannot issue orders to ministries or other government authorities on the content of communications.
Deciding on powers in cases of ambiguity
Managing the COVID-19 epidemic requires cooperation between various operators in all sectors of society. The powers laid down in section 107 of the Emergency Powers Act will be introduced to ensure that any ambiguities regarding the powers, duties and management responsibilities of the authorities in unpredictable situations can be resolved quickly. This would be necessary in situations where there is justifiable room for interpretation concerning the powers of the authorities. In such cases, the dispute would be resolved by the Government based on a proposal from the Prime Minister. In emergencies, the Government may decide which central government agency will carry out a task if it is related to the mandate of more than one operating unit or if there are no specific provisions on the task in question.
Government to submit decrees to Parliament for consideration
Next, the proposed government decrees will be submitted to Parliament for consideration in line with section 6 of the Emergency Powers Act. Parliament decides if a decree may remain in force or if it must be revoked in part or in full, and if it should remain in force for the period laid down in the decree or for a period shorter than this. Once Parliament has adopted the decrees on the use of powers, sections 106 and 107 of the Emergency Powers Act will be directly applicable. Under the powers of section 86 of the Emergency Preparedness Act, the Ministry of Social Affairs and Health and the relevant Regional State Administrative Agency will be able to issue binding decisions on the operations of healthcare and social welfare units. Under section 88 of the Emergency Powers Act, a decree on the application of the Act will also be issued concerning compliance with the time limits for access to non-urgent care. This decree will lay down provisions on the restrictions and conditions related to the scope of the powers. The decree on the application of the Act will also be sent to Parliament for consideration.The decrees would enter into force on 11 March 2021 and would remain in force until 30 April 2021. The decrees will not apply to the authorities of the Åland Islands.
NordenBladet — Last year, the UN Children’s Fund UNICEF hosted a series of workshops for young people from different parts of the world in order to gather information about children’s experiences of artificial intelligence (AI). The results of the consultations support global policy guidance.
In global terms, a third of internet users are children aged under 18.
Photo: UNICEF/Schverdfinge
“First of all, take the time to get to know adolescents, because we are all aware of the intergenerational difference that occurs in two completely different childhoods. After that, assuming that a 13-year-old child probably knows more about some issues than an adult who is 50 years old today when he or she was 13, it is time to stop infantilising young people.
”This is how an adolescent from Chile sums up what many other young children think about the importance of engaging children and youth in finding solutions for questions relating to AI.Last year, UNICEF consulted 245 adolescents to learn about their views and experiences of the use and development of AI. Consultations were carried out in the form of workshops, attended by young children aged 12 to 19 years from Brazil, Chile, South Africa, Sweden and the USA.UNICEF and Finland are collaborating to create global policy guidance on the development and use of AI that affects children. The guidance is first of its kind. It aims to help governments, municipalities and companies to make sure that the AI solutions used by them will work for the best interest of the child.
Risks difficult to discern In the workshops, the children and adolescents discussed everyday situations where AI is involved, including service providers’ chat functions, facial recognition related to security arrangements, smart software that supports learning, and automatic entry selection processes used by educational institutions.Some knew very little about the subject matter in advance, while others had carefully reflected opinions. Obvious differences in attitudes emerged, for example, in questions concerning data security: some told that, without further thought, they regularly submit their personal details and private data when downloading new applications. However, there were others who were wondering where the data goes and who will use it. One thing that raised discussion was targeted advertising. A young person from Sweden was concerned about the possibility that “my free will and personal space are destroyed”.
AI is a source of inspiration Plenty of opportunities were identified in AI, including software relating to better education, health, security and transport. Many linked AI with science fiction films and considered that it is inspiring in that it leads to discussions about the future.
“What excites me about AI technology is the day when we can make life-size robots and ships to travel us to different planets in the solar system,” says an adolescent from the USA.As a rule, young children felt that they had learned about AI more at home and from friends than at school. They therefore hope that they would receive general AI education so that all would understand both the risks and opportunities involved in AI.An adolescent from Chile, who hoped that the authorities would be more active, said:
“There should be talk in schools, or advertising (which is very influential) that informs or persuades us to know more and be protected on our own. Let it be assimilated into our culture, so that people understand it as commonly as we know the notions of electricity and doors or technology.”UNICEF has consulted also experts in AI and child protection specialists. Based on the user experiences, the guidance will be finalised and published at the end of 2021. A report on consultations with adolescents across the world can be accessed on UNICEF’s website.
NordenBladet — Aggressive tax planning, utilisation of tax havens and tax holidays that distort fair competition are not allowed in development cooperation.
The Ministry for Foreign Affairs published today a policy which aims to ensure that companies receiving development cooperation funding operate in a tax responsible manner. The policy is part of the Finland’s Taxation for Development Action Programme (2020-2023) implementation.The policy specifies the basic principles to which the companies receiving funding must commit.
Aggressive tax planning is not allowed. Aggressive tax planning refers to arrangements made by companies to either artificially reduce taxable income significantly or avoid taxes completely. A company practicing aggressive tax planning may, for example, transfer income generated in a poor developing country to be taxed in another country where the tax rate is lower. In this case, the country that should have received the taxes loses income that would be used for important basic services.
The policy also prohibits the utilisation of tax havens for investments made with development cooperation funding which are not made directly in the target country but through a fund or company located in another country. In the policy, a tax haven refers to countries or areas with a low or non-existent tax rate and low regulation which have been deemed non-transparent by the OECD or the Council of the European Union. Investment arrangements made through these countries could present a risk of tax evasion.
Companies receiving development cooperation funding should also not require tax holidays which distort fair competition for themselves, in other words, tax exemptions or reliefs. Otherwise, tax holidays and other benefits available to all investors offered on similar grounds by the country are allowed.In order to monitor and ensure companies’ tax responsibility, it is also required that companies act and report their business operations transparently as required by the tax authorities in the countries where they operate.
The policy concerns all Finland’s development cooperation funding to the private sector. Special implementation instructions on the policy will be provided for the Ministry for Foreign Affairs’ private sector instruments, such as the business partnership programme Finnpartnership promoting business operations between Finland and developing countries and the development finance institution Finnfund investing in companies operating in developing countries. Finnfund has strengthened its expertise in international taxationFinnfund renewed its tax policy in 2018 and assessed its implementation simultaneously with the policy work. Finnfund’s intermediate evaluation is available on Finnfund’s website.
“We want to be a pioneer and promote tax responsibility and related discussion. It is an essential part of our responsibility work and development financing work. It has been great to note the tax policy has strengthened the role of tax responsibility in Finnfund’s responsibility work and investment responsibility assessments. At the same time, it has supported the strengthening of our personnel’s tax expertise,” says Helena Arlander, Deputy CEO of Finnfund.
Companies are significant development cooperation partners The private sector is an important partner in achieving the sustainable development goals as a solution creator, employer, service provider and financier. Private companies are crucial partners for Finland’s development policy. The sustainable development goals cannot be achieved solely with official development cooperation funds, but investments from companies are also required. Companies play an especially important role in creating jobs.
Taxes and tax-like payments paid by companies comprise a large part of the tax base in developing countries. With tax income, developing countries can offer basic services such as education and health care to their citizens. For the development of societies, it is important that taxes are collected in the countries where the taxable income has been generated.
It is important in terms of internationally fair taxation that tax systems and administrations are functional and that corruption and illicit financial flows do not obstruct the appropriate collection of taxes and other payments.“It is important that Finland requires tax responsible actions from companies receiving development cooperation funding. This is also a question of Finnish values: good governance and bearing shared responsibility,” says Pekka Hirvonen, Director, the Ministry for Foreign Affairs.
NordenBladet — Development cooperation, humanitarian assistance and peace actions should provide a more efficient joint response to the needs of people affected by crises. Closer collaboration between the various actors is therefore vital. This is the key conclusion of the analysis published by the Development Policy Committee (DPC), in which an expert group consisting of representatives of DPC members analyses the current situation and provides recommendations for the next steps to be taken for further improvements.
The publication discusses the triple nexus approach particularly in fragile contexts and protracted conflicts. There is an obvious need for closer collaboration, as a significant number of partner countries in Finland’s bilateral development cooperation are fragile states. These include countries such as Afghanistan, Ethiopia and Myanmar. Finland is also known as a committed humanitarian assistance provider and peace actor.Increasingly difficult situations emphasize the need for collaboration
NordenBladet — On 4 March 2021, the Ministry of the Interior submitted a reply to a letter sent to Finland by the European Commission on 22 February 2021. The letter concerned restrictions imposed by Finland on the free movement of EU citizens in order to curb the spread of the COVID-19 pandemic.
The Commission sent similar letters to Belgium, Sweden, Germany, Denmark and Hungary. The Ministry of the Interior prepared Finland’s response in cooperation with other key ministries. The response states that these restrictions are currently necessary in order to slow the spread of the pandemic and especially to prevent the transmission of new virus variants. The decisions to impose the restrictions respect the obligations enshrined in the Constitution and are in line with the human and fundamental rights treaties binding on Finland. The aim of the restrictions on movement that are currently deemed necessary is to safeguard public health and, in particular, every individual’s right of life. The Government of Finland has submitted a proposal to Parliament on measures to improve health security at our borders. These measures will make it possible to move away from the wide-ranging restrictions at Finland’s borders and transition towards more targeted measures that better take into account the health risk posed by individual passengers. This approach is in line with the recommendations from the Council of the EU.
NordenBladet — The objective of business cost support is to help companies in the difficult economic situation caused by the coronavirus. The Government is now proposing amendments to the Act on Support for Business Costs, which would make it possible to grant aid more flexibly, especially to sole entrepreneurs and small enterprises.
The Government submitted its legislative proposal to Parliament on 4 March 2021. After Parliament’s consideration, the President of the Republic will approve the Act. Consequently, the State Treasury could start accepting applications from companies and sole entrepreneurs at the end of April. The basic conditions of the aid will remain unchanged.
“As a matter of urgency, the Ministry of Economic Affairs and Employment is preparing a support model for the reasonable compensation of businesses affected by the new closure announced in March. The Government’s proposal on a third application round of business cost support applies to business activities before this closure in March,” says Minister of Economic Affairs Mika Lintilä.
The Act on Support for Business Costs may be amended as a result of the reasonable compensation provided to businesses affected by the closure. The amendments will be submitted either as a supplementary Government proposal during the Parliamentary committee discussions or as a separate proposal, depending on the progress of the preparation.
Fall in turnover is a condition for receiving business cost support
The third round of business cost support is intended for companies whose turnover has fallen by more than 30% due to the coronavirus pandemic between 1 November 2020 and 28 February 2021, compared with the corresponding period in 2019–2020.
All companies can apply for business cost support. The Government will later issue a decree on the sectors that can apply for support without providing further justification. If a company does not operate in one of the sectors defined in the decree, it must justify the need for support and provide an account of the loss of turnover due to COVID-19. The decree will include the sectors where turnover has decreased by at least 10% during the period.
The definition of inflexible costs which support can be applied for has been specified. In addition, the employer’s non-wage labour costs, such as social security contributions and occupational health expenses, would be accepted as costs, calculated as a percentage of the payroll costs over the support period.
Sole entrepreneurs to apply for support at State Treasury
Support for sole entrepreneurs will be part of the business cost support. Municipalities will not organise a separate application round of support for sole entrepreneurs.
A minimum support of EUR 2,000 will be paid to sole entrepreneurs if they meet the conditions for it. The amount of support will be based on the decrease in the company’s turnover and actual costs.
To be eligible for business cost support, the company must have a Business ID. The company must also have eligible expenses of at least EUR 2,000 during the support period. As before, there will be no lower limit on the turnover of the company.
Previously, sole entrepreneurs and small enterprises were able to apply for business cost support, but no aid was granted to companies where the support would have amounted to less than EUR 2,000.
Maximum amount of aid to rise to EUR 1 million
The maximum amount of aid will increase and thereby meet the needs of large companies in particular. The maximum amount of aid a company can receive will rise from EUR 500,000 to EUR 1 million.The aid already granted will be taken into account in the amount of the business cost support so that the total aid granted under the same temporary State aid rules of the European Commission will not exceed EUR 1.8 million. The ceiling was previously EUR 800,000. The new maximum amount is based on the Commission’s decision to raise the company-specific ceilings for aid.
Business cost support is a way to help entrepreneurs during the coronavirus crisis
The business cost support is direct financial aid to companies, which does not need to be paid back. As before, the support is compensation for the company’s inflexible costs and payroll costs, but it does not compensate for a fall in turnover. The first application round for business cost support took place in July–August 2020. The second round began in December 2020 and ended in February 2021. The budget for the third application round is EUR 380 million.
Support for business costs is one way for the Government to help companies during the coronavirus situation. With the help of previous support from Business Finland and ELY Centres, companies were able to develop and redirect their operations in the coronavirus situation. Other forms of support include Business Finland’s research, development and innovation loans, Finnvera’s guarantees and the financing programmes of Finnish Industry Investment Ltd, where applications are still accepted. The Government also proposes that the right of entrepreneurs to receive labour market support continue due to the coronavirus pandemic. Other previous forms of aid include special support for the food and beverage services sector and sole entrepreneurs.
NordenBladet — Minister for Foreign Affairs Pekka Haavisto will chair the meeting of the Nordic Foreign Ministers on Friday 5 March 2021.
Finland is chairing the Nordic (N5) cooperation on foreign and security policy in 2021. Due to the COVID-19 situation, the first foreign ministerial meeting of the year will be held virtually. The Foreign Ministers will discuss topical security policy questions, transatlantic relations, Sweden’s year as Chair of the OSCE, and the UN.
In global terms, a third of internet users are children aged under 18.