FINLAND Trends and Developments Contributed by: Anna-Stéphanie Roubier, Johanna Kauppinen and Milja Vuopio, HPP Attorneys Ltd
new Finnish company), and, on the other hand, on an interpretation whereby, in the absence of existing supply or other supply commitments with government authorities and agencies, the target’s operations cannot be considered critical. Based on the background memorandum, the notification obligation of greenfield investments may not apply to all sectors, instead having a more limited scope of application. • Refining the scope of “foreign investor” to also encompass EU- and EFTA-based legal and natu - ral persons, in line with the rule applied to the defence sector. This would certainly be one of the most significant changes to the current regime. Presently, EU- and EFTA-domiciled and registered persons have been considered “foreign investors” only for the purposes of corporate acquisitions in the defence sector. Based on the initial views pre - sented in the background memorandum, EU- and EFTA-based legal and natural persons would be considered “foreign investors”, at least in the con - text of corporate acquisitions in the field of critical infrastructure and critical service infrastructure. As acknowledged in the background memorandum, an amendment to also consider some EU- and EFTA-registered and domiciled persons as “foreign investors” may need to be carefully considered in light of the EU’s internal market rules. The scope and possible amendments to the Screen - ing Act remain subject to discussion and review. A more refined view is expected at the latest when the government bill is presented – by autumn 2026, based on current information. The Finnish Supreme Administrative Court Upholds a Direct Award by the Finnish Defence Minister By a ruling rendered on 4 February 2026, the Finn - ish Supreme Administrative Court (the “SAC”; korkein hallinto - oikeus ) dismissed an appeal lodged by the German leading small arms manufacturer Heckler & Koch GmbH, which had challenged a direct award made by the Finnish Minister of Defence (MoD) in favour of a domestic supplier. In March 2023, the Finnish MoD concluded a frame - work agreement with Finland-based Sako Oy for the
supply of a new small-arms family, without conducting a public tender. The Finnish Defence Forces Logistics Command ( Puolustusvoimien logistiikkalaitos ) subse- quently negotiated the supply terms jointly with its Swedish counterpart, the Swedish Defence Material Administration. The framework agreement has an ini - tial term of ten years, with options to extend the agree - ment until the end of 2053. Heckler & Koch argued that the direct award was unlawful, as the conditions for invoking Article 346 (1) (b) of the Treaty on the Functioning of the European Union (the “TFEU”) had not been met. That provision permits member states to take measures they con - sider necessary for the protection of essential security interests connected with the production of or trade in arms, munitions and war material, provided, however, that such measures do not adversely affect competi - tion in the internal market for non-military products. The provision can justify an exemption from public tendering requirements and a departure from the prin - ciple of non-discrimination. The SAC considered two key criteria: first, whether the procurement concerned weapons intended exclusive - ly for military use; and second, whether the procure - ment constituted a measure necessary to safeguard a key national security interest. The SAC answered in the affirmative to both ques - tions. On the question of military use, it followed the Finnish Market Court’s reasoning that the list drawn up by the European Council in 1958 of products to which Article 346 (1)(b) TFEU applies, should be inter - preted broadly, to reflect technological developments and evolving defence procurement requirements. This seems to run counter to a well-established principle of EU law that exceptions to general rules are interpreted narrowly, and this was, curiously, acknowledged by the SAC itself in its judgment. On the second criterion, the SAC confirmed that it is not for the courts to define key national security interests. It found that the Finnish Defence Forces had provided sufficient justification for relying on Article 346 (1)(b) TFEU, placing significant weight on Sako Oy being a nationally established supplier. The reasoning was that, in times of emergency, a foreign supplier
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