A Nordic Nightmare

By Li Xuanmin Source:Global Times Published: 2017/10/30 18:03:39

Chinese businessman shares his experience of investing in Finland


The entrance of the China Center in Kouvola, Finland, pictured in 2007 Photo: Courtesy of Wang Jiazhu


Is Finland a good place for investment? For Chinese businessman Wang Jiazhu, the answer to that question cost him 6 million euros ($6.96 million), or all his investment in Finland. His investment project, the China Center, based in Kouvola, Finland, was shut down after a massive raid by Finnish police in 2009 on search of illegal immigrants. The Global Times recently spoke with Wang, his lawyer and witnesses involved in the case to search for updates, to figure out the full details of the case and to gauge whether there is a future for Chinese investment in Finland.

When asked whether Finland is a good place for Chinese to invest, Wang Jiazhu, a Chinese businessman who once invested 6 million euros ($6.96 million) in the country, sighed and went silent.

In 2007, Wang opened the China Center in Kouvola, a city in southeastern Finland, for the selling of imported Chinese goods.

But the center was shut down eight years ago when border guard officials and Finnish police launched "one of the largest-ever operations in the country" after suspecting the center was "organizing illegal immigration into Finland," local newspaper Kouvolan Sanomat reported in January 2012.

Wang was later arrested and imprisoned for 11 months.

After being acquitted, he appealed to the Helsinki district court in 2013, demanding 4.4 million euros in compensation from the Finnish government to make up for his losses during the raid aftermath.

His appeal was rejected by the district court in 2015, so Wang then brought the case to the Helsinki Court of Appeal, Finland's secondary court. But the Court of Appeal also rejected his appeal, affirming the verdict of the first trial.

Afterward, Wang hesitated over whether to appeal the case to the Finnish Supreme Court.

"I was told by my lawyer that the chance of winning over Finnish authorities is very slim… I would probably have to appeal to the international arbitration court [instead], whose [more authoritative] ruling would have provided more justice [than the Finnish courts]," he told the Global Times.

Looking back at his time in Finland, the 63-year-old businessman from Wenzhou, East China's Zhejiang Province, said that his investment was "thrown out of the window" due to the immigration raid and that his "business dream in Finland has been crushed."

Flashback to the raid

In 2005, Wang was introduced to the Wenzhou Council for the Promotion of International Trade to discuss a rail project connecting Kouvola to North China's Tianjin.

At the invitation of the Kouvola local government, Wang visited Finland five times and felt positive about the project's potential economic benefits to neighboring regions.

He then decided to set up the China Center in Kouvola with the aim of building the center into the biggest marketplace in Northern Europe for Chinese commodities trading and also into a logistics hub for China, Russia and Finland.

The 128,000-square-meter China Center opened in September 2007. 

Suddenly, Wang's dream was shattered when an extensive crackdown on illegal immigration led by 150 border guard officials and Finnish police occurred on November 11, 2009.

The raid was accompanied by two helicopters and a troop of police dogs. "Such use of forces was unprecedented in Finnish criminal history [at the time]," Wang's attorney Janne Jokinen told the Global Times over the weekend. 

As a result of the operation, about 100 Chinese vendors were put into custody for one or two days, with their computers and cell phones seized by Finnish police.

Huang Chunlin, who was running a clothes store in the China Center at the time, told the Global Times Friday that he suffered about 200,000 euros in losses, almost all of his life savings, due to the investigation. And the 55-year-old man now has to make a living in Finland as a migrant worker.

Wang, the owner of the China Center, also lost all his investment.

Wang was arrested on suspicion of organizing illegal immigration, fabricating documents and evading taxes. The China Center was subsequently closed down and has not been in operation for its original purposes since.

One possible reason for the raid is that "the Embassy of Finland in China had received 940 visa applications for residents' permits related to visits to or doing business in the China Center from 2006 to 2009," the Helsinki-based newspaper Helsingin Sanomat reported, citing the Finnish official who was in charge of the operation.

When questioned by border officials, those applicants apparently said they didn't know much about the China Center, causing authorities to then suspect that the center was in fact being used to run a human trafficking ring, said the official.

But it turned out that police officers could not find any victims of so-called human trafficking during the investigation. And according to former Kouvola mayor Aimo Ahti, also a witness in the case, the 940 visa applications were in fact a response to invitations issued by a subsidiary of the Kouvola government with the aim of attracting foreign investment, Finnish media reports said.

On February 10, 2010, the Finnish Supreme Court ruled that the so-called false information provided for residents' permit applications, which Wang was not in charge of anyway, did not constitute the crime of illegal immigration, as based on Finnish common law. Wang was therefore acquitted the same day.

But it was too late. In June 2011, the China Center was auctioned off by local bank Osuuspankki based on a mortgage agreement signed with Wang, as the bank questioned Wang's ability to pay back loans. 

The appeal

Since September 2013, Wang has been appealing the case to the courts, demanding 4.4 million euros in compensation from the Finnish government.

Two controversies surrounding the case are whether the investigation was excessive and whether it directly led to the failure of the China Center.

The defense, border guards and the Finnish tax bureau claimed that the China Center had been operating at a loss since opening in 2007. Wang was then required to submit evidence that showed that the project's failure was directly linked to the investigation.

Besides, according to Wang, the China Center was designed to be a long-term investment project and that it is expected for a project not to generate profits in the first few years.

"The future of the China Center would have been quite different if it wasn't for the raid," Wang stressed.

The latest ruling by the Court of Appeal in September, which upheld the decision of the district court in rejecting Wang's appeal, said that the court had "found some inappropriate conduct by the investigators but did not find that sufficient enough to validate the damage," according to a statement Jokinen sent to the Global Times.

Commenting on the case, Ahti said that the large operation against the China Center could have been avoided if Finnish police had actually communicated with relevant government bodies beforehand.

He also noted that he believes the investigation was racially motivated.

"What if Wang was a businessman from Germany or France? Then he probably would not have been charged with organizing illegal immigration," Ahti told the Global Times in a face-to-face interview on October 23.

The Embassy of Finland in China, the Finnish Border Guard and the subsidiary of the Kouvola government in charge of attracting foreign investment had not responded to interview requests by the Global Times as of press time. 

Still hope?

In the wake of the raid, Wang paints a dim picture for the prospect of Chinese investment in Finland.

"Businesspeople from China should stay alert to fend off unexpected disasters," he said.

But regardless of Wang's case, Jokinen told the Global Times over the weekend that Finland remains an appealing destination for investment, as the country has established a complete legal environment that protects personal property.

Furthermore, China has now grown into the world's second-largest economy. "Finnish authorities have already realized the importance of Chinese investment and are all stepping up efforts to attract Chinese investors," Ahti said.

And in the long term, "the prospect for bilateral economic cooperation [between Finland and China] is promising, especially in the high-tech industry, where Finnish companies have an advantage," Zhu Bin, the director of Shanghai-based Finnish government agency Invest in Finland Greater China, told the Global Times.



Posted in: INSIGHT,BIZ FOCUS

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