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Carrying out public administrative tasks in Business Finland

Due to a complaint, Parliamentary Deputy Ombudsman Pasi Pölönen has made a statement concerning the operating models of Business Finland, which provides internationalisation and innovation funding services to companies. According to the Deputy Ombudsman, the Ministry of Economic Affairs and Employment that guides and supervises the activities must consider taking measures to clarify the public administrative tasks carried out by Business Finland Oy in order to ensure that the company’s duties are based on an authorisation in accordance with section 124 of the Constitution of Finland.

Business Finland consists of a funding agency (authority) and the aforementioned limited liability company that produces services related to the duties of the funding agency in accordance with the service agreement drawn up with the funding agency. The funding agency manages the company, which is fully owned by the state. Business Finland as a whole has operated starting from early 2018.

The Deputy Ombudsman assessed the situation insofar as it did not appear to have been under consideration by Finnish Parliament when the law was enacted in 2017. According to the Deputy Ombudsman, it seems that public administrative tasks were transferred to the company after the law was approved without there being specific regulation in place at the legislative level to authorise the arrangement.

The key question in the issue is whether preparation of funding decisions has already been transferred to the company to such an extent that the authority’s discretion can no longer be used independently in making the funding decisions. The Deputy Ombudsman did not accept the view of the Ministry of Economic Affairs and Employment that the company’s duties were simply auxiliary customer service duties that were not independent. Among other things, the Deputy Ombudsman also considered it problematic that the preparation and implementation related to the decisions appears to take place on the basis of service agreements which are outside the scope of official activities and accountability.

The Deputy Ombudsman asked the Ministry to notify him of possible measures in the case by 30 August 2019.

Deputy Ombudsman Pasi Pölönen’s decision 883/2018 is available in Finnish on the ombudsman’s website, www.oikeusasiamies.fi.

For more information, please contact Principal Legal Adviser Riitta Länsisyrjä, tel. +358 9 432 3363.