- Crisis or armed conflict time
Legislation concerning security of supply
The purpose of the Act on the Measures Necessary to Secure Security of Supply (1390/1992) is to ensure the continuity of the functions necessary for the economy, national defence, and people’s livelihood in exceptional circumstances. This act is in force also in normal conditions and not only during crisis time. To a certain extent, security of supply issues can be dealt with also in connection of individual procurements under the applicable public procurement legislation.
The Council of State objectives for Security of Supply
The Council of State has set objectives for the general security of supply (the Government’s Decision on Safeguarding the Security of Supply of 5 December 2018, Finnish Statute Book 1048/2018).
The objective is to reach such a degree of preparation that the population’s capacity to make a living, to carry out necessary social activities and to achieve the material preconditions for an effective national defence are not endangered.
The new security of supply goals give new focus on energy supplies, digitalisation, logistics and cyber security.
The Government decision on Finland’s security of supply objectives is the outcome of a broad-based drafting process and a consultation round. The security of supply objectives are updated approximately every five years.
The critical infrastructure consists of a number of systems and services, including power generation, transmission and distribution systems, transport and logistics services, digital data systems, communications networks and services, payments and security transactions systems, secure time and location data systems, and water and waste management systems.
Municipalities play a key role in safeguarding security of supply and basic public services at the local level. They have a particularly important role for the critical infrastructure and the functional capacity and crisis tolerance of the local population.
The Government also emphasises the role of private-sector operators in security of supply. Finland’s security of supply is founded on the guaranteed operating conditions and competitiveness of the Finnish industry. The State must take action to ensure that Finland continue to have sufficient levels of industrial production, expertise, research and product development.
Third-sector operators can contribute to security of supply by organising public awareness campaigns and assisting the public authorities in state of emergency.
- food and water supply
- energy production
- health care and social services
- production and services for national defence purposes
- operational preconditions of export industry
Specifically concerning production in support of defence:
The objectives state:
“The technical solutions used in national defence are based on several different technologies, which poses critical demands on the management of competence. Domestic technology competence as well as production and service functions have a significant effect on the overall operation of the defence system as well as on the military security of supply. The capability areas critical to the military security of supply are leadership and network activities, reconnaissance, surveillance and target acquisition support, joint effects, targeting as well as protection. With regard to these, the Finnish Government shall ensure that Finland will continue to have the necessary technological training and expertise, the management, production, research and development of the systems’ life span, planning, integration, service, maintenance and crisis-time repair capabilities. The Defence Forces shall maintain a related list of critical technologies.
The State shall, with the measures necessary, maintain and support the critical defence industries related to central national security interests, as well as their expertise and service production. Research, development and innovation essential to security of supply and the critical technologies as well as national competence are important. Investments shall be made in the personnel of the public and private sectors so that they would be skilled also taking into account the needs of national defence.
Together with the National Emergency Supply Agency, the Defence Administration maintains the production capacity of the most important consumable wartime material, such as artillery propellants and munitions, and necessary emergency stockpiles that support national defence. The Defence Administration shall develop critical defence material and systems’ life-span management, using partnership arrangements.
In the acquisitions by the Defence Forces, security of supply shall be ensured during the systems’ entire life span. The maintenance and security of supply requirements of material acquired with the help of the systems’ life-span management shall be determined sufficiently early so that any competence requirements directed at domestic industry can be recognised. The availability of material vital for national defence and the integration, maintenance and service capabilities of systems critical for the Defence Forces’ performance have to be ensured also in emergencies on an adequate scale and at the speed required. The independent use of the most critical systems shall be ensured in all circumstances.
The Finnish Government shall influence the common foreign and security policy of the European Union so that, together with national measures, its measures safeguard a sufficient military security of supply. In the gradually advancing cooperation of the sector, emphasis shall be placed on political commitments, which the Defence Administration aims at developing in a more concrete direction. The Defence Administration shall promote bilateral and multilateral security of supply cooperation to enable joint development, distribution and use of military capabilities. In addition to important bilateral relations, cooperation with the EU, NORDEFCO and NATO shall be a key factor. Nordic cooperation highlights especially ammunition logistics and production as well as the maintenance and storage of armaments.
The military security of supply shall also substantially be generated through cooperation between domestic and foreign industry, which promotes their mutual interdependence. The key actors of the defence and security sectors shall develop their networks, continuity management as well as preparedness planning supported by the Defence Administration and the National Emergency Supply Organisation.”
Furthermore, linked to the above described objectives, a Finnish Government resolution “Securing the Finnish Defence Technological and Industrial Base” was published in spring 2016. This resolution elaborates further on defence security of supply and the industrial capacity and know how.
Preparedness legislation linked to security of supply
In times of serious disturbances and in emergency situations, public authorities need special powers to safeguard society’s essential activities. The most important provisions are contained in the Emergency Powers Act (Statute Book of Finland 1552/2011). This act also includes powers to strengthen defence industry and logistics. The act would be enforced in special conditions as stipulated in the act, ie. it is not applied in normal conditions. The Act on Defence State (1083/1991) similarly contains measures for crisis time situations. The Act is not applied in normal conditions.
- Urgent reasons (i.e. operational reasons)
To handle urgent operational needs, procurement measures would be made by authorities. As the case may be, the Finnish procurement legislation may enable procurements with a more direct and rapid mode. Besides procurements, the applicable international network of multi- and bilateral arrangements and cooperation could be utilized (among others, EU and the Nordic framework).
The above mentioned act (readiness act) contains various measures for emergencies. See above.
Regarding the support from defence authorities to other countries in urgent situations, measures would be taken on a case by case basis.
The Act on the Defence Forces (12 §, 12a-12c §, Statute book 551/2007, recent changes in 2017), also states that the Defence Forces may receive international assistance or may assist or provide assistance to another Finnish authority in providing rescue or other assistance to another country, to EU or international organization.
There is national legislation for the control of foreign corporate acquisitions. See Act on the Monitoring of Foreigners’ Corporate Acquisitions in Finland (Finnish statute book 172/2012). The controlling authority is the Ministry of Economic Affairs and Employment.
A defence or dual use company foreign acquisition shall always require a prior confirmation. A positive attitude to foreign ownership is the guiding principle in the Act on the Monitoring of Foreign Corporate Acquisitions in Finland. The confirmation is given, unless the acquisition potentially conflicts key national interests. However, the Finnish authorities can also exercise control over the ownership of companies considered essential in terms of the security of supply and national security and, if necessary, restrict foreign ownership in such companies.
See also EU regulation 2019/452 on foreign direct investments.
- Foreign investments
See above. Mergers-Acquisitions.
- Export licenses
Export and transit of defence materiel is allowed only with an authorization (export licence) granted by the Government, or by the Ministry of Defence (Act on the Export of Defence Material 282/2012).
Applications are handled by the Ministry of Defence, Materiel Section (postal address: Ministry of Defence of Finland, Materiel Section, PO Box 31, FIN-00131 Helsinki, Finland).
Granting an export licence is preceded by an overall and cross-governmental assessment of a licence application by the Advisory working Group for Export of Defence Materiel chaired by the Ministry of Defence. The license is granted case-specifically. Authorization will not be granted if it jeopardizes Finland’s security or is in contradiction with Finland’s foreign policy.
National legislation regulating export, transit and brokerage of defence materiel: Act on the Export of Defence Materiel (282/2012). The Act is based on the directive on Intra-Community transfers 2009/43/EC.
The Government has drawn up the General Guidelines for export and transit of defence materiel to clarify the foreign and security policy as well as procedural aspects of defence materiel export. In addition, the Ministry of Defence has on its decision defined and specified defence materiel, technology and know-how.
In addition, Finland applies the EU Code of Conduct on Arms Exports.
(Please note, that for dual use goods and technologies, the export authority is the export control unit of the Ministry of Foreign Affairs. Postal address: Unit for Export Control, Department for External Economic Relations, Ministry for Foreign Affairs, P.O.Box 428, 00023 Government, Finland.).
- Codes/Regulations involving Defence Industry
There is no legally binding priority system in the Finnish legislation.
SoS-relevant economic operators in the field of defence may have certain SOS storage obligations.
Comprehensive Security is a Finnish preparedness cooperation model in which the vital functions of society are looked after through cooperation between the authorities, the business community, organisations and citizens. The Security Strategy for Society was last updated in 2017. The goals of the Strategy’s implementation, the Government resolution on comprehensive security, the policy-setting of the Security and Defence Policy Report and the Government programme are the most important documents to guide the Security Committee’s work. The tasks and allocation of responsibilities for preparedness in society are based on legislation. The general principles governing comprehensive security are outlined in the Security Strategy for Society. The updatedness of the strategy is monitored in the Security Committee and the strategy is updated by Government decision as needed. The aim is that the general principles of the strategy last over different government terms. The practical implementation of comprehensive security takes place through strategies specific to administrative branches, intersectoral strategies, implementation programmes and other documents. Examples of these include the Internal Security Strategy and its implementation programme and Finland’s Cyber Security Strategy and its implementation programme. Government reports on security are guidance documents that set out specific key focus areas and goals through the implementation of which Finland’s security can be strengthened and its well-being promoted in a rapidly changing international operating environment that is difficult to anticipate. Descriptions of the operational environment play an important role in allocating resources to contingency planning and security.
The Government’s Defence Report to Parliament
The report was submitted to the Parliament on the 16.2.2017.
Objectives of the national SoS policy
The objective is to safeguard the economic activities necessary for maintaining the population’s livelihood, the national economy, and the national defence.
National bodies involved and areas of responsibilities
The Ministry of Economic Affairs and Employment is responsible for the overall development of security of supply and the coordination of preparedness measures, while all ministries develop security of supply in their own sectors. The National Emergency Supply Organisation, which is a network of public, private and third-sector operators, develops and maintains Finland’s security of supply under the guidance of the National Emergency Supply Agency (http://www.nesa.fi).
The role of SoS in Procurement procedures (requirements, evaluation etc.).
Security of Supply plays an important role in Finnish defence procurements. Aspects to be considered are varied, and are based on the nature of each defence procurement and the lifecycle considerations in it. The current defence procurement strategy is geared to take into account these issues.
The Finnish general rules/guidelines for the defence procurement policy aim to achieve security of supply. These rules call for interoperability, selection of tested and operationally mature procurement solutions, finding international and domestic collaboration, use of European solutions when possible, etc. These rules give guidance to procurement authorities in the defence procurements.
Security of Supply issues may be integrated for instance in the technical requirements and life cycle support requirements in a procurement. Exceptionally, and in certain critical defence procurements only, the industrial participation tool could be used to gain essentially in-country safeguards for security of supply. The current, recently amended Finnish IP rules can be found from the internet site of the Ministry of Economic Affairs and Employment.
Also the EU defence and security procurement directive (2009/81/EC) enables that certain Security of Supply requirements may be stated by the Contracting Authority in the procurement (see directive article 23 with a non-exhaustive list of these requirements). These requirements will be stated in the procurement RFQ or in the procurement notices, and may appear as contractual terms and conditions. See the applicable legislation: Act on public defence and security procurements (Statute book 1531/2012).
Cooperative procurements may also be enablers for security of supply.
Contractual terms on SoS
Procurement elements that could be mentioned as supportive and relevant to SoS are, amongst others:
- option clauses
- availability clauses concerning service or locally needed support
- outsourcing in general
- IPR issues
- supply chain issues
- bilateral or other international agreements/arrangements.
National policy on sharing information on stocks/inventories
Sharing information on defence stocks is on case by case basis.
Regarding defence materiel Nato Support Agency (NSPA) is the current main place of pooling activity. In NSPA there is the NLSE (Nato Logistic Stock Exchange). It is possible to check other user nations’ stocks and procure from them.
Another potential place for exchanging information of stocks may be the various armaments User Club structures, where stock situations might be discussed in view to optimise them.
Nationally, and based on our Security of Supply system, in the times of crisis, the governmental stocks might be re-allocated based on special crisis legislation. This covers not only defence items but civilian goods and services. See the Readiness Act in Finnish legislation.
Existing Bi/Multi-lateral SoS agreements
In the field of defence:
- Agreement on support for industry cooperation in Defence Materiel area
- Agreement on Priorities and Allocations System within the Alliance
- EDA Framework Arrangement for Security of Supply between subscribing Member State
- EDA Code of Conduct on priorisation agreed by subscribing member states to the Framework Arrangement on security of supply
- Member States’ Political Commitment on Security of Supply: Declaration by the Representatives of the Governments of EDA participating Member States
SoS Experts contact info
General Security of Supply:
-Asko Harjula, Director, National Emergency Supply Agency (NESA)
SoS PoCs/National representatives contact info
Defence Security of Supply:
-Governmental Counsellor Jouko Tuloisela, Ministry of Defence
Designated EDA SOS POC:
Ministry of Defence of Finland
Resource Policy Department
P.O. Box 31, 00131 Helsinki, Finland
Telephone: +358 295 140 412
Fax: +358 916 088 278
Link to related national websites
Emergency Powers Act (Statute Book of Finland 1552/2011)
Act on Defence State (Statute Book of Finland 1083/1991
Act on the Defence Forces (Statute Book of Finland 551/2007)
Act on the Export of Defence Materiel (Statute Book of Finland (282/2012)
Act on the monitoring of foreigners’ corporate acquisitions in Finland (Statute book of Finland (172/2012).
Government’s Decision on Safeguarding the Security of Supply (Statute Book of Finland (1048/2018)https://tem.fi/documents/1410877/2095070/Government+Decision+on+the+Objectives+of+Security+of+Supply/cf19f480-dc61-b59c-3926-11857f811bfa/Government+Decision+on+the+Objectives+of+Security+of+Supply.pdf
Government Resolution on Securing the Finnish Defence Technological and Industrial Base (2016):
Page Last Updated: 16 January 2020