In accordance with its European Union membership, Finland applies the EU rules that are in force in all European Union countries. While the EU has a rather liberal foreign trade policy, there is a certain number of restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products, aimed at favoring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory. Restrictions apply to certain items such as products containing alcohol, pharmaceuticals, narcotics and dangerous drugs, explosives, etc. Beef cattle bred on hormones is forbidden to import. The BSE crisis (often called the "mad cow disease") urged the European Authorities to strengthen phytosanitary measures to make sure of the quality of meats entering and circulating in the EU territory. The principle of precaution is now widespread: in case of doubt, the import is prohibited until proof is made of the non-harmfulness of products.
Finland, like most member states of the European Community, bases its Harmonized Tariff Schedule on the TARIC (Integrated Tariff of the European Community) which is issued by the Commission and the Member States for the purpose of applying Community measures relating to import and exports, and when necessary to trade between member states. The TARIC also serves as a basis for the working tariffs and tariff file of Finland and other Member States.
A customs declaration for imported goods is submitted on the SAD form (Single administrative document), for VAT levy. It will become mandatory to submit summary declarations electronically within the entire EU territory as of 1 July 2009.
As part of the "SAFE" standards advocated by the World Customs Organization (WCO), the European Union has set up a new system of import controls, the "Import Control System" (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Program eCustomer, has been in effect since January 1, 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.
May qualify for duty free entry if:
- They are of negligible value (EUR 6 or less);
- They are for solicitation of orders for the goods of the kind represented by the sample;
- There is not more than one sample of each style or quality in a consignment;
- The goods are supplied directly from abroad;
- They will be consumed or destroyed during demonstration and are packaged and properly marked in a manner which precludes their being used as other than samples, examples: foodstuffs, non alcoholic beverages, perfumes and chemical products.
The most important factors affecting the Finnish consumer behavior are quality, safety and the origin of the product. Brand is considered a strong signal of quality. Finns favor national products especially when it is a question of food products. Conformity with European norms (CE marking) is seen by the consumer as
a guarantee of quality. In the same way, the ecological label
encourages consumers to buy the product. In case of products that are good quality, technologically advanced and conformed to the
criteria of environmental protection, the price is a much less
important factor in the consumer's choice.
Consumer Profile and Purchasing Power
Finland is a sophisticated market with a high standard of living, a well-educated workforce and it is caracterized with an increase in the Finnish consumers' purchasing power which has boosted Finnish imports. The Finnish consumer is open to new products and concepts. There is a large demand for goods with high added value. In terms of food, ready-cooked meals that are healthy and easy to prepare are becoming more and more popular among Finns. Finnish consumers like simple and practical products with simple packaging, non-harmful for the environment.
The distribution networks in Finland are more and more integrated. Flexibility in consumer behavior and in Finland’s distribution channels allows for a variety of market strategies. The increase of the consumers' purchasing power has boosted sales. However, evolution of big malls and hypermarkets in the sector has made the survival of small companies and boutiques more difficult and prices are generally high. Limited opening hours are considered to be a hindering factor in the sector.
Goods may be sold through an agent, distributor, established wholesaler, or selling directly to retail organizations. The main sectors of the Finnish economy are dominated by oligopolies. Consumables for everyday use are marketed by an integrated system of distribution dominated by three big groups: Kesko, the S Group (SOK) and third largest daily goods retailer in Finland which control more than 90% of the markets in the country.
The infrastructure in Finland is well-developed. The transportation system is based on an efficient rail and road network. Finland has over 50 merchant shipping ports. 23 of them are open year round and more than 10 are located on inland waterways connected to the Baltic Sea by the Saimaa Canal. Ports are secure and automated; loading and unloading operations are consistently quick and trouble-free. The rail system is well-functioning and the rail gauge in Finland is the same as in Russia which makes the country a good transshipment point for Russian trade. The most useful means for international transportation of goods is by sea; the most recommended means for domestic transportation are by rail and road.
Industrial sector accounts for 26% of the GDP. The key economic sector is manufacturing - principally the electronics, telecommunications, wood, metals, and engineering industries. Finland’s electronic and electrical sector overtook the forest products and metal industries as the country’s largest export industry in the 1990’s. Finland’s largest company, Nokia, is the number one manufacturer of mobile phones in the world. In term of market structure, about 3,700 companies have less than five employees, and the five largest companies cover over 60% of the industry sector’s sales volume. Trade is important for Finland; exports equal two-fifths of GDP.