Need for Retroactive Review of Foreign Investments

The ongoing conflict in Ukraine has shed light on the strategic initiatives undertaken by Russia over the past decade, with the infiltration of European economies being a significant aspect of this plan. Recent analysis reveals that numerous companies posing potential security risks to Sweden have already been acquired by Russian interests.

A report by the research firm Acta Publica highlights the presence of 124 Russian-owned companies in Sweden, as examined by the Total Defence Research Institute (FOI) in 2022. The authors of the report found that these companies are often linked to more than 300 others, with a majority being based in Sweden while their owners have close ties to the Russian government and criminal networks.

This situation raises concerns about the use of companies as tools for influence, espionage, and hostile activities by Russia in the West. The existence of companies with Russian connections in Sweden is troubling, particularly when these entities have significant societal roles.

In response to such threats, Sweden enacted the Foreign Direct Investment (FDI) law (2023:260), effective December 1, 2023, which mandates that investors seeking to acquire stakes in critical businesses must notify the Inspectorate for Strategic Products (ISP). However, a critical limitation of this law is that it applies only to investments made after its enactment, leaving previous acquisitions unexamined.

The implications of this oversight are evident in the findings presented by Acta Publica. The FOI companies scrutinized in the report were either established or acquired in 2022 or earlier, meaning their owners were never subject to ISP review. This includes essential sectors like telecommunications and oil, which are now subject to the FDI law's reporting requirements. A thorough retroactive evaluation could likely uncover additional critical sectors under Russian influence in Sweden.

It is essential to recognize that espionage and infiltration are often long-term endeavors. Historical examples, such as that of Stig Wennerström--a Soviet spy who compromised significant parts of Sweden's air defense system--highlight the enduring nature of such threats. Wennerström was likely recruited more than two decades before his arrest in 1963.

Many companies in Sweden have been under Russian control for many years, and the invasion of Ukraine by Vladimir Putin was a project he planned well in advance, with strategies to infiltrate both Ukraine and Europe. Consequently, the companies that pose security risks to Sweden have already been acquired by Russian entities.

Sweden implemented the FDI law in direct response to the Russian invasion of Ukraine; however, this action was belated. There is now an urgent need to amend this legislation to allow for a retroactive examination of foreign investments in Sweden.