Archive for Post

  1. Post

    How Will COVID-19 Affect the Office Market?

    On the other hand, Facebook leased nearly 70,000 square meters of office space in Manhattan in August with the intention of turning New York’s former main post office into a huge open-plan office. It is clear that there will still be demand for office space as long as the location is right. Companies in Finland are also having to think about what kind of spaces employees will need in the future. As working from home becomes the norm, offices will increasingly become meeting places. Health and safety concerns have increased the desire for offices to be spacious, but the long-term trend of the decrease in the overall amount of office space seems set to continue. What we might see alongside this trend is an increase in multi-locality. Rather than a downtown head office, employees might be better served by decentralised work hubs. Changes on the office space market will also impact the residential market. Old office buildings are already being converted into apartments and other uses nearly as quickly as new office space is being built. At the same time, more and more people want a functional working space at home and new kinds of amenities in the buildings they live in. Lease agreements will also need to be more flexible in order to support the convertibility and versatility of spaces. Proactive property owners should also take the lead in health and safety expectations. Property owners that have performed ventilation inspections and comply with voluntary ventilation and coronavirus recommendations published by HPAC organisations will be able to increase the competitiveness of their properties. It seems clear that the pandemic has accelerated changes that had already begun in the real estate business.

    Published: 13.10.2020

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    Recent Trends in Housing Investment — Cooperation between Properties and Services for Residents

    In practice, however, owning apartments demands more from both housing companies and investors. In addition to general administration, the housing company has to organise building management and maintenance and the necessary renovations. The landlord or housing company may also offer residents additional services to make life easier. Cooperation between Neighbouring Buildings More Common In new housing companies, some practical matters may be arranged together with neighbouring properties. The most common forms this takes is shared yards and parking garages or, for example, pipe collection systems for waste management. From a legal standpoint, there are many ways to arrange this kind of cooperation, for example, through joint arrangement agreements, divided possession agreements or jointly owned companies. Jointly owned and maintained areas or systems can be more efficient and bring savings but can also be a risk to homeowners. For example, if zoning regulations have not been complied with, it may be difficult to correct the situation if the relevant rights to neighbouring properties have not been carefully agreed. However, these kinds of risks can be minimised through careful contract drafting and risk management. It is particularly important that homeowners’ rights to the kinds of joint arrangements described above are permanent in all situations and that the division of maintenance and renovation costs and the responsibilities for joint arrangements have been agreed transparently and fairly. From Housing Investor to Service Provider Services provided by housing investors to tenants are a recent rising trend. A landlord or housing company may offer residents, for example, carsharing vehicles or gym services, but even personal training services, lobby services or apartment hotel services for the guests of residents. With large numbers of people transitioning to working from home last spring, the need for shared, adaptable remote working spaces grew. Housing companies with shared spaces for residents were able to use flexible reservation practices to make it possible to use these spaces for meetings or quiet work. Buildings may also have solar panels to provide electricity to residents or residents who handle the handover of keys and the final inspection of apartments on behalf of the landlord when moving out. Services Require New Risk Management Expertise Providing services requires housing investors to be able to manage risks in an increasing number of fields. Depending on the how services are provided to tenants, the landlord or housing company may bear significant liabilities beyond the typical scope of housing investment, such as in the realm of employment law or data protection. The tax treatment of services will also depend on how they are implemented. Before offering or even marketing services to residents, housing investors should carefully review all of the different ways or implementing the services and the related obligations. Similarly, a thorough due diligence review is important when considering adding a housing property that provides services to an investment portfolio. Services Improve Returns on Investments Despite brining new administrative obligations and risks, offering services to residents is a trend that investors should not miss out on. Providing services to residents will enable housing investors to respond to demand from a good position on the market and get better returns on their investment.

    Published: 1.10.2020

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    Land Use and Building Act Reform – Will the Reform Bring Transparency to Land Use Fees?

    The Ministry of the Environment established a parliamentary committee to prepare an overhaul of the Land Use and Building Act in 2018. The goal is for the government proposal for the new act to be ready by the end of 2021. As part of the preparation of the reform, the Ministry of the Environment commissioned a report on municipal land use agreement practices. The report, which was published in March, confirmed the prevailing impression that local authorities have a wide range of interpretations of the act. Contradictory Grounds for Land Use Payments I think that the most interesting part of the report is that many local authorities base land use payments on the goal of stemming the appreciation of the value of land, despite the fact that this was not the legislator’s intent. Pursuant to the Land Use and Building Act, land use fees should be based on the costs incurred by local authorities from community building. When the land use fee collected for a land use agreement is based on the appreciation of the value of land, the landowner is not able to assess whether the amount of the fee is correct. Local authorities rarely include land use fee calculations in land use agreements or even as in their decision-making processes. As a result, landowners and municipal decision-makers are unable to assess whether the amount of the fee is correct compared to the costs of community building arising from planning changes. If calculations are made, they are usually based on the appreciation caused by the detailed plan. Such calculations mainly list the demolition and contamination costs incurred by landowners due to the change to the detailed plan as well as changes to the value of the building rights  allocated to the property. The justifications for collecting land use fees may actually be rather thin, for example, in complementary building projects in dense urban areas. In such cases, land use fees based on appreciation are not likely to correspond to the costs incurred by the local authority from community building. Indeed, the landowner’s payment obligation often deviates significantly from the legislator’s original intent. More Cost Transparency The reform of the Land Use and Building Act is a massive legislative undertaking. One would hope that the reform will resolve the shortcomings in land use fees and agreements. A easy improvement would simply be to increase the transparency of costs. This is particularly important given the fact that the power relationship in land use agreements are unbalanced, with landowners having no real ability to negotiate the content of the agreement or the amount of the fee.

    Published: 30.9.2020

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    Interpreting the Information Obligation – Efforts to Comply with the Co-operation Act Not Always Enough

    The Act on Co-operation within Undertakings is a procedural act that sets a great many requirements on employers but provides few direct answers. The employer’s duty to provide information involves some particularly difficult questions to interpret. This blog post covers two recent court decisions that show that it may not be enough for an employer to make an effort to act in compliance with the Co-operation Act. The obligation to pay indemnification can arise if an employer has negligently violated an obligation the contents of which are not provided for in detail in the act. INFORMATION REQUIRED TO BEGIN NEGOTIATIONS When commencing co-operation negotiations to reduce personnel under chapter 8 of the Co-operation Act, the employer must provide the personnel with the following information in the proposal for the commencement of negotiations or at the latest in the first round of negotiations: Providing sufficient information is a basic requirement for a successful negotiation procedure. The employer’s concrete plan forms the foundation for the negotiations between the parties, and the personnel can present their own alternatives. TIMING OF NEGOTATIONS IS KEY Negotiations should not be started too soon, because early on the employer usually does not have sufficient information to fulfil its information obligation. On the other hand, the employer cannot proceed too far in planning, as no actual decision to reduce personnel can be made before commencing co-operation negotiations. Choosing the correct time to commence negotiations is one thing where an experienced employment lawyer can support an employer even before negotiations start. CASE 1: REFERENCE TO LEGISLATION NOT SUFFICIENT INFORMATION ON DETERMINATION PRINCIPLES There are no detailed instructions in legislation, case law or legal literature on exactly what information employers have to provide on the principles used to determine which employees will be subject to personnel effects. Traditionally, a reference to the order of termination of the applicable collective agreement for employees or civil servants has been considered sufficient. However, exactly what is considered a sufficient description of the determination principles has remained unclear in organisations that are not subject to the order of termination of a collective agreement. The Supreme Court weighed one such situation in decision 2020:7, in which it deemed that a statement to the effect that the order of termination is in compliance with legislation and is non-discriminatory does not give the personnel sufficient information to prepare for the negotiations. Despite the fact that neither the Co-operation Act nor its legislative materials provide any details on how the determination principles are to be described, the employer in the case was deemed to have acted negligently by making a general reference to acting in compliance with the law, and this gave rise to the obligation to pay indemnification. However, in its decision the Supreme court did not provide any detailed guidance on what kind of information on the determination principles would be deemed sufficient. The Supreme Court merely stated that ‘ with respect to the determination of what employees will be subject to measures, relatively general information on the principles guiding the determination may be sufficient ’. This guidance to provide general information leaves many employers still wanting more concrete instructions. Based on prior case law, a description of the factors that the employer will consider when making the choice would be sufficient. Such factors could include: It is not necessary to provide a plan of whose employment relationship would be terminated, but to describe what factors the employer will consider take into account when making choices. CASE 2: COURT OF APPEAL REQUIRED GEOGRAPHIC BREAKDOWN OF PERSONNEL EFFECTS The Vaasa Court of Appeal issued two decisions on 29 June 2020 concerning assessing the scope of personnel effects. Pursuant to the Co-operation Act, at the start of negotiations, the employer must provide an estimate of the number of terminations, lay-offs and reduction of employment contracts into part-time contracts. The  Court of Appeal took the position that the employer’s estimate must be broken down by personnel group and geographical area if this information is necessary for the negotiations. No such obligation can be found directly in law. The Court of Appeal justified its position by an interpretation of the Collective Redundancies Directive and by stating that the precision of the information provided by the employer must be assessed in relation to the purpose of the co-operation proceedings. According to the Court of Appeal, the employer must make a case-by-case determination of whether a geographic breakdown is information that is necessary for the purpose of the co-operation procedure. For many employers, this guidance also raises more questions without providing certainty that they have fulfilled their obligation to provide information. In the Court of Appeal’s decisions, the employer had provided its estimate of the need for reductions by personnel group, but because it was a large company with business operation in different municipalities, the Court of Appeal found that the employer should have estimated the geographical breakdown of the personnel reductions. Because the employer had not done so, it was ordered to pay indemnification—despite the fact that the Co-operation Act does not contain an express provision imposing such an obligation. The Court of Appeal’s judgments are not yet final (as at 21 August 2020). FEWER DETAILS AND MORE GENUINE DIALOGUE IN THE FUTURE? Some of the problems in the current Co-operation Act from the perspective of employers are that the act is open to interpretation, contains complex procedural rules and imposes harsh consequences for breaching them. It is difficult for employers and employees to have an real dialogue and negotiate in the spirit of co-operation when the procedure easily becomes bogged down in details that the employer may not be able to gain certainty of from the law despite best efforts.  The Co-operation Act is planned to be reformed to better realise the spirit of co-operation between employers and employees. Instead of detailed procedural regulations, the spirit of co-operation could be better served through more general regulation. The new act is also intended to add flexibility through allowing procedural rules to be deviated from by agreement in a national collective agreement or in a co-operation agreement between the employer and personnel. The government proposal on the amendment was supposed to be published during the spring of 2020, but has been delayed by the coronavirus pandemic.

    Published: 25.9.2020

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    What Does Sustainability Mean to a Corporate Lawyer?

    In the midst of this, companies are turning to their legal advisors for knowledge about good, sustainable practices — not just about what the law or courts says is legal. Legal work is changing, and I think that it is changing for the better. SUSTAINABILITY EXTENDS THROUGHOUT BUSINESS LAW Lawyers seems to have discovered sustainability work a bit late, though we are in a position to have a significant impact. Sustainability issues extend far beyond environmental law. Nearly every contract brings with it the opportunity to make a difference. It is difficult to think of a field of law that wouldn’t involve some aspect of sustainability. Green finance is becoming more common, and contract templates are evolving. In mergers and acquisitions, sustainability issues come up in due diligence reviews and can impact purchase prices, and there is much work that could be done in energy sector contractual structures. Public procurement projects should be implemented sustainably. If competitors want to work together to reduce emissions, they need a competition law assessment. Business intelligence needs to be based on the responsible use of data, and merely knowing the GDPR by rote is not enough. Anti-corruption work needs functional compliance practices and whistleblowing channels. IMPACT THROUGH NEW FINANCIAL INSTRUMENTS The pursuit of impact is also creating entirely new kinds of work for lawyers. Impact investing and impact funds have already gained a foothold. In impact investing, private capital is not only used to pursue a profit, but also measurable benefits for society, and it is being promoted as one possible solution to the increasing challenges faced by the public sector. NEW CAREER PATHS FOR LAWYERS The changes that are going on in the world are a call to lifelong learning and are creating new, interesting career paths for future generations of lawyers. Who would have thought just a few years ago that the UN’s sustainable development goals could be a major part of business lawyer’s work? DOING OUR PART At the beginning of 2020, Castrén & Snellman became the first Finnish law firm to join the Global Compact. There are three pillars to sustainability at C&S: our own sustainability, sustainability advice for clients and impact on society. We can have the biggest impact through helping our clients develop their own sustainability. In addition to the UN Global Compact , our sustainability work is anchored in the UN’s sustainable development goals. Our key goals are to promote equality, fight climate change and promote the rule of law. This blog was first published in  18.8.2020 .

    Published: 24.9.2020

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    Occupational Safety in the Time of COVID-19 – What Every Employer Needs to Know

    The pandemic has given rise to many questions among our clients. In this post, we cover the some of the most common questions relating to occupational safety. Can an Employee Leave off Work if They Are Afraid of the Coronavirus or Are in a High-Risk Group? An employee’s fear of contracting the coronavirus is not, as a rule, a reason to leave off work. The Occupational Safety and Health Act gives an employee the right to leave off work if the work causes a serious risk to an employee’s own or other employees’ life or health. However, the threshold for applying this provision is quite high. The right to leave off work can only be exercised in exceptional circumstances in which the risk is real and serious. Having an underlying condition that increases the risk of contracting the serious form of the coronavirus does not automatically entitle an employee to leave off work. Furthermore, the right to leave off work is not available if the risk can be avoided by improving occupational safety. Indeed, occupational safety measures taken by the employer are always the primary means of resolving this kind of situation. What Occupational Safety Tools Does the Employer Have? Employers are required to take care of the safety and health of their employees while at work. The point of departure is that the employer must identify risks and hazards in the work environment and seek to eliminate them or, if this is not possible, minimise them. Based on a risk assessment, the employer must plan how the risks caused by the coronavirus in the workplace will be managed. The concrete measures available vary depending on the working conditions. When planning measures, employers should also take into account personal factors relating to employees, such as being in a high-risk group. Careful consideration should also be given to how binding to make the measures: the employer must decide whether measures at the workplace are recommendations or whether to exercise its right of direction to make them binding orders. Concrete measures can include: For example, the risk assessment may show that minimising hazards requires an obligation to wear a mask at the workplace. In this case, it is the employer’s responsibility to provide the employees with instructions on using masks, to procure masks for the workplace and to bear the costs relating to the masks. What Are the Employees’ Obligations? Employees are obligated to comply with their employer’s instructions and to otherwise promote the safety of the work environment through their own actions. In any work community, there may be individual employees who react negatively to new instructions. It is important that employers reinforce their work safety orders using the measures available under employment law. Summary of Employer Work Safety Obligations The question of whether an employer has fulfilled its work safety obligations is often tested in trials. In short, the work safety measures that employers should take due to the coronavirus are: Employers also have to take the coronavirus into account as part of the company’s occupational safety processes. Now might be a good time to review your company’s occupational safety processes as a whole and make sure they are up to date.   Eveliina Tammela Lisa Litvin

    Published: 14.9.2020

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    Flexibility and Trust Take Centre Stage in the Workplace

    One would hope that similar flexibility would continue to be available in the future. Different employers have different reasons for reducing their workforce, and in clear situations, there is no need for long negotiation procedures. Negotiations tied to specific time limits should not amount to extended notice periods for employees with negotiations only being continued because the minimum negotiation period has not yet run out. The spring showed that employees and employers are capable of reaching flexible agreements that take the interests of both sides into account without stiff procedures imposed from the outside. Both legislation and collective agreements should be developed to provide a framework within which different workplaces can find the practices best suited to them regardless of what industry or union they are a part of. The underlying philosophy of the new Act on Co-operation within Undertakings, which is currently being drafted, is trust—the desired result would no longer be sought through detailed procedural rules, but through agreement between the employer and personnel in the spirit of cooperation. The experiences of this past spring show that this approach really does work in practice. Employers act responsibly by securing the foundation for continued employment relationships and seeking solutions with employees that everyone can commit to. If last spring’s amendments and the ground rules for shifting to remote working had been hammered out the traditional way, it is likely that they would still not be ready today.

    Published: 14.9.2020

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    Long-Term Wind Power Purchase Agreements Are the Foundation of Wind Farm Investments

    As part of this development, long-term power purchasing agreements between wind power companies and electricity purchasers have become increasingly common in Finland over the past few years. The agreements are usually made for 10–20 years between a wind power company and either one large or several small electricity purchasers. The duration and agreed pricing model in this kind of agreement provides all of the parties stability, while providing the purchaser renewable energy to meet its responsibility and sustainability goals. These kinds of agreements have been common on the international scene for some time already. S TEADY CASHFLOW AND FINANCING A term power purchase agreement (or PPA for short) is a key requirement for securing financing in any wind power project. In the PPA, the buyer commits to buying a certain amount of electricity from the wind power company at an agreed price. This provides the wind power company with a secure cashflow, so a financier can be confident that the wind power company will be able to repay the loan for the construction of the wind farm. SEVERAL FINANCING MODELS The most typical project financing models are the pay-as-produced and baseload models. In the pay-as-produced model, the buyer undertakes to buy all of the electricity produced by the wind farm at any given time. In the baseload model, the buyer undertakes to buy a certain fixed amount of electricity, and the wind power plant may be liable to the buyer if the wind farm does not produce the agreed amount of electricity. Other models that are frequently used in Finland are pay-as-produced with cap and pay-as-produced with hedge . In the former, all of the electricity produced in purchased up to a specified amount, but in contrast to the baseload model, the producer is not liable for shortfalls in energy production. In the latter model, the entire output of the wind farm is usually purchased, but the pricing is agreed through a joint hedging system. If the price of electricity on the open market is high or is projected to increase, this model makes it possible for the wind power company to get a better price. A price floor is usually agreed to secure a minimum price level that the company received for the electricity produced by the wind farm. PRICING FACTORS: MODEL, DURATION AND RISKS OF AGREEMENT Pricing is the subject of much discussion in PPAs. Pricing is impacted by the model of the PPA, the duration of the agreement and by what risks are borne by the producer. In a financing context, the term that gets used is the net price of the PPA. The net price is based on the gross price agreed in the PPA deducted by various cost items: liquidity costs, profile costs, balance management, volume risk and other items, such as lodged collateral. If you are thinking about making a PPA a part of your wind farm project or electricity procurement, Castrén & Snellman’s energy industry experts can help you choose the best PPA for your wind power project or power consumption.

    Published: 26.8.2020

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    Never Miss a Crisis

    During the crisis this spring, organisations transformed themselves into virtual workplaces with astonishing speed. It quickly became clear that working as an expert is not tied to time or place. Nevertheless, I still believe that a unified team draws its strength from human encounters and a sense of community. Human interaction is the glue that keeps an organisation together and on its feet. From the perspective of leadership, the crisis has clarified decision making by putting priorities into sharp relief. When the view forward is foggy, you have no choice but to focus on fundamentals and push aside the unnecessary. You have to communicate often, clearly and openly–to tell the truth, even when it is unpleasant. You also have to have the courage to say you don’t have the answers and that the future is uncertain. These principles are certainly applicable at any time. We spend much of our lives at work, which is why it is so important to develop work sustainably. This is one area that the pandemic could help point the way to something better. Commercial law is a hectic business, and working as a business lawyer can at times be very intense. At Castrén & Snellman, we have put a great deal of time and effort into helping our ambitious employees make their day-to-day lives as balanced as possible, even when they find themselves having to juggle work with family life. I believe that the crisis will help us find many good solutions as we move forward. The personal and economic price of the pandemic is huge. When rebuilding our society and economy, it is important that we don’t just repair old structures but renew them. We need to work towards a more sustainable, environmentally friendly and responsible future. Let’s make sure that the cost of this crisis is not wasted, but that we use it in a way that will enable us to meet the next crisis stronger than ever.

    Published: 30.6.2020

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    Responsible Sports Marketing Benefits Society

    The commercial exploitation of the reputation of the Olympic movement has been restricted so that official commercial partnerships can be used to fund the Organising Committees of the Olympic Games and the work of National Olympic Committees. Due to the global attention focused on the Olympics and the significant financial interests involved, the Olympic movement puts a great deal of effort into protecting its trademarks and brands. The effective protection of the Olympic brand benefits all of the official Olympic partners. Olympic Sponsorship Channels Income into Sports Olympic sponsorship takes place through an agreement between the Olympic organisation and a company. This agreement grants the sponsoring company the right to use certain Olympic intellectual property rights, such as certain trademarks. The sponsor also gets the opportunity to engage in Olympic-related marketing in exchange for their financial support. Olympic sponsorship programmes are always based on the principle of exclusivity for a certain product category. Under the guidance of the International Olympic Committee (IOC), all sponsor marketing seeks to uphold the ideals and brand value of the  Olympics and to protect the exclusive rights of Olympic sponsors. Sponsors support the organisation of the Olympics and the activities of the Olympic movement in many different ways. In addition to valuable financial resources, they provide goods, services, technology and expertise. The support of sponsors also promotes the Olympic movement’s work in the fields of education, the environment, culture and youth and supports the development of athletes across the globe. Sponsors also develop advertising and marketing activities that help promote the Olympic values and increase the general public’s awareness of the Olympics and support for Olympic athletes. The IOC distributes 90% of its income to organisations in the Olympic movement to support the organisation of the games and to promote the global development of sports. The remaining 10% goes to the administration of the Olympic movement. The IOC distributes over 3.4 million dollars a day to support athletes and athletic organisations on every level around the world. The expenses of the Olympic Team Finland are covered using the funds of the Finnish Olympic Committee and the IOC. In exchange for supporting the Finnish Olympic Committee, partner companies gain appeal to support the success of their own business. Partnerships are built around a multifaceted array of campaigns, responsibility programmes, licensing and promotions. Ambush Marketing is Prohibited The trademarks and other intellectual property rights relating to the Olympics are the property of the IOC and its national member associations, and their use without permission is prohibited. Anyone who is not an official partner of the IOC or Finnish Olympic Committee is prohibited from creating the impression—whether through advertising, marketing or communications—that they are partners of the Olympic movement either locally or globally.   Because of how well known the Olympic brand is, Olympic intellectual property rights involve significant financing interests, and the careful supervision of these interests is vital to maintain the reputation and continuity  of the activities of the Olympics. Official sponsorship is also a significant investment for partners, who are entitled to assume that outside parties will not be able to benefit from the Olympic brand without permission. However, significant financial interests inevitably attract parties seeking to illicitly exploit the reputation of the Olympics or of Olympic athletes. One way that the exclusivity of Olympic sponsors is sought to be protected is through the prevention of ambush marketing. Ambush marketing is when someone other than an official sponsor refers to the games in their marketing either directly or indirectly in an effort to create the false impression of that they are commercially associated with the games and unlawfully benefit from the related advertising value. Ambush marketing is particularly harmful to the Olympic movement and its official sponsors. For example, 90% of the proceeds from the international main sponsors in the TOP (The Olympic Partners) programme is channelled to National Olympic committees, and ambush marketing reduces the return that the main sponsors get on their vital support of the Olympic movement. The continuity of this support is dependent on the financial benefit gained from the Olympics being allocated fairly between the organisers and financiers. From a marketing perspective, the Olympics are a particularly important event, because only official partners who have paid for the right to use the Olympic brand in their marketing are allowed to benefit from it. Advertising outside of an official partnership and violations of the advertising rules directly reduce the funds raised for sports. Responsibility as Official Partnership The responsibility of marketing is becoming more important all the time, and it has a clear impact on the purchasing decisions of consumers. Responsibility is also one of the Olympic Committee’s key values. In addition to responsibility for society, the environment and personnel, it also means social and financial responsibility towards all of the Olympic Committee’s stakeholders and society in general. By supporting athletics and sports, companies have the opportunity to link themselves to the values of the Olympic movement. An official sponsorship provides companies with concrete value and complying with the principles of responsible marketing guarantees that income is channelled to the development of sports both on the global and national level. Responsibility also entails that all marketing relating to the Olympics is done with permission in the form of an official partnership. When marketing is done responsibly, this supports the Finnish Olympic Committee’s society work, particularly in encouraging people to exercise more and succeed in elite sports. The globally renowned Olympic ideals create content, significance and value in business. The Olympic team and its sponsors provide spectators with unforgettable emotional experiences. Acting as an official partner and engaging in responsible marketing supports the success of individual athletes and the development of sports in general. Castrén & Snellman is proud to support athletics and sport as well as the important work that the Finnish Olympic Committee does in society. As an official partner of the Finnish Olympic Committee, we safeguard the Olympic brand in Finland and make sure the Olympic marketing is done right. We also assist the Finnish Olympic Committee in many sports-related legal issues.   Hilma-Karoliina Markkanen Senior Associate, Member of the Finnish Bar Ida Laakkonen Senior Trainee on the C&S Olympic Team

    Published: 24.6.2020