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   #10yearchallenge – The Many Faces of Facial Recognition

   Soon after the start of the craze, people started posting about whether the meme was perhaps a data collection ploy started by Facebook in an effort to train its facial recognition algorithms to recognise the signs of aging. What easier way to gather the necessary data than to start an innocent meme to get users themselves to upload data into a large, organised database while entertaining themselves and their network. Facebook has denied these allegations and claimed that the phenomenon originated with its users and reminded users that they can switch off facial recognition at any time. How is Facial Recognition Used? There isn’t necessarily anything wrong with developing facial recognition technology — quite the opposite. If used correctly, it could change the world for the better, for example, by helping to diagnose illnesses early. Wired, an American magazine, recently published an article written by Kate O’Neill in which the writer – also inspired by the #10yearchallenge – brings up the pros and cons posed by facial recognition technology. According to her, facial recognition algorithms that recognise the signs of aging could be used, for example, to find missing children years later. We encounter facial recognition technology every day, for example, when using our smartphones: a glance is enough to unlock your phone, many apps use facial recognition, and even your photo gallery often uses facial recognition to automatically group your pictures by person. Facial recognition can also make daily life easier: in Finland, we have piloted facial recognition to approve payments, and the technology is used in border checks to speed up the movement of people. Technology is being developed for cars to monitor the condition of drivers to improve traffic safety. In the US, facial recognition has been used to help law enforcement to identify and arrest criminals. However, this kind of mass surveillance has been criticised, because if abused, it could lead to discrimination and threaten democracy. Data collected by facial recognition technology that identifies the signs of aging combined with other data, such as location data, online behaviour or health data, could in future open the door to more extensive uses. For example, there are already insurance policies in which the policyholder agrees to hand over exercise and sleep data as well as health and lifestyle data to the insurer in exchange for discounted insurance premiums. A Threat to Privacy? It is clear that facial recognition technology has many good applications. However, if abused, it could become a threat to privacy. Facial recognition uses images of people’s faces, which in the data protection world are considered personal data. More specifically, they are classified as biometric data if an individual can be identified from the images or if they confirm the unique identification of an individual. Other biometric data includes fingerprint data used, for example, in access management. Because facial recognition involves risks, there is an ongoing global debate about the necessity of regulation. In the EU, the use of facial recognition technology is regulated by the EU’s General Data Protection Regulation, which sets a framework for the processing of biometric data that is slightly stricter than the conditions for processing normal personal data. As with all personal data, it is important to consider the purpose for which facial recognition data is processed. If biometric data is used, for example, to uniquely identify a person, such data can only be processed with the express consent of the person, in cases provided by law or, for example, if people make the data public themselves — perhaps by publishing a profile picture on a public social media account. As users of social media, it is important to think about what our data is being used for and whether it is being processed lawfully, but we should also remember to respect our own data and privacy, as O’Neill suggests in her article. Social media platforms have long been filled with apps and games mainly intended to collect data for later use, for example, in advertising. On the other hand, as long as we keep in mind what data we are sharing, who we are sharing it with and what purposes our data is being used for, we probably don’t need to start making tinfoil hats. Understanding the risks related to data processing puts us on safer footing.

   Published: 12.2.2019

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   What Is Happening to Black & White Trade Marks in Finland?

   To date, the answer to this question has been that when filing a Finnish trade mark, a black & white logo mark covers all colours. However, if you decide to file an EU trade mark, then you get what you have filed. However, my answer is about to change, as the new Finnish Trademark Act is entering into force in the spring of 2019. New Rule in Finland Finnish trade mark law will undergo a major reform at the beginning of 2019. In this connection Finland has decided to abandon the ’black & white covers all’ approach and adopt the ’what you file for is what you get’ approach. This means that existing Finnish black & white logo trade mark registrations or applications filed before the new Act enters into force will continue to cover all colour variations of the mark in question. However, new black & white logo trade marks filed after the new Act has entered into force will cover only the black and white version of the mark. Use It or Lose It One important rule to remember is that if you have not used your trade mark in its registered form within the last 5 years, third parties can invalidate your trade mark due to non-use. If you file a black & white logo trade mark in Finland in the future, but you use your logo in some colour variation, you might eventually end up in a situation where your competitor can invalidate your trade mark registration as you have not used it in black & white form. To avoid this kind of situation, you should also protect your logo in colour in future. Enforcement Problems If you file a black & white logo mark after the new Act has entered into force and then try to enforce it against a competitor who is using a similar kind of mark in colour, you may have hard time proving that the colour mark infringes your black & white trade mark registration. The problem is that use of a prominent colour logo may not be considered confusingly similar to an earlier black & white logo registration. Conclusions After the new Act has entered into force, you need to take the following things into account in Finland:

   Published: 22.1.2019

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   Industries in Transformation – How Lawyers Can Help the Reshaping of Business

   Drivers of Transformation The challenges currently reshaping the markets, for example, in the fields of energy and banking, include the transfer from product centricity to customer centricity, the need for faster reaction times, increasing complexity, as well as advances in technology and digitalisation. All of these phenomena are actually very familiar to us lawyers in our own daily legal work. Every lawyer has clients – be they internal customers for in-house lawyers or the clients of us attorneys – whom we seek to serve to the best of our abilities. Lawyers tend to master quick reaction times and continuously encounter very complex situations. We have also learned to live with uncertainty, which is inevitable in legal interpretation questions. As for digital solutions, here at Castrén & Snellman, for example, we have automated our document production practices and are experimenting AI solutions in our projects . Our document management systems have been digital for almost two decades already! On the Pulse of Business Lawyers have the opportunity to be trusted partners and advisors to our colleagues in business positions. This is especially true of in-house lawyers: be it the legal department of a large corporation or the only lawyer in a smaller company, in-house lawyers get to work and interact with all parts of the organisation, from the boardroom to front-line sales and services. On the other hand, we external counsel get to act in many different industries and have a front row seat to see the ongoing industry convergence. In these interactions, we have a unique opportunity to contribute to and facilitate concrete actions. Ideally, in-house and outside lawyers get to pool their experience in close cooperation for the benefit of the business. Lawyers as Integrators According to several studies, professionals who regularly work with various different stakeholders within an organisation can have a strong positive impact by advising and connecting stakeholders to each other, which those stakeholders normally would not do. This is something that we lawyers should always keep in mind and do even more often. The same also applies to external networks: sometimes connecting persons from different firms may lead to new opportunities for all the parties involved. Methodology Dealing with legal matters often – and ideally – occurs before any problems actually arise. Therefore, a lawyer’s duty is to find out what the possible scenarios are that could occur in the future, and prepare the legal side of the business case accordingly. This could include formulating clauses in a contract to cover more or less anticipated scenarios or, for example, preparing a leak plan for an insider project of a listed company. Due to the nature of legal work, lawyers often are able to ask the ‘painful’ questions. This is an essential part of a lawyer’s toolbox and should be used in a business-minded way. Pioneering and Piloting Lawyers can be creative, too. Perhaps not as creative as engineers or colleagues on the commercial side, but sometimes certain new practices or ways of working are adopted in corporate legal departments or law firms before other places. Legal teams are usually quite small compared to business side teams. This makes piloting and pioneering new practices quite easy for us lawyers. In the best case, piloted practices have the potential to be scaled up for the business lines, as well. Even in the worst case, the pilot may reach its end in the legal team based on critical feedback, which we lawyers are often quite eager to provide. Shaping Future Business Although the last couple of years have seen many good examples of in-house legal teams and external counsel contributing to the reshaping of businesses to meet evolving market demands, I believe that even more can and should be done. It is clear that the best results require cooperation between in-house and external lawyers. Based on my own empirical evidence, I can say that this can often be fun!

   Published: 18.1.2019

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   Government Proposal: Shareholders Disqualification at General Meetings to be Expanded and Voice to be Amplified

   In May 2017, the European Union adopted the SHRD II Directive [1] amending the previous Shareholders’ Rights Directive [2]. The Member States shall bring into force the national legislation necessary to comply with the SHRD II by 10 June 2019. On 13 December 2018, the Government submitted a proposal to Parliament for the implementation of the SHRD II (Government Bill HE 305/2018). The Government hopes that the current parliament will swiftly adopt the amendments proposed by the Government—not least because otherwise Finland, ever the EU’s model pupil, might oversleep the implementation of the Directive.   What Is the Goal of These Amendments? One of the expressly stated goals of the SHRD II is to contribute to shareholders’ possibilities to have a say on the remuneration policy of listed companies and to enhance transparency between companies and investors by increasing the shareholders’ involvement in corporate governance systems.  In accordance with the reasoning of the SHRD II, institutional investors and asset managers often do not engage with companies in which they hold shares; in addition, capital markets often exert pressure on companies to maximise their performance in the short term, which may jeopardise the long-term performance. These are the issues that EU legislation is seeking to tackle. What Is Actually Going to Change? The main changes brought about by the government proposal concern the remuneration of the directors of listed companies, the definition of the concept of related parties and disqualification in decision-making. We will have a look at each of these topics below.   Remuneration of Directors in Listed Companies In accordance with the government proposal, starting from 2020, the general meetings of listed companies shall discuss the company’s remuneration policy, and starting from 2021, the company’s remuneration report . The remuneration policy must be put on the agenda at least every four years and will provide the long-term guidelines for remunerating the board of directors and the managing director of the company. The remuneration report must be discussed annually, and it will summarise the actual remuneration measures in light of the remuneration policy. During the bill’s drafting, the most controversial issue was whether the general meeting’s stand on the remuneration report and policy should be binding or advisory. The final legislative proposal adopted an advisory vote. In view of the consistency of the Finnish system and our governance culture, we feel that this was the right choice. To date, the general meeting has decided (and will continue to decide) on the remuneration of the board of directors, which in turn decides on the remuneration of the managing director. In the future, the general meeting will also take an advisory stand on the company’s remuneration policy. In practice, apart from the board of directors, this stand only regards the remuneration of the managing director and their deputy as well as the company’s supervisory board, if any. The recent remuneration debate in public may have given the wrong impression that the remuneration policy should concern the company’s directors to a larger extent, such as other executive management. A More Detailed Definition of Related Parties The Government proposes that the Limited Liability Companies Act would include a two-level definition of the concept of ‘related parties’: on the one hand, a new definition of related parties would be introduced to the Limited Liability Companies Act for unlisted limited liability companies, and on the other, the new definition of related parties regarding listed companies would be further defined. The definition of the related parties of a listed company will continue to be based on international financial reporting standards (IAS 24) that listed companies have already been applying before. In the future, the concept of related parties will be defined in more detail for unlisted companies as well. In accordance with the government proposal, in future the related parties of all companies will include, e.g. the parent company, shareholders holding more than 50% of the votes represented by the shares or, in the absence of such shareholder, shareholders holding at least 20%, and the members of the advisory board and the board of directors, the managing director and his/her deputy. The related parties also usually include the entity whose management said person belongs to or which they hold a significant share in. Disqualification to be Expanded In accordance with the government proposal, provisions that would expand the scope of disqualification with regard to decision-making in both the board of directors and the general meeting of a listed company would be introduced into the Limited Liability Companies Act. Currently, disqualification at a general meeting is limited mainly to issues that relate to an action against the shareholder itself. In the future, at a listed company’s general meeting a related party would be disqualified from deciding on a transaction that does not fall within the normal course of the company’s business nor occur on market terms, if said party or a related party of said party is involved in the transaction. However, as a significant derogation from this rule, a related party could still participate in decisions within the competence of a general meeting (e.g., distribution of assets, share issue and issue of options, including the relevant authorisations to the board). Despite seeming considerable at first glance, the change will probably only have a minor effect in practice, because of this substantive derogation. In accordance with the proposal, a member of the board of a listed company would be disqualified in the board of the company or a subsidiary thereof from deciding on a legal transaction that does not occur on market terms, if said member of the board or a related party of said member is involved in the transaction. The proposed legislation largely corresponds to current practice. It is proposed that similar provisions on disqualification would be applied to managing directors and their deputies, too. Are the Goals Realistic? It is justified to ask whether the goals set for the reform—to promote the long-term financial performance of companies and to enhance transparency—can realistically be met through the changes introduced by the Directive. In the Finnish context, the need for such changes can also be questioned. This, of course, is sometimes the nature of the EU’s harmonisation projects in which the objectives are not limited only to national needs. What we see as a positive development in the reform is that listed companies will have to consider more closely than before how justified the remuneration practices of the company are in the light of the objectives of the company and, thus, how they will hold up under public scrutiny. We believe that in the future, general meetings will receive better-justified remuneration policies, but it remains to be seen whether this change will have an impact on the level of remuneration. A more detailed definition of the concept of related party and the extension of disqualification to related-party transactions that do not fall within the normal course of the company’s business or occur on market terms are both welcome reforms, though in practice the outcome is not likely to differ much from the current situation. Finally, it should be born in mind that the reform is currently just a proposal and Parliament may choose to amend it.

   Published: 8.1.2019

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   Restrictions to Deductibility of Interest Costs Created Debate at C&S Tax Seminar

   Partner Elect Mikko Alakare chaired the seminar and panel and presented a current events review, which covered the interest deductibility restrictions as well as i.a. the effects of changes to source of income system. The national tax evasion provision, which would remain unchanged, received particular attention. This almost one hundred year old provision, which is interpreted expansively, continues to cause several tax disputes and has a significant impact on the predictability of Finnish tax system and legal protection of taxpayers. Our panellists discussed various practical perspectives on transactions as well as the effects that amending legislation is anticipated to have on transactions. The interest deduction restrictions will in their suggested form have a particular impact on real estate investments into Finland and the structuring thereof. According to Counsel Matti Lajunen, current real estate holding structures were mainly designed at a time when no restrictions on the deductibility of interest costs were on the horizon. This could become a financially significant issue for investors, particularly as interest rates rise. At the moment it looks like the legislative amendments will be entering into force on a very tight schedule. These amendments have been seen amongst foreign investors as concrete proof that the risk of legislative changes is relevant in case of Finland, as well. Unutilized net interest expenses are, and will continue to be, asset items with a net asset value. Counsel Tuomas Honkinen presented an M&A perspective and said that the entry into force of the restrictions on net interest expenses on bank loans will significantly limit the use of this asset. The value of net interest costs has already been recognised particularly in buyout arrangements. Moving forward, the monitoring of two distinct net interest expense categories will be up to each taxpayer. The third issue that arose in discussions was the remaining uncertainty with respect to legislation. Partner Tero Tuomisto discussed about problems in relation to infrastructure projects: whether or not the interest costs of infrastructure projects financed through debt will fall within the scope of the restriction or not is undergoing further preparation and remains as an open question. This makes it significantly more difficult to calculate the profitability and feasibility of infrastructure projects. Furthermore, the changes in source of income system could also affect existing financing structures. A financier’s perspective was provided by Nordea’s Markku Pitkänen, who brought up the fact that the loan agreements used by banks typically already have some flexibility for many of the factors relevant to debtor companies. The amendments to interest deductibility have not yet had any material effect on financing negotiations. Senior Counsel Leena Romppainen from the C&S tax team brought up the problems relating to the proposed new balance sheet test regulation. The current legislative framework has problems which have been addressed by the Supreme Administrative Court, partially even through voting decisions. At the moment, it looks like certain open questions relating to investment fund structures will still be left up to the courts to solve. Issues relating to the sufficiently comparable financial statements required by the balance sheet test may also fall into this category. At this stage, it looks like the best option for taxpayers with respect to future amendments to tax regulation is to ensure sufficient room for further amendments through finance, corporate and contract law means. Key issues from this point of view will be the Finnish Tax Administration’s forthcoming guidelines for the concept of items considered interest under interest deduction limitation regulation, as well as how useful the new balance sheet test regulation turns out to be in practice.

   Published: 20.11.2018

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   PropTech Drives the Real Estate Business to Evolve

   From an investment perspective, systems benefitting end users can seem like nothing but extra costs with no added profit — at least in the short term. Admittedly, systems that make properties more efficient generally do require a longer investment horizon, as they can often take decades to pay for themselves. However, maintaining the value of the investment requires that properties are up to date and meet the needs of tenants and consumers as well as requirements of sustainable development. On the other hand, investments can generate revenues and additional cash flow, for example, from advertising monitors and applications, package delivery systems and other new business models. PropTech can gather strategically valuable data on customer movement and behaviour. All that remains is to put that data to use. It is also important to make sure that the right to privacy is sufficiently respected. In the case of personal data processing, this means taking the requirements of the GDPR into account when developing new business models. When selling a property, buyers will not only be interested in brick, mortar and cash flow, but also in making sure that the rights to PropTech software and data are transferred as a part of the deal. PropTech is now pushing property investors, developers and tenants alike to evolve. One estimate is that within five to ten years, properties and technology will be so closely linked that the term PropTech itself will be obsolete. It is now high time to grasp the opportunities provided by technology.

   Published: 8.11.2018

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   Is There Room on Your Board for AI?

   Earlier this year, consultancy company EY carried out a survey and invited respondents such as the members of the Directors’ Institute Finland and the upper operative management of Finland’s 500 largest companies. EY designed the survey in cooperation with the Chairman of the Board of Nokia Corporation, Risto Siilasmaa. According to the results, about a third of companies make no use of AI or machine learning in their internal operations. About one-fifth of companies make no use of AI or machine learning in external operations and have no plans to do so. So it seems that when it comes to AI, many companies are still in the locker room putting on their shoes while some are at the starting line and still other are already hitting their stride in the first curve. Harnessing AI for Corporate Management Change is on the way, however: over 95% of the respondents believed that their companies would be using AI and machine learning internally in some way by 2020. This means that the next couple of years should be quite busy on this front. As far as internal functions go, AI could be useful in management or even board work. A quite well known example of the use of AI in corporate management is Hong Kong based investment company Deep Knowledge Ventures, which started using an AI application called VITAL in its board a few years ago. The company says that they don’t make a single investment decision if VITAL doesn’t support it. The founder and CEO of the company Dmitry Kaminskiy says that the application has lived up to its name: without its help in analysing investment targets, the company would have invested in over-hyped projects and may even have gone under. Another example has been getting attention closer to home here in Finland. Tieto Corporation adopted an AI application called Alicia T to support the decision making of the management team of its Data-Driven Businesses unit. However, based on media coverage at least, AI applications like VITAL and Alicia T are still quite rare. The possibilities provided by AI can also be examined through the lens of the requirements that the Finnish Limited Liability Companies Act sets for company management, i.e. that the management must promote the interests of the company with due care. Boards fulfil this duty of care when they make a logical decision or take other action taken based on proper information and have not been influenced by any conflicts of interest when doing so. AI could prove particularly helpful in the gathering and analysis of data. It could also be possible to delegate some routine tasks to an AI to free up the management’s time for more important things. Be Aware, Keep Up It would be an exaggeration to claim that company boards would have an obligation to use AI, but it is a good idea to keep AI on the agenda. ‘Develop or be left behind’, is how Reaktor’s Director of Artificial Intelligence Hanna Hagström summed up the situation for C&S. Risto Siilasmaa is on the same wavelength, ‘the only way to achieve a competitive edge is to be quicker than everyone else’, he said in connection with EY’s survey. Corporate management would be well advised to keep their antennas raised and actively think about how their company could benefit from AI and what kinds of application AI could have. Of course, it is important to keep in mind that new solutions always bring costs and new kinds of risks. There is one significant limitation to the use of AI in boards of directors: in Finland, AI applications cannot be appointed as full board members. The Limited Liability Companies Act does not explicitly state the board members must be natural persons, but that is only because this has been taken for granted. This issue has previously been discussed in connection with whether a legal person could service as a board member, as is the case in some countries. Today, the global discussion has moved on to whether an AI could be a full board member and what kinds of legal challenges such membership would entail. For the time being, however, it is clear that whether or not a board uses AI, the responsibility for any decision rest with the people who made it.

   Published: 2.11.2018

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   Is This a Public Procurement – Do We Need a Tender Process?

   There is a great deal of case law on direct procurement. The legal grounds for direct procurement are interpreted strictly, and the procurement entity is the one that has to prove that the grounds are met. The Finnish Competition and Consumer Authority has issued many decisions in which it has ruled that a direct procurement should have been put out to tender. Procurement lawyers often reach the same conclusion in the cases on their desk. Mixed Agreements – Procurements or Not? The most difficult situations to call are ones where the arrangement concerns, for example, both a procurement of services and a sale of city land. In these kind of cases, the goal of the city is often to promote residential construction and improve business opportunities for companies and also to better organise the services it provides to its residents. These kinds of mixed agreements are assessed on a case-by-case basis to determine whether the main object of the arrangement is a procurement or not. The assessment also determines whether the procurement could be carved out of the overall arrangement. If it could have been, but was not, the entire arrangement will be subject to procurement rules. Contractual Amendments also Need Consideration A third frequently asked question concerns contractual amendments. Let’s say that a procurement entity wants to purchase additional work from a contractual partner or the circumstances during the contract period have changed in such a way that the contract needs to be amended. Is it okay to go ahead with the amendment, or does another tender process have to be arranged? The Procurement Act contains detailed provisions on what kind of amendments can and cannot be made without a new tender process. The list is not exhaustive, however, and the provisions don’t directly apply to procurements exceeding the national threshold. There is still little case law on material amendments, which adds to the challenge. However, it is worth noting that the Finnish Competition and Consumer Authority has also dealt with amendments, and one policy it has established is that reducing the object of the originally tendered procurement could be a prohibited amendment. Tender Processes are Opportunities When procurement lawyers get questions about whether the Procurement Act is applicable or not, the underlying question is often is there any way to avoid a troublesome and time-consuming tender process. At this point, the procurement lawyer may raise an eyebrow. The goal of tendering is, after all, to make efficient use of tax money, i.e. find the partner on the market that has the best solution for the procurement entity’s needs. It would be better to think of the obligation to tender as an opportunity to tender. It would make sense to use the alternatives provided by the markets even when not within the scope of the Procurement Act. Small procurements or mixed contracts can be put out to tender informally. If a procurement does call for knowledge of complying with the Procurement Act, procurement lawyers will always be happy to help.

   Published: 2.10.2018

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   Wind Power: More Clean Electricity under Market Terms Agreements

   This year, Finland made an even stronger commitment to renewable energy production when Parliament approved a new subsidy system. The system is based on a competitive tender process, which will also be open to wind power producers at the end of the year. Wind power is affordable, which means that it has great deal of potential. Given these circumstances, we expect that the tender process will also lead to an increase in wind power production. Investments are now also increasingly being made under market terms. This is due to technological development, the increase in the annual output of power plants and an increase in the market price of electricity. Corporate power purchase agreements (PPAs) have gotten a toehold in the Finnish renewable energy market. In a PPA, the electricity purchaser and producer agree in advance on the price at which the purchaser will buy the future output of a particular wind power plant. This allows the purchaser to support the production of renewable energy and meet the sustainability goals it has set for its own business. The wind power producer for its part gets certainty that the investment will be profitable without subsidies for the duration of the agreement and that it can safely make the decision to finance and build the wind farm. Renewable energy also offers opportunities for traditional industry and wind power developers to collaborate. If it becomes easier for investors and developers to find one another, public subsidies may no longer be needed at all. We are following the development of the renewable energy market with interest and are proud to be involved in bringing innovative solutions into Finland.

   Published: 2.10.2018

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    The Rise of Corporate Power Purchase Agreements (PPAs) for Renewable Energy in Finland

    The recent trend in PPAs results from the fact that while the installed capacity of wind energy has doubled within two years to roughly 2,000 MW in Finland in 2018, a majority of these wind energy investments have been made with the support of state aid from the feed-in tariff scheme. After the feed-in tariff scheme was closed to new projects in the end of 2017, developers have had to look into market-based arrangements for the production of renewable energy. Increased electricity market prices in the Nordics, increased prices of the EU emission allowances and decreased costs of production of wind energy as well as technological advancements are among the other key factors for the recent rise of PPAs in Finland. Benefits for the Power Producer PPAs are typically entered into at a stage where the wind farm development project has not yet been constructed, but the project is ready to be built, i.e. the zoning requirements and permits for the construction and operation of the wind farm have been secured. PPAs are typically entered into for between 10 and 20 years from the start of production. This provides long-term certainty for a specific revenue stream for the developer, which in turn allows the wind energy developer to make the final investment decision on the construction of the wind farm. The long-term revenue certainty under a PPA is also one of the main criteria in the assessment whether the project is bankable, i.e. whether long-term financing can be granted for the wind farm investment. Since wind farms are often financed on a project finance basis, PPA arrangements normally involve the conclusion of a direct agreement between the project lender, the developer and the offtaker. Under a direct agreement, the lender is granted certain rights to step in and replace the power producer under the PPA in case the power producer defaults under the loan agreement. The PPA is followed by the conclusion of the project financing agreements as well as the key project agreements for the construction and operation of the wind farm, such as the turbine supply agreement and the balance of the plant agreement. Benefits for the Offtaker Many companies have sustainability objectives to reduce the carbon footprints of their operations. A PPA enables large companies to meet their renewable energy commitments. A PPA that contributes to the construction of a specific wind farm project may also be regarded as a tangible means to advance the shift from carbon-based electricity production to climate friendly alternatives. A typical offtaker under a PPA is a company with high energy demand. Such companies also look for security against electricity market price fluctuation, which in turn may be controlled with the price mechanisms under a long-term PPA. Key PPA Terms The fixed electricity price is often considered the key aspect of a PPA. However, the price may also include indexation-related factors or a cap and/or floor price mechanism. In addition, the general risk allocation affects the production price under a corporate PPA. A PPA may provide that the offtaker must purchase the entire production of the wind farm on an as-generated basis regardless of possible fluctuations in the production volume. Alternatively, the producer may guarantee a pre-agreed production volume for the offtaker under the PPA. The guaranteed production volume is based on an energy yield prediction level, i.e. an annual energy production (AEP), which is usually referred to with probability factors such as P50 or P75. In addition to the sale and purchase of the power production, guarantees of origin (GOs) have a key role in PPA transactions. GOs are used to verify that the electricity has been produced from renewable energy sources. Under a PPA, the producer is normally liable to provide the offtaker with GOs for the power production from the specific wind farm. Do Corporate PPAs Offer a Path Forward in Finland? Recently a new support system for renewable energy called the premium scheme was introduced in Finland. The new premium scheme is based on a technology neutral competitive tendering process in which only those renewable energy development projects are approved into the scheme that offer the greatest annual production for the lowest premium. Further, projects are approved into the scheme only up until an annual production volume of 1.4 TWh under the tender competition in 2018. Currently it has been estimated that there are roughly 4,000 MW of feasible wind farm projects in Finland. Due to the limited number of projects that will be approved into the premium scheme, we expect that corporate PPAs will have great potential in the Finnish wind energy sector in the future. We have represented both the offtakers and power producers in relation with PPAs and are actively involved in bringing innovative practices into the Finnish renewable energy markets. Benefits to the offtaker: Benefits for the producer:

    Published: 24.9.2018