Minister of Trade and Industry: "Monitoring The Situation in Eastern Finnmark Closely"

"We understand that the business community in Sør-Varanger and East Finnmark has been affected by the changes following Russia’s war of aggression against Ukraine and the extensive sanctions against Russia. For businesses and local communities that had significant interaction with Russia over a long period, the process of adjustment has been challenging."

Norway's Minister of Trade and Industry Cecilie Myrseth (Labour) emphasizes this to High North News.

“The Government is closely monitoring the situation in Eastern Finnmark. Since 2022, we have implemented a range of measures targeting Finnmark and Eastern Finnmark, including business development funds, restructuring grants, and business-oriented support schemes. In total, substantial funds have been allocated,” the minister says.

Local impact 

HNN recently covered the new report from the Kirkenes Business Association which examines the consequences the sanctions against Russia have had for businesses in Kirkenes and Sør-Varanger, Northern Norway.

The analysis shows that the operating conditions for businesses in the region changed rapidly in 2022 following Russia’s full-scale invasion of Ukraine, and this came on top of other challenges, such as the pandemic and quota reductions for key fish species.

"Norway has chosen a necessary sanctions policy, but the cost is not borne equally", said Kristina Hamre, chief executive of the business association.

The report, prepared by Orinor AS, shows that Russian retail trade in Sør-Varanger is estimated to have fallen from around NOK 60 million before the pandemic to approximately NOK 10 million in 2024. Furthermore, revenue generated by the Port of Kirkenes from Russian fishing vessels has dropped by about 90 percent.

Using 2021 as a baseline year, the annual loss in revenue is estimated at approximately NOK 3.22 million.

“At the same time, the local business community have demonstrated great adaptability. Employment remains high, but this transition comes at a cost borne particularly by port, retail, and service businesses in the border area,” Hamre elaborated.

In this situation, Hamre and the Kirkenes Business Association emphasized that the state must support the region with measures commensurate with the documented burden, and highlighted four decisions by the government that the business community considers necessary:

• East Finnmark requires better connectivity to the rest of Norway: ensuring reliable afternoon and evening service between Kirkenes and Oslo that makes day trips possible.

• Restructuring: establish a targeted program for companies affected by sanctions and for the maritime and port-related business sector.

• Sydvaranger mine: clarify state involvement and risk mitigation measures that can unlock private capital and contribute to the realization of new mining operations.

• Power and grid: ensure progress on the 420 kV eastward connection and a binding plan for the necessary grid capacity extending to Sør-Varanger.

"Not now"

“East Finnmark is a strategically important region for Norway, and the government will continue its work to facilitate value creation, restructuring, and jobs in the region,” says Minister of Trade and Industry Myrseth.

She emphasizes that Norway stands firm on its sanctions policy.

"We acknowledge the input from the Kirkenes Business Association and take the concerns seriously, but we are not considering specific new compensation schemes as a result of the sanctions at this time," concludes Myrseth.