How to effectively fight the shadow economy and financial crime – Donations support research of societal importance

In her master’s thesis, graduate of the Faculty of Law Sofia Selkämaa examined the legal prevention of financial crime and the shadow economy. She considers a scholarship awarded from donated funds to be valuable recognition of her work.

In her third year of studies at the University of Helsinki’s Faculty of Law, Sofia Selkämaa was inspired by a topic on which she eventually completed her master’s thesis.

“The fight against the shadow economy and financial crime is extremely close to my heart,” Selkämaa says.

In her master’s thesis, completed in May 2022, Selkämaa focused on examining the obligations imposed on businesses – such as to file tax returns and provide receipts on purchases – as part of the prevention of the shadow economy and financial crimes.

“There are a lot of studies suggesting that harsh punishments may not prevent crime as much as thought.”

Selkämaa also wanted to investigate the cost-efficiency of measures, as well as the balance between obligations and the preservation of the competitiveness of businesses.

“How can the smallest measures possible effectively prevent financial crime without hampering business operations with excessive obligations?” Selkämaa asks.

“As the topic has not been explored from this perspective in Finland, my master’s thesis may contribute to closing this research gap.”

A scholarship with great symbolic significance

For her master’s thesis, Selkämaa received a €1,000 scholarship from the University of Helsinki’s donated funds.

“It had a great symbolic significance. I felt my work had been noticed, and that it made a difference.”

The scholarship also provided the resources needed to focus on completing her studies.

Alongside law, Selkämaa is pursuing at the University of Helsinki a degree in econometrics, or mathematical economics.

“I’ve been really into mathematics since I was a child. In primary school, I dreamed of becoming a maths genius. In the final year of general upper secondary school, I spent a long time choosing between mathematics and law.”

Selkämaa believes that the combination of degrees in law and mathematics will engender a lot of future opportunities.

“Since the shadow economy is also an economic phenomenon, understanding its mathematical side also helps to understand its legal aspects.”

Moreover, multidisciplinary research projects are becoming increasingly common, with phenomena investigated simultaneously from a range of perspectives.

“Economics and statistics are fields that could greatly benefit law – and vice versa.”

Securing a job with a master’s thesis

In her master’s thesis, Selkämaa found that the obligations imposed on businesses to combat the shadow economy and financial crime are fairly fragmented and mixed in Finland.

“There are various implementation models for similar problems. It felt that the wheel had often been reinvented, even though existing legislative means were available.”

According to Selkämaa, varying implementation models impose a great administrative burden on businesses.

“From the perspective of businesses, simplicity is always good. Similar solutions should be found for similar problems.”

As a phenomenon, the shadow economy is extensive. According to Selkämaa, legislation is in fact not always the best way to combat it. At times, other means of societal impact can be more effective.

“An example of this is a campaign targeted at young people by the Finnish Tax Administration, which explained why taxes should be paid.”

Selkämaa now has a Master of Laws degree, and a job thanks to her master’s thesis. Since January, Selkämaa has been working as a project planning officer at the Institute of Criminology and Legal Policy.

She was recruited by the institute’s Director Kimmo Nuotio, one of her two master’s thesis supervisors.

“It also felt good that the work put into the thesis has been noticed.”

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Thanks to the valuable support of donors, more than €400,000 in scholarships and grants are awarded to University students and researchers every year.

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