Finland's National Bureau of Investigation (NBI) has seized the Fitburg to secure its preliminary investigation.
The cargo vessel is suspected of damaging a submarine cable in the Gulf of Finland.
Finnish and Estonian central criminal police have set up a joint team to handle the investigation. They aim to uncover whether the act was deliberate. In addition to the NBI and Helsinki police, the investigation also involves the Border Guard and the Defence Forces.
The ship's cargo had previously been held by Finnish Customs while it completed an initial assessment of a potential sanctions breach.
Earlier on Wednesday, both transport regulator Traficom and Customs said they had concluded their inspections. Traficom identified ten deficiencies, none of which posed a risk to the vessel or its crew. Customs found that the steel cargo aboard the ship falls under Russian sanctions, but said it would not open a criminal investigation.
Finnish authorities took control of the vessel on New Year's Eve in the Gulf of Finland. The ship, which was en route from Russia to Israel, is suspected of damaging a telecommunications cable with its anchor.
