The Arctic town of Kirkenes near the Russia border feels the chill as tensions between NATO and the Kremlin rise.

Kirkenes, Norway – When a beluga whale fashioned with a Russia-branded harness and camera mount bubbled up in the waters of northern Norway earlier this year, the people of the nearby town of Kirkenes joked that they finally had a spy to trade.

Back in 2017, Russian authorities had arrested and charged retired Kirkenes border guard Frode Berg with espionage.

He would ultimately be the first Norwegian citizen convicted of such a crime since the end of World War II, and today remains locked away in a jail near Moscow.

Things were not always this way between the two neighbours.

At the top of a small hill near the centre of Kirkenes stands the statue of a lone Soviet soldier, straight-backed with a gun at the ready.

There are wreaths of red, blue, and white flowers beneath him.

The monument reads: “To the valiant soldiers of the Soviet Union in memory of the liberation of Kirkenes.”

In 1944, the Soviets freed eastern Finnmark from German control.

However, the 196km border would remain closed until the end of the Cold War, with Russian troops actively patrolling the region. In 1993, Russia and Norway established the Barents Cooperation, an agreement that ushered in an era of relative peace.

But the camaraderie between the two nations, which have long served as an odd-couple of sorts, is wavering.

A white beluga whale wearing a harness is seen off the coast of northern Norway, April 29, 2019 [Jorgen Ree Wiig/Sea Surveillance Service/NTB Scanpix via Reuters]

The Arctic region is experiencing a chilling effect and the unassuming, 3,500-person town of Kirkenes has gained unprecedented geopolitical importance in recent years: the world’s only border crossing between Russia and a NATO country lies about 16km away.

As tensions rise between Europe and Russia, the town is now caught in the middle of what some have dubbed a “spy war”.

In 2014, following Norway’s condemnation of the annexation of Crimea, Russia imposed counter-sanctions on Norwegian seafood imports.

“The economic impact on the Norwegian side with the loss of the Russian market is tremendous,” said Rune Rautio, head of Kirkenes’s business incubator.

In 2019, we can be honest and say that we have a security situation that is quite tense. Thomas Nilsen, Independent Barents Observer editor

Before the sanctions, roughly half of Norwegian seafood had been exported to Russia.

“Russia was the most important importer for Norway at that time. Overnight, we had to readjust,” said Rautio.

Three years later, Thomas Nilsen was headed to a meeting in Murmansk when he was stopped by Russian border guards and barred entry.

Nilsen serves as the editor of the Independent Barents Observer, a notable publication on Arctic issues, published out of Kirkenes. The Russian embassy in Oslo later announced that he had been permanently blocked.

About 3,500 people live in Kirkenes [Gloria Dickie/Al Jazeera]

According to Nilsen, the changes in Norway really started after Vladimir Putin was elected the president of Russia for a third term in 2012.

At that time, the Russian president began to crack down on civil society, and the cooperation in the north, built by NGOs and regional governments, began to shift.

More journalists were getting into trouble.

“In 2019, we can be honest and say that we have a security situation that is quite tense,” said Nilsen.

Earlier this year, The Independent Barents Observer published an article on a gay Indigenous Sami man from Sweden, translated into the Russian language.

In turn, Nilsen received a warning from the Russian government to remove the article within 24 hours. They didn’t. Now, their website has been blocked in Russia.

“We have lost approximately two-thirds of our Russian readers,” said Nilsen.

Most recently, in July, a secret nuclear-powered Russian submersible capable of eavesdropping on underwater cables caught fire near Murmansk, 213km from Kirkenes.

More than ever before, it seems, the bear is at Norway’s doorstep.

Still, there were more than 250,000 border crossings in 2018, with people travelling from the Russian city of Murmansk to shop – stocking up on Apple products and nappies which they resell to make a profit back home.

There are about 350 Russians living in Kirkenes and some are concerned by the rising tensions between NATO and the Kremlin [Gloria Dickie/Al Jazeera]

Street signs in Kirkenes are written in both Norwegian and Russian. And roughly 10 percent of the population here is Russian, with many cross-border marriages.

“Cross-border traffic is following economic development in Russia, rather than security,” said Nilsen. “The current rate of the Russian rouble is more important.”

Between 2014 and 2017, when the exchange rate was low, few Russians travelled to Norway to shop.

But now, despite geopolitical unrest, they are coming back.

In 2017, according to Rautio, Russian customers in Kirkenes spent about 100 million Norwegian krones ($11.1m), up from 30 million krones ($3.3m) in 2014.

However, Norwegians are focused on becoming less dependent on Russia.

“We have positive development not relying on Russia,” said Rautio. “Growth in tourism and Asian visitors is booming.”

Asian tourists can be found at most hotels in town, embarking on Northern Lights expeditions or king crab safaris in nearby fjords. Every morning, a Hurtigruten cruise ship departs from the town’s port, destined for the southern city of Bergen.

By working and cooperating together, getting to know each other, it's actually a soft security mechanism. It's reducing the level of tension because this area is quite militarised. Lars Georg Fordal, head of the Norwegian Barents Secretariat

The Norwegian Barents Secretariat, a government body tasked with fostering good relations between Russians and Norwegians through civil society initiatives, is at the heart of the Kirkenes.

They regularly host sport tournaments between the nations and work on environmental projects with Russian partners.

As things deteriorate, this work has taken on a new sense of urgency.

“By working and cooperating together, getting to know each other, it’s actually a soft security mechanism,” said Lars Georg Fordal, head of the Secretariat. “It’s reducing the level of tension because this area is quite militarised.”

NATO troops now regularly patrol the region, and in November 2018, Norway hosted the largest NATO military exercise since the Cold War, with over 50,000 participants from 31 countries.

“It’s a bit colder between the West and Russia. But here, the regional cooperation goes on.”

The next day, Fordal drives down highway E105 towards the Russian border crossing, a route he has driven hundreds of times. The car in front of him sports a Russian licence plate.

The road goes to Murmansk, then onward to St Petersburg, Moscow, and finally the city of Yalta on the Crimean Peninsula. Norwegians and Russians who live within 30km of the border can travel visa-free due to an agreement signed nine years ago.

He passes by Ovre Pasvik National Park, a protected area jointly managed by Norway, Finland and Russia.

Fordal drives across a new bridge over the Pasvik River; when it was opened in 2017, ministers from both nations chose to knot a ribbon together instead of cutting it, symbolising friendship between the regions.

This October, Norwegians will mark the 75th anniversary of the Soviet Liberation of Finnmark from German control at the end of World War II.

The town has invited Russian Foreign Minister Sergey Lavrov to the celebrations.

In February, the Russian embassy confirmed that Lavrov will attend; if he follows through, it will be his first visit to Norway since 2014, when he crossed the border to attend the 70th anniversary.

Previously, following Norway’s arrest of a Russian parliamentary official suspected of espionage last September, Lavrov slammed Norway during a United Nations General Assembly.

“Norwegian hospitality,” he said sarcastically, “breaks all records.”