Estonian Defense Minister Hanno Pevkur has announced his resignation after it emerged that Tallinn paid €70 million ($81 million) in advance for artillery shells for Ukraine to a company with no track record of producing the ammunition.
The scandal erupted on Wednesday after the Eesti Ekspress newspaper reported on the botched procurement and the ensuing legal dispute. In August 2024, Tallinn signed a contract with Italian-registered Datasel, owned by Indian company Neco Defence Munitions, to supply artillery ammunition for Ukraine. The government paid €15 million upfront despite neither company having any previous record of manufacturing artillery shells.
A second deal followed in October, with Estonia paying another €10 million in advance. The first batch was due to reach Ukraine in November, but Datasel reported problems and repeatedly delayed delivery.
Despite the setbacks, Estonia signed two more contracts with the company, eventually bringing total advance payments to around €70 million. The money came from the EU’s European Peace Facility, which has been extensively used to fund weapons and other military assistance for Kiev. Tallinn is now disputing the contracts in a case before the European Court of Arbitration in Strasbourg.
The government acknowledged the blunder, with Pevkur taking the “political responsibility” and announcing his resignation. The outgoing minister, who will stay in the role until a replacement is picked, appeared, however, to shift the blame for the affair on the country’s procurement authority, the Estonian Center for Defense Investments (RKIK).
“The defense minister does not conduct contract negotiations. The defense minister does not count socks and ammunition. The defense minister makes the fundamental decision to support Ukraine,” Pevkur said.
RKIK head Elmar Vaher acknowledged that his agency was to blame for the scandal, but shifted the responsibility to his predecessor, Magnus-Valdemar Saar.
“I have been familiar with the matter since January. I cannot see inside people’s heads to know how they were thinking and what the main arguments behind their decisions were,” Vaher told ERR. “The decision was made by RKIK’s former director general.”
It is unclear to what extent the contracts remain unfulfilled, since Estonian officials provided conflicting accounts. Pevkur said “tens of millions of euros’ worth of the ammunition” were delivered and are currently sitting “in a warehouse in a European country.”
The shells, however, were “not of sufficient quality” to send to Ukraine, according to the outgoing minister. The Defense Ministry’s secretary-general, Kaimo Kuusk, described the consignment as “wholly incomplete.” The Eesti Ekspress report called the munitions useless and faulty.