Estonian defense minister resigns following Ukrainian ammo procurement controversy

MILAN — Estonian Defense Minister Hanno Pevkur has resigned from his position, following reports of a €70 million ($81 million) procurement controversy allegedly involving failed European Union-funded artillery projectile deliveries for Ukraine.

“As defense minister, I of course have to recognize that I am responsible for the entire area under my minister and if you’re waiting for that big answer, then, of course, a leader must have both the courage and stature to take responsibility as a matter of political responsibility, even when there is none,” Pevkur, who has served as minister of defense since 2022, said during an interview with Estonian ETV news show Aktuaalne kaamera on Wednesday. “I will take that responsibility, and the Prime Minister will have to find a new defense minister.” 

The Estonian Ministry of Defense acknowledged Pevkur’s resignation the same day, thanking him in a social media post for “leading Estonia’s national defence and for [his] steadfast support of Ukraine.”

The leadership shakeup came days after the Estonian National Audit Office (Riigikogu) on Aug. 28 published its annual report on the state of accounts and the legality of transactions conducted, in which it identified several significant issues in the activities of the institutions under the MoD. These included continued shortcomings in the administration, monitoring and implementation of contracts, as well as checking the conformity and arrival of received goods.

“The Defense Investment Centre (RKIK) has assumed financial risks and obligations for the Estonian state budget with contracts for the mediation of equipment, although the MoD has claimed the opposite in the budget materials submitted to Riigikogu,” the report said, according to an online translation of the Estonian-language document. “The contracts from which this has now become clear were concealed from the National Audit Office by the RKIK last year.”

Under the State Budget Act 2024-2025, the Estonian MoD was allowed to channel funding to buy military equipment for partner countries without using the country’s own defense budget or risking taxpayers’ money, noted the document.

During 2025, the MoD received €138.4 million in advance payments for such intended mediation, but as the report found, “there is a risk that costs of around €70 million will have to be paid for from the Estonian state budget” at the expense of other planned expenses. The National Audit Office found that this amount, sent to suppliers of goods, was problematic because disputes were ongoing with the producers, as the goods had not been received, and RKIK has gone to court over this in Switzerland.

In an email statement to Breaking Defense, a spokesperson for the Estonian MoD said that “while the majority of our international contracts have been fulfilled as agreed, this specific case proved exceptional.” It added that following on-site inspections, Estonian representatives “identified that the equipment failed to meet required quality standards and remained uncompleted.”

The spokesperson confirmed that claims have been submitted to the Harju County Court in Estonia as well as to the international arbitration in Switzerland. 

On Wednesday additional details emerged about the manufacturer’s identity and which contract this referred to. The Estonian newspaper Eesti Ekspress was first to report that in 2024, the Estonian government signed a deal for artillery shells for Ukraine with the Italian-registered company Datasel SRL, owned by the India-based Neco Defense Munitions. Neither firm is known to have sold ammunition.

The Estonian MoD told Breaking Defense that as the legal and arbitral proceedings are ongoing and confidential, they could not confirm or comment on specific company names, contract values or other details on the ammunition. Datasel did not respond to a request for comment on the matter, at the time of writing.

Estonian national broadcaster ERR reported that in August 2024, the RKIK signed the first contract with Datasel and sent an advance payment of €15 million, followed in October by a second payment of €10 million. The first batch of projectiles was intended to arrive in Ukraine in November, but ERR said Datasel was experiencing delays and problems. 

Despite this, two more contracts were signed for additional deliveries, ERR and Eesti Ekspress reported, with payments totalling €70 million, for which Estonia used funding from the EU’s European Peace Facility. 

During the interview Pevkur gave to Aktuaalne kaamera, he did acknowledge that he had not read the artillery contracts, but confirmed that RRIK had brought them to him, as quoted by ERR. 

“The defense minister does not conduct contract negotiations; the defense minister does not count stocks and ammunition — it makes the fundamental decision to support Ukraine. The preparatory work for contract negotiations and finding contracting partners is RKIK’s responsibility,” Pevkur said during the TV interview. 

UPDATED 9/3/2026 at 9:49am ET.