Estonian Defense Minister resigns following Ukrainian ammunition procurement scandal

MILAN — Estonian Defense Minister Hanno Pevkur has resigned from his position, which he has served in since 2022, following a €70 million ($81 million) procurement scandal reportedly involving failed European Union-funded artillery projectile deliveries for Ukraine.

“Defense Minister Hanno Pevkur has resigned — thank you for leading Estonia’s national defense and for your steadfast support for Ukraine. He has served as Minister of Defense from 18 July 2022 and during this time Europe’s security environment has changed significantly,” the Estonian Ministry of Defense wrote in a statement today on X. It did not disclose the reason behind Pevkur’s departure.

On August 28, the Estonian National Audit Office (Riigikogu) 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. “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. The Estonian Ministry of Defense did not respond to a request for comment and clarification of details reagrding the legal proceedings at the time of writing.

On Sept 2, 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.

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 a Sept. 2 interview with Estonian ETV news show Aktuaalne kaamera, Pevkur acknowledged 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. 

Datasel did not respond to a request for comment on the matter, at the time of writing.