Estonia’s Defense Minister Resigns Amid Ukraine Ammunition Procurement Scandal

MILAN — Estonian Defense Minister Hanno Pevkur has stepped down from his role, which he held since 2022, amid a €70 million ($81 million) procurement controversy linked to unsuccessful European Union-backed artillery shell deliveries intended for Ukraine.

In an official statement released on X, the Estonian Ministry of Defense acknowledged Pevkur’s resignation, praising his leadership in national defense and unwavering support for Ukraine. “He has served as Minister of Defense since July 18, 2022, during which time Europe’s security landscape has undergone significant changes,” the statement read, without specifying the cause of his departure.

The resignation follows findings from the Estonian National Audit Office (Riigikogu) in its August 28 annual report, which highlighted serious deficiencies in the management and oversight of defense-related contracts by agencies under the Ministry of Defense.

According to the audit, the Defense Investment Centre (RKIK) entered into contracts that exposed the national budget to financial liability, contradicting assurances provided to parliament. The report further revealed that these risky agreements were deliberately concealed from auditors the previous year.

Under the State Budget Act covering 2024–2025, the Estonian Ministry of Defense was authorized to facilitate military equipment purchases for allied nations using non-domestic funds, thereby shielding local taxpayers from direct risk. However, the audit raised concerns that approximately €70 million advanced to suppliers may ultimately be reclaimed from the state budget due to undelivered goods and ongoing disputes with vendors.

The National Audit Office flagged that while €138.4 million in pre-payments had been made in 2025 under this framework, complications with key suppliers—particularly Datasel SRL—had resulted in unmet deliveries and legal action initiated by RKIK.

On September 2, more details surfaced regarding the contracts and involved parties, as reported by Eesti Ekspress. It was revealed that in 2024, the Estonian government contracted Italian-registered Datasel SRL—a company owned by India-based Neco Defense Munitions—for artillery shells destined for Ukraine. Notably, neither organization has a track record in ammunition sales.

Local broadcaster ERR detailed that the RKIK made an initial payment of €15 million to Datasel in August 2024, followed by another €10 million in October. Although the first shipment of projectiles was expected in November, delays and quality issues arose. Undeterred, additional contracts worth a total of €70 million were signed, drawing funds from the EU’s European Peace Facility.

In an interview with Estonian Public Broadcasting (ETV) on September 2, Pevkur admitted he had not reviewed the specific artillery contracts but emphasized that such operational matters fell outside his responsibilities. “The defense minister does not negotiate contracts or manage ammunition inventories,” he stated. “My role involves making strategic decisions to bolster Ukraine’s defense, while the preparatory work and vendor selection are handled by RKIK.”

At the time of writing, neither Datasel nor the Estonian Ministry of Defense had responded to requests for comment on the ongoing legal proceedings.

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