Key facts
- Estonian Defense Minister Hanno Pevkur resigned on September 2.
- The resignation is linked to a 70 million euro (approximately $81.1 million) faulty ammunition deal for Ukraine.
- The contract was awarded to Datasel S.R.L., an Italian-registered company owned by India's Neco Defense Munitions.
- Estonia's National Audit Office criticized the defense ministry's procurement practices.
- A criminal investigation has been initiated by the Prosecutor's Office.
Estonian Defense Minister Hanno Pevkur announced his resignation on September 2, taking political responsibility for a significant financial loss incurred through a faulty ammunition deal intended for Ukraine. The deal, valued at 70 million euros (approximately $81.1 million), involved purchasing artillery shells from Datasel S.R.L., an Italian-registered company owned by India's Neco Defense Munitions. Despite advance payments made by Estonia's Center for Defense Investments (RKIK), the company repeatedly delayed shipments, and the shells that eventually arrived in 2025 were reported as faulty and unusable.
Pevkur stated that while he was not personally involved in contract negotiations or the minute details of procurement, he accepted political responsibility as per the findings of the National Audit Office. The audit, released on August 28, criticized the defense ministry's military procurement practices in recent years, bringing the costly error to light and prompting calls for his resignation.
Estonia's defense spending has seen a substantial increase since Russia's full-scale invasion of Ukraine in 2022, with projections showing it rising to 5.4% of GDP by 2026. The National Audit Office has previously flagged risks of state fund misuse. Following Pevkur's resignation, Prime Minister Kristen Michal convened a cabinet meeting. The Prosecutor's Office has also initiated a criminal investigation into the matters highlighted in the audit reports.
Despite this setback, Pevkur expressed confidence in Estonia's strengthened national defense and the continued importance of supporting Ukraine for regional security. The Baltic nations, including Estonia, are actively scaling up their defense capabilities in response to perceived Russian threats.