Estonian defence minister resigns as procurement system problems come to light
Estonia's defence minister Hanno Pevkur has stepped down following a scandal over a failed artillery shell deal funded with money meant for Ukraine, while the state auditor and prosecutors continue uncovering broader problems in defence procurement and accounting.
Estonian Defence Minister Hanno Pevkur lost his post following a crisis in the defence sector, deepened by a scandal that broke this week. According to Eesti Ekspress, in 2024 Estonia signed a contract for artillery shell deliveries to Ukraine with Datasel, a company registered in Italy but actually owned by Indian businessmen, which had no prior experience producing artillery ammunition.
Defence Ministry Chancellor Kaimo Kuusk explained that major manufacturers were booked years in advance at the time and did not produce the calibre Ukraine needed, leaving limited choice of suppliers. Despite the supplier's lack of experience, Estonia transferred about 70 million euros in advance to Datasel from the European Peace Facility, funds intended for military aid to Ukraine. Ukraine never received the shells; ammunition delivered later turned out to be of poor quality, and Estonia terminated the contract and is now trying to recover the money through court.
Ministry officials and former Defence Forces commander Martin Herem defended the risk-taking, arguing that inaction to help Ukraine would have been far more dangerous. Former head of the Estonian Centre for Defence Investments (RKIK) Magnus-Valdemar Saar said he had coordinated the decision with the ministry, while the ministry places responsibility on the centre's leadership.
Wider accounting problems
State Auditor Janar Holm said clear problems exist both in the accounting of Defence Forces property and in RKIK's procurement processes, and the situation is worsening as defence spending grows faster than the system for managing it improves. Auditors could not confirm stockpiles worth 1.2 billion euros, with a further 70 million euros assessed as budget risk — this does not mean funds vanished, but reflects accounting shortcomings.
Herem said part of the chaos stems from the system itself, since identical items purchased in different years get recorded under different accounting rules, creating enormous administrative burden. Kuusk acknowledged that investment is also needed in auditing, internal control and a modern logistics system.
Prosecutor General Astrid Asi noted that the state auditor had flagged these problems for years without them being fixed, and prosecutors are examining whether oversight bodies were deliberately denied access to some requested documents.
