Archive · 5 Sep 2026
Estonia Defence Minister Resigns Over Ukraine Shell Deal
Estonia made a deal to buy artillery shells for Ukraine.
The deal was worth about €70 million and used money from the European Union.
The shells were supposed to arrive in late 2024, but deliveries were delayed.
Estonia says the ammunition it received was incomplete and did not meet its quality rules.
The supplier, Datasel, disagrees and says it delivered a lot of ammunition and could have finished the order.
Estonia cancelled the contracts and is trying to recover its money through legal action.
Auditors also found other problems with how Estonia managed defence money and equipment.
Defence Minister Hanno Pevkur resigned, saying he accepted political responsibility, although he said he did not negotiate the individual contracts.
Hanno Pevkur resigned as Estonia’s defence minister, accepting political responsibility for problems within his ministry.
Estonia paid about €70 million in advances for Ukrainian artillery ammunition from Datasel S.R.L., acquired by Neco Defence Munitions in 2024.
Deliveries were delayed, and Estonia terminated the contracts, saying the ammunition was incomplete and failed quality requirements.
Datasel disputes Estonia’s account, saying it supplied substantial ammunition and could have completed delivery if the contracts had not been terminated.
An audit found wider weaknesses in defence contracting, asset monitoring and accounting, while Estonia seeks recovery of the money and legal proceedings continue.
- Who
- Estonian Defence Minister Hanno Pevkur, Estonia’s Centre for Defence Investments, Datasel S.R.L. and Neco Defence Munitions.
- What
- Pevkur resigned amid a disputed €70 million ammunition procurement for Ukraine and broader criticism of defence-sector financial management.
- When
- The contracts were signed in 2024, and Pevkur resigned in September 2026, according to the provided reporting.
- Where
- The procurement was handled in Estonia and involved an Italian-registered supplier acquired by an Indian company; related proceedings are taking place in Estonia and before the European Court of Arbitration in Strasbourg.
- Why
- Pevkur said he was accepting political responsibility after criticism of the procurement and an audit identified weaknesses in defence contracting, monitoring and accounting.
Estonia’s Account
Datasel’s Account
Delivery and quality
Estonia’s Account
Estonia says deliveries were delayed and that the ammunition received was incomplete and failed contractual quality requirements.
Datasel’s Account
Datasel says it supplied a substantial quantity of ammunition and could have fulfilled the contracts if Estonia had not terminated them.
Contract termination
Estonia’s Account
Estonia terminated the contracts and is seeking recovery of the advance payments through legal action.
Datasel’s Account
Datasel disputes the termination and rejects allegations of wrongdoing.
Responsibility for the procurement
Estonia’s Account
Pevkur accepted political responsibility for problems in his ministry while pointing to RKIK as the agency that handled the detailed procurement process.
Datasel’s Account
The supplier’s position is that supply-chain issues and the termination, rather than wrongdoing by Datasel, explain the dispute.
- Procurement value
- About €70 million, described as approximately ₹769 crore.
- Intended use
- Artillery ammunition for Ukraine.
- Funding source
- The European Union’s European Peace Facility.
- Supplier
- Italian-registered Datasel S.R.L., acquired by Neco Defence Munitions in March 2024.
- Estonian agency
- Estonia’s Centre for Defence Investments, or RKIK, signed four contracts with Datasel.
- Audit adjustment
- The Defence Forces increased their recorded inventory by €99.7 million, from €723.9 million to €823.6 million, without supporting documentation cited by the audit.
- EU review
- The European Commission is examining whether Estonia may have to repay the €70 million; no repayment order had been announced in the reporting.