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What is the story about?
Estonia’s Defence Minister Hanno Pevkur has resigned, taking political responsibility for a controversial €70 million procurement deal for artillery ammunition intended for Ukraine and funded through the European Union’s European Peace Facility.
Pevkur announced his resignation on Wednesday after the Baltic nation’s National Audit Office raised concerns over the country’s defence establishment and military procurement agency, the Estonian Centre for Defence Investments (ECDI).
The controversy centres on contracts signed by the ECDI with Datasel SRL, an Italian-registered company acquired in March 2024 by Nagpur-based Neco Defence Munitions, part of the Jayaswal Group, according to a report on The Print.
Citing Estonia’s public broadcaster ERR a report on Euro News said, neither Datasel nor its Indian owner had previously manufactured or sold artillery shells.
What happened?
The ECDI signed its first contract with Datasel in August 2024 and paid €15 million upfront. A second contract followed in October, with an advance payment of more than €10 million. Further agreements took total advance payments to about €70 million, according to Euro News.
The ammunition was initially due to reach Ukraine in November 2024, but deliveries were delayed. Estonia has since terminated the contracts and taken the dispute to arbitration, while seeking to recover the money.
The European Commission is also in discussions with Estonia over whether the €70 million provided through the European Peace Facility must be repaid, the Euro News report added.
Commission spokesperson Christian Wigand said Brussels was in contact with Estonian authorities and pointed to safeguards and recovery mechanisms intended to ensure EU funds are properly used, according to Euro News report.
Why is it significant?
The procurement took place as European countries were scrambling to increase artillery ammunition supplies to Ukraine amid severe shortages during its war with Russia.
The European Peace Facility, an EU funding mechanism established before Russia’s full-scale invasion, has increasingly been used to finance military assistance and equipment for Ukraine.
Pevkur said he was not involved in negotiating individual contracts but accepted political responsibility for the ministry.
“The defence minister does not conduct contract negotiations. The defence minister does not count socks and ammunition,” Euro News report quoted him as saying on Estonian public broadcaster ETV.
Datasel disputes Estonia’s claims
Datasel has rejected Estonia’s account of the dispute. The company said it was “the victim” and disputed the grounds for terminating the contracts. It said it had supplied and invoiced €58 million worth of material against €59 million in advance payments.
Datasel also said inspections had not established quality problems and blamed delays on approvals and documentation involving multiple governments and regulatory authorities.
The company said the ECDI later refused to accept material ready for delivery or already in production before terminating the agreements.
The dispute is now before arbitration, while Estonia and the European Commission work on recovering the EU-funded money.
Pevkur announced his resignation on Wednesday after the Baltic nation’s National Audit Office raised concerns over the country’s defence establishment and military procurement agency, the Estonian Centre for Defence Investments (ECDI).
The controversy centres on contracts signed by the ECDI with Datasel SRL, an Italian-registered company acquired in March 2024 by Nagpur-based Neco Defence Munitions, part of the Jayaswal Group, according to a report on The Print.
Citing Estonia’s public broadcaster ERR a report on Euro News said, neither Datasel nor its Indian owner had previously manufactured or sold artillery shells.
What happened?
The ECDI signed its first contract with Datasel in August 2024 and paid €15 million upfront. A second contract followed in October, with an advance payment of more than €10 million. Further agreements took total advance payments to about €70 million, according to Euro News.
The ammunition was initially due to reach Ukraine in November 2024, but deliveries were delayed. Estonia has since terminated the contracts and taken the dispute to arbitration, while seeking to recover the money.
The European Commission is also in discussions with Estonia over whether the €70 million provided through the European Peace Facility must be repaid, the Euro News report added.
Commission spokesperson Christian Wigand said Brussels was in contact with Estonian authorities and pointed to safeguards and recovery mechanisms intended to ensure EU funds are properly used, according to Euro News report.
Why is it significant?
The procurement took place as European countries were scrambling to increase artillery ammunition supplies to Ukraine amid severe shortages during its war with Russia.
The European Peace Facility, an EU funding mechanism established before Russia’s full-scale invasion, has increasingly been used to finance military assistance and equipment for Ukraine.
Pevkur said he was not involved in negotiating individual contracts but accepted political responsibility for the ministry.
“The defence minister does not conduct contract negotiations. The defence minister does not count socks and ammunition,” Euro News report quoted him as saying on Estonian public broadcaster ETV.
Datasel disputes Estonia’s claims
Datasel has rejected Estonia’s account of the dispute. The company said it was “the victim” and disputed the grounds for terminating the contracts. It said it had supplied and invoiced €58 million worth of material against €59 million in advance payments.
Datasel also said inspections had not established quality problems and blamed delays on approvals and documentation involving multiple governments and regulatory authorities.
The company said the ECDI later refused to accept material ready for delivery or already in production before terminating the agreements.
The dispute is now before arbitration, while Estonia and the European Commission work on recovering the EU-funded money.
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