Estonia enters legal dispute over 70 million euro ammunition prepayment

Estonia is involved in a legal dispute after paying approximately 70 million euros in advance to Datasel, an Italian company owned by Indian interests, for ammunition intended for Ukraine. The State Defence Procurement Centre (RKIK) signed four contracts with the firm despite its lack of prior experience in selling munitions.

Issues arose regarding delivery timelines and the quality of the goods received, which were described as insufficient. Consequently, Estonia terminated the contracts and initiated legal proceedings. There are significant concerns that the 70 million euro prepayment may not be recovered, potentially forcing the state to cover the loss from the national budget.

A recent audit by the National Audit Office identified serious problems within the Ministry of Defence's management of assets and contracts, increasing the risk of misuse of state funds. In response to these findings, Prime Minister Kristen Michalk has called for a government cabinet meeting to discuss deficiencies in defense sector accounting and contract administration.