Estonian defence industry calls for transparency in Ukraine funding

Funding for Estonian defence companies involved in supporting Ukraine is secret, prompting concerns that taxpayer money could be going to intermediaries rather than manufacturers, ERR reported. The Estonian Defence Industry Association said the decision-making process should be more transparent.

The issue was raised during the second annual Defense Week defence industry fair in Tallinn, where one-third of exhibitors are Estonian companies. Many of their products have been used in Ukraine for years, but the companies would not say whether the state had funded them because the information is classified.

The state provides about 100 million euros a year for products proposed by Estonian companies, deemed necessary by Ukraine and approved by the Ministry of Defence together with the Centre for Defence Investment. The basis for those approvals, however, remains unclear.

“We can generally be satisfied with the criteria. I cannot comment on how the decision-making process works. It would certainly be useful to know how decisions are made so companies could prepare for future projects,” said Kalev Koidumäe, chief executive of the Estonian Defence Industry Association.

Defence Minister Martin Herem said the ministry knows exactly from whom the products were bought and where they went. He said there were no questions about that, adding that the identities of the companies were being kept secret for reasons that should be clear “in light of recent days.” He said he did not currently plan to change the policy.

Urmas Reinsalu, chairman of the Isamaa party, said secrecy was not justified, particularly after decisions had been made. The State Budget Control Committee has repeatedly asked for information on how the money was distributed among companies, he said, but had not received it.

Peeter Tali, chairman of the parliamentary National Defence Committee, said he also did not know how the money had been allocated. He promised that the committee would examine whether the funds had gone to companies that manufacture and test their products in Ukraine.

“They can improve and develop their products under wartime conditions. We have that expertise. If necessary, we can produce for our own needs. That was the political intention. Now we probably need to look into whether that intention has become reality or whether it is simply business,” Tali said.

Ines Metsalu-Nurminen, chief auditor at the National Audit Office, said the office had not examined the transactions in its recently completed audit and could not say why they had been classified.

“It is important to stress that not all information can always be considered classified. Some aspects may be classified and must be withheld from the public. But that does not prevent the overall framework of a project and its selection criteria from being discussed publicly,” she said.

Estonia’s defence industry had a turnover of 750 million euros last year, with two-thirds coming from exports.