Sutt said Tuesday that: "Companies related to the Russian regime do not have a place in the Estonian marketplace."

A key factor in the sanction decision is that Yandex is required to share personal data with Russian data authorities, at the latter's behest, Sutt added.

He said: "In order to use Yandex NV's services, it is a requirement access to a large amount of personal data processed on the company's servers in Russia is granted. In essence, Russia's special services and political leadership may take advantage of Yandex data and access to the data."

The Internal Security Service (ISS) and the Data Protection Inspectorate (AKI) have both also issued warnings on the use of Yandex in Estonia, for the same reasons.

Russia's own media has reported legislation which obliges taxi hailing services to share order data with the Federal Security Service (FSB) is being prepared.

The data demanded includes a taxi's location and data about its driver.

Leaving Yandex un-sanctioned might also leave a workaround for individuals or companies already hit in the wake of Russia's invasion of Ukraine, Sutt added.

"Since the company is closely linked with the Russian authorities, we have a situation today where Yandex NV's economic activities could benefit those subject to EU sanctions," Sutt said.

The ruling would prohibit Yandex NV from organizing, brokering and providing taxi and other related services in Estonia, on the basis of the International Sanctions Act.

Yandex is one of Russia's leading companies, playing a major role in both the Russian economy and its IT sector.

While the EU may also sanction Yandex, it so far has not done so and so Estonia is to impose its own censures, the minister added.

He said: "Estonia has made its proposals for the discussion of new EU sanctions and we are waiting for a solution across the EU, but in order to achieve a rapid impact, we must restrict the use of this service as soon as possible," adding that an EU-wide ban would be most effective.

The sanctions will likely be developed in cooperation with the Ministry of Economic Affairs and Communications, as well as relevant state agencies, and would restrict effectively both the availability of the Yandex.Go driving application and the services it offers, the ministry said.

The ministry had been considering Yandex's future in Russia for several weeks and in the aftermath of the invasion of Ukraine, which began on February 24.

Sutt's proposal will be put to the cabinet for consideration.

Yandex expanded into the Estonian market in 2018, in direct competition with other ride-hailing apps such as the Estonian-founded Bolt (then known as Taxify). In conjunction with Uber, Yandex set up a joint venture in both Russia and neighboring countries in the following year, with Uber investing a reported €225 million dollars; Yandex €100 million.

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