As reported by ERR News Wednesday, a logistics firm which the prime minister's husband, Arvo Hallik, has a 24.8 percent stake in, continued to do business in Russia after the February 2022 full-scale invasion of Ukraine.

The prime minister said Wednesday that Hallik does not have any clients who are entrepreneurs from the Russian Federation itself, while the company, Stark Logistics, says it is working towards wrapping up the freight haulage to Russia it does still carry out. This activity is done on behalf of a sole client, Estonian firm Metaprint, which makes aerosol cans and other metal containers.

Isamaa chair and former foreign minister Urmas Reinsalu says that the prima minister has been blatantly hypocritical in the matter.

Reinsalu noted that Estonia has consistently stood for a strong sanctions policy internationally, against Russia and Belarus. "Now the media claims that the company involving participation from prime minister's husband continues to transport goods to Russia during this genocidal war."

"What is more, the prime minister has personally credited the holding company (Hallik's Novaria Consult OÜ – ed.), which is a shareholder of the company, with a large sum of money. In accordance with the truth as presented in the press, the prime minister is acting in a blatant hypocrisy. This is shameful for Estonia," Reinsalu went on.

As reported by ERR News, Kallas loaned €350,000 to Hallik, ostensibly for investment purposes.

Isamaa's leader called the situation a question of ethics, asking rhetorically what the reaction might be if such information were received about the head of government of any other European country.

"The head of government having a personal connection with doing business with Russia represents a betrayal of the principles we protect by supporting Ukraine," Reinsalu added.

"What makes this scandal particularly repellent is the fact that, during the previous government, Isamaa proposed the government to end trade with Russia and cooperate with the Baltic states. The Prime Minister of Ukraine personally asked me to do this last March. But then the Prime Minister of Estonia and her party did not support this proposal," the Isamaa chair went on.

Isamaa was in office with Reform and SDE from July 2022 to April this year. Isamaa is now in opposition while SDE remains in coalition with Reform, and Eesti 200.

According to Riigikogu member Raimond Kaljulaidi (SDE), the business activity of a company with the participation of the prime minister's husband raises a whole series of uncomfortable questions in Russia and may also be fatal for Kallas as prime minister.

SDE MP Raimond Kaljulaid said these business dealings raise a whole series of uncomfortable questions, and may also have dealt a fatal blow to Kallas as prime minister, given her husband's participation in a company which has had dealings with Russia in recent times.

"This news is most likely to become the biggest scandal of Kaja Kallas' political career, one which can prove fatal for Kallas as prime minister," Kaljulaid said.

According to Kaljulaid, Kallas' clear and unequivocal stated public views on Russia's aggression against Ukraine have been behind much of her popularity over the last year and a half, as well as her party's strong showing at the March 5 Riigikogu elections.

Kaljulaid added that: "The fact that all this time the prime minister's husband has held a stake in a transport firm that carries out haulage in Russia and has continued this line of business even after the full-scale invasion, right down to the present, does not sit very well with this narrative."

This is exacerbated by the consistency with which Kallas international reputation and presence in the international media through the current conflict has continued, all accompanied by the same determined and emphatic rhetoric against Russia at a time when some other Western European nations had been seen to waver on the issue.

The Conservative People's Party of Estonia's (EKRE) MEP, Jaak Madison, has called on Kallas to resign, to avoid further reputational damage to the country.

Writing on his social media account, Madison said the prime minister has been stressing the unethical nature of doing business with an aggressor country for a year-and-a-half now, and has stood firmly on the side of the victimized country, ie. Ukraine, yet her husband has earned income in this situation, while as his spouse the prime minister too has benefited from this, meaning she should step down.

"She should do so already, so that Estonia does not suffer damage to its reputation when the prime minister is duplicitous and her husband conducts economic dealings with Russia. End of story," Madison went on.

EKRE is in opposition at the Riigikogu.

The party's chair, Martin Helme, agreed with Madison that Kallas cannot remain as prime minister "neither due to your brutal duplicity nor in the interests of Estonia's reputation," he said.

Center Party MP and former health minister Tanel Kiik said that, since Russia's full-scale war on Ukraine has lasted for 18 months now, this is enough time for all companies to have readjusted their operations and halted doing business with or in Russia.

"Prime Minister Kaja Kallas has been one of the most active advocates of sanctions, both in Estonia and in Europe, and has emphasized the importance of their monitoring and enforcement," Kiik, Center's chief whip at the Riigikogu, said.

"The Prime Minister must explain then, to both the public and the Riigikogu, why she does not demand the same behavior from a company which involves her husband's participation. This issue is all the more critical as it is now known that the prime minister had loaned €350,000 to her husband's company Novaria Consult OÜ, which in turn is one of the owners of Stark Logistics AS, which in turn does business with Russia," Kiik, who is one of two candidates for the Center leadership election next month, went on.

Kiik added it certainly looks like certain rules and requirements apply to some businesspeople and not to others. "We must not allow such a situation to arise in the Republic of Estonia," he added.

SDE chair and interior minister Lauri Läänemets said that Kallas and Hallik need to elaborate on the extent to which the prime minister was aware of her husband's firm's activities.

"What makes the whole story particularly disturbing is the fact that we in the government have had a zero tolerance for any kind of business related to Russia. This has been the case since the attack on Ukraine in 2022. When doing business with an aggressor country, you cannot only do business at the same time as having sanctions, and acting on the principle of 'what is not prohibited is permissible'. This is also if the business is not conducted directly with Russian partners, but with partners operating in Russia," the SDE leader said.

When placed alongside business activity, Estonia's international reputation is the larger concern, while Läänemets noted the poignancy of the current saga given the extent to which Kallas had been a leading figure in standing up for Ukraine within an international context. 

He said: "Kaja Kallas has done an extremely good job of making Estonia's voice in support of Ukraine resound around the world. In the light of today's revelations, I am seriously concerned about the effect of the questions related to the prime minister's status, on Estonia's international reputation and credibility, in other words how seriously we will be taken any more."

"Instead of conveying the messages we need, both the prime minister and the Estonian diplomatic corps must work hard in the coming weeks to defend Estonia's reputation and credibility both in the eyes our allies and, of course, the government and people of Ukraine," the interior minister went on.

Comment was not obtained from the other elected political party, Eesti 200, in office with Reform and SDE.

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