The Ministry of Economic Affairs and Communications (MKM) is seeking to recover €1.33 million, which was paid to the Estonian Chamber of Commerce and Industry (EKTK) in 2023 for hiring international experts.

Minister of the Economy and Industry Liina Vahtras (Reform) has ordered EIS to repay the money.

EKTK director general Mait Palts submitted successful bids for the contracts while simultaneously serving on EIS' supervisory board, which oversaw the procurement. He also signed the resulting agreements.

EIS board chair Ursel Velve disputed the finding of a conflict of interest, point out that the European Union had identified only the appearance of one.

Palts has also argued that the arrangement was not a grant but a procurement of services by EIS to help Estonian companies enter foreign markets.

He resigned from the agency's supervisory board this spring, after the issue came to light.

While the MKM found the risk was indirect because the money went to a business association rather than directly to companies, however, an audit by the Finance Ministry disagreed that there had been no conflict of interest.

'The rules are strict'

The MKM's foreign funds chief, Rando Härginen, said Finance Ministry audit could not establish whether the perceived risk had materialized. But EU funding rules are strict, he acknowledged, leaving little room for a different outcome.

"Unfortunately, the rules governing this funding source are so strict that this process simply has to end this way," Härginen said.

Various officials resigning from public positions, he added, are a matter of each individual's personal ethics and conscience.  

The EIS will not appeal the decision and has agreed to repay the €1.33 million. Velve said the agency would cover the cost using savings from efficiency measures introduced this year.

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