The agency said that, due to Estonia's small size, decision-makers and business representatives may have close ties and a "revolving-door effect" between the public and private sectors has arisen in recent years.

This has been seen in the national defense sector, it said, with "senior officials" moving into "private-sector roles in the same field they previously regulated or oversaw." 

"Therefore, officials involved in public procurements worth hundreds of millions of euros should be subject to a cooling-off period upon leaving office," the ISS says.

"This would help prevent conflicts of interest in which information, networks or influence acquired in a previous role affects decisions in a subsequent position," the agency said.

Corruption risks in the defense and energy sectors come from the scale of investments and the pressure to make rapid decisions, the agency said. But financial decisions must be made in accordance with the principles of impartiality and equal treatment.

The ISS said to "uphold the principles of fair and equal use of public funds, situations must be avoided in which entrepreneurs seek state support for defense-related product development from former colleagues."

The agency also called for consistent auditing and stronger oversight mechanisms.

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