ARCA's founder was suspected of manipulating NATO contracts for money. Last year, the US Department of Justice unexpectedly dropped the charges days after a high-level meeting between the presidents of Turkey and the United States.

"One of the reasons this ammunition factory decision has been delayed was precisely the need for background checks, and reportedly Estonia's security authorities have also reviewed this case and the associated risks. Naturally, this does not leave a good impression of the business leader. Now it is his responsibility to prove his reliability here in Estonia as well," said Estonian security expert Meelis Oidsalu.

"An ammunition factory is a high-risk enterprise, and if there are any suspicions regarding the ownership or management, the state must — and will — take a close look at what is involved and whether those suspicions are justified. Carrying out such background checks is entirely routine, and I am quite certain that the Estonian Internal Security Service (ISS) will do so," said Erkki Koort, head of the Institute of Internal Security at the Estonian Academy of Security Sciences.

As part of the tender, ARCA had to demonstrate there were no disqualifying factors preventing it from building an ammunition factory. In addition, the Ministry of Defense examined the company's background using public sources. According to Defense Minister Hanno Pevkur, what stood out in particular was that the company's turnover exceeds €3 billion and it is very active on the international ammunition market. A large share of its production is sold to the US armed forces. Pevkur also emphasized that ARCA is a NATO company.

"As to whether something has been swept under the rug somewhere or not, that is very difficult for me to answer. Our agencies will certainly conduct a thorough review when it comes to issuing an operating license. This cannot be done during the tender process, but once the relevant permits for operating in Estonia are applied for — firearms permits and all other necessary licenses — those checks will be conducted very thoroughly," Pevkur said when asked whether Estonia should be concerned because of the corruption case.

It is likely ARCA will still obtain the necessary permits, as the earlier suspicions have not led to any concrete outcomes elsewhere.

"In the case of any suspicions, one must take into account that there has to be some kind of proven or investigative conclusion," Oidsalu said.

At the same time, the company could later come under additional monitoring by the ISS.

"Companies like this inevitably have to engage in day-to-day cooperation with security authorities and the police in order to minimize risks. In that respect, I am completely sure it will be standard practice, so that nothing unexpected happens and everything remains secure," Koort said.

ARCA Baltics Operations will primarily produce 155-millimeter artillery ammunition in Põhja-Kiviõli defense park. The company will invest €300 million and create up to 1,000 new jobs.

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