The Defense Export Controls Agency in the Ministry of Defense is continuing its investigation of a complaint recently submitted against Yavne-based unmanned aerial vehicle (UAV) manufacturer Aeronautics Ltd. (TASE:ARCS) concerning a controversial incident last July in Azerbaijan. According to the complaint, which led to the suspension of Aeronautics's license to export to Azerbaijan, two Aeronautics representatives were asked to aim an Orbiter 1K "suicide drone" at a manned Armenian army position as part of a live demonstration in an attempt to highlight the UAV's ability to fly over the target, home in on it, and explode on it precisely.
According to reports in recent weeks, when the company's representatives expressed opposition to attacking an Armenian army position, more senior company officials continued with the demonstration, and the UAV exploded several dozen meters from the position. There were no casualties in the incident.
Aeronautics absolutely denied the allegations in the complaint submitted to the Ministry of Defense. The company stated, "The company markets its products to customers in 50 different countries, strictly in compliance with approvals from the Defense Export Control Agency. Operational use is always solely by the buyer, and at his responsibility. Aeronautics never conducts demonstrations on live targets, and this is also true in the case in question."
The Ministry of Defense declined to respond to the report, or to provide particulars about progress in its investigation of the matter. At the same time, defense sources said that the complaints were still being checked, and the permit under which Aeronautics was due to sell Orbiter 1K UAVs to Azerbaijan could not be renewed until the probe is completed.
Azerbaijan is an important customer for Aeronautics. Defense industry sources estimated that 20% of the company's sales are to this market. The sources added that Azerbaijan already has Orbiter 1K UAVs, as well as other models of suicide UAVs and tactical UAVs used for short and medium-range intelligence gathering missions.
Another source involved in the matter asserted that it cannot be ruled out that the reason for the complaint against Aeronautics filed at the Ministry of Defense was commercial competition between defense companies. "The Azeris possess suicide UAVs in any case, including the type of UAV for which the demonstration was held. Had they wanted to attack an Armenian position, they would have done it themselves. It is not unlikely that another defense company dealing in UAVs is behind this proceeding," the source argued.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 30, 2017
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