Canadian Supplier to Turkey's Bayraktar Drones Goes Bankrupt Following Embargo

Canadian firm Telemus Systems Inc. has gone bankrupt after it had to stop supplying military equipment components to Turkey following the Ottawa’s embargo on defense exports to Turkey.

Canada suspended export licenses to Turkey in 2019 during Turkish military incursion into northeastern Syria. Restrictions were then eased but re-imposed during the Nagorno-Karabakh conflict in October 2020 when it was found that Azerbaijan, backed by Ankara, was using drones equipped with imaging and targeting systems manufactured by L3Harris Wescam, the Canada-based unit of L3Harris Technologies Inc. In April 2021, Canada scrapped the export of drone technology to Turkey after it confirmed that some of the Canadian-made systems had been used in Syria and the Nagorno-Karabakh conflict.

The parts under embargo include camera systems fitted on popular Turkish combat drones including Bayraktar TB2 and Anka UAVs.

The ban caused Telemus to lose its main customer, Turkish Aerospace Industries (TAI), ultimately leading to the firm’s bankruptcy, Middle East Eye (MEE) reported late Wednesday.

“Despite the company’s repeated attempts to reach a resolution with Global Affairs Canada, including explaining the material adverse impact on the company’s financial situation and solvency, the company’s Turkish export permits remained suspended,” the MEE report said.

As a result of the government sanctions, the company was no longer able to generate any revenue.