Telemus Systems filed for bankruptcy in August after the Canadian government imposed an arms embargo on Turkey last year.
Canadian defence company Telemus Systems has gone bankrupt as a result of an arms embargo imposed by Ottawa on Turkey.
The company filed for bankruptcy last August after it lost its primary customer, Turkish Aerospace Industries (TAI), the Middle East Eye reported on Wednesday, citing a report by the trustee KPMG.
The Canadian government imposed an arms embargo on Turkey in 2020.
Telemus Systems was selling a wide range of intelligence and electronic support systems to TAI for a military drone named TAI Anka.
“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 report said.
“As a result of the government sanctions, the company was no longer able to generate any revenue."
The Canadian government cancelled the company's Turkish export permits in April 2021, dealing the final blow to the company.
Telemus suffered a net loss of $360,000 in 2020 and reported a net loss of $1.1 million in 2021, before closing down its operation on July 31, according to the report.
Canada cancelled all defence exports to Turkey earlier this year after a probe found that Canadian technology was used in the Azerbaijan-Armenia conflict, the country's foreign affairs minister said.
Ottawa initially imposed an embargo citing Turkey's military operations in Syria in 2019. But, in June 2020, it approved the sale of drone optics after high-level talks with Turkey, the Middle East Eye reported.
However, the Canadian government suspended military exports to Turkey the following October.