Police have opened a criminal investigation into an Israeli drone manufacturer that allegedly attempted to bomb the Armenian military on behalf of Azerbaijan during a demonstration of one of its unmanned kamikaze aerial vehicles earlier this year.

“An investigation is ongoing against Aeronautics Defense Systems Ltd. in regards to a deal with a significant customer,” police said in a statement Tuesday.

The Israel Police’s Unit of International Crime Investigations, known in Hebrew by its acronym Yahbal, is leading the investigation.

Get The Times of Israel's Daily Edition by email and never miss our top stories Free Sign Up

News of the investigation came out on Monday as an Israeli court approved a gag order for the case, limiting the information that can be published about it.

For instance, police would not identify the “significant customer.”

In a statement, Aeronautics said it would “fully cooperate with any examination on any issue and would work to the best of its capabilities so the investigation will be as swift as possible.”

The gag order shows that the company has been under investigation since at least September 4, a few weeks after the initial allegations came out regarding its live-fire demonstration against Armenia.

The company has also reportedly had dealings with the Myanmar military junta, which is accused of ethnic cleansing for its treatment of the country’s Muslim Rohingya minority.

In late August, the Defense Ministry Defense Export Controls Agency halted Aeronautics’ export license for its Orbiter 1K model UAV to a “significant customer,” which the company reported to the Israeli stock exchange, as required by law.

According to Aeronautics, the company was poised to make a NIS 71.5 million ($20 million) deal over the next two years with the “significant customer.”

“The company is working to clarify the issue with the Defense Ministry,” Aeronautics said in its statement at the time.

The company noted that the Defense Ministry’s decision only affected the sale of its drone to the “significant customer” and not to other foreign buyers.

As a rule, Israeli defense contractors refrain from naming their customers directly. However, it could be understood from the statement that the country in question was Azerbaijan.

The decision to halt the sale came approximately two weeks after a complaint was filed with the ministry saying that the company had, at the request of the Azeris, launched one of its Orbiter 1K model drones at Armenian forces in the contentious Nagorno-Karabakh region.

Colonel Armen Gyozalian of the Armenian army said two soldiers were lightly wounded in the attack on July 7, according to the Armenian defense ministry’s “Hay Zinvor” news outlet.

A copy of the complaint was first leaked to the Maariv newspaper.

According to the report, the firm sent a team to the Azerbaijan capital Baku to demonstrate the unmanned aerial vehicle, which can be outfitted with a small explosive payload, 2.2 to 4.4 pounds (one to two kilograms), and flown into an enemy target on a “suicide” mission.

According to the complaint, while demonstrating the Orbiter 1K system to the Azerbaijani military sometime last month, the company was asked to carry out a live-fire test of the system against an Armenian military position. The two countries have been been fighting sporadically for nearly 25 years. The conflict has ramped up over the last 16 months over the breakaway region of Nagorno-Karabakh.

Such a test would be illegal under Israeli law, as it would require a seldom-granted permit to carry out demonstrations against real targets. In this case, Aeronautics Defense Systems would be even less likely to receive such a permit, as Israel does not consider Armenia to be an enemy state.

The two Israelis operating the two Orbiter 1K drones during the test refused to carry out the attack, despite threats from their superiors, Maariv reported.

Two higher-ranking members of the Aeronautics Defense Systems delegation in Baku then attempted to carry out the Azerbaijani request, but, lacking the necessary experience, did not directly hit their targets, the report said.

The Yavneh-based Aeronautics denied the assertion when reports first came out, saying it “has never carried out a demonstration against live targets, including in this case.”

The Defense Ministry confirmed it was investigating the issue, but would not discuss the case further.

“As a rule, the Defense Ministry does not comment on issues concerning defense exports. The allegation is being investigated by relevant figures in the ministry,” a spokesperson said in a statement this month.

Aeronautics Defense Systems, which specializes in UAV technology, manufactures other drones that are similar to the Orbiter 1K but lack its attack capabilities and can only be used for reconnaissance. Azad Systems, a subsidiary of Aeronautics Defense Systems that is run by the Azerbaijani defense ministry, currently manufactures at least two models of the Orbiter platform. Azerbaijani news outlets have reported that the country has its own Orbiter kamikaze drones as well.

Last year, Azerbaijan used another Israeli kamikaze drone, an Israeli Aerospace Industries Harop-model, in an attack on a bus that killed seven Armenians.

Azerbaijan is one of the largest importers of Israeli military equipment and is seen as an important ally to the Jewish state, given that it shares a border with Israel’s nemesis, Iran. Last year, the country’s president, Ilham Aliyev, revealed Azerbaijan had purchased some $5 billion worth of weapons and defense systems from Israel.

In 2012, Foreign Policy reported that Israel had reached an arrangement with Azerbaijan allowing it to potentially fly sorties out of the country.

“The Israelis have bought an airfield,” a senior US administration official told the magazine at the time, “and the airfield is called Azerbaijan.”

Israel has come under internal criticism for its cooperation with Azerbaijan over the country’s reported human rights violations, despite it being one of the few majority Muslim countries with which Israel enjoys an openly positive relationship.