CybAero Demos For China’s AVIC While Embargo Controversy Brews In Sweden

First North-listed CybAero, which develops and markets unmanned helicopters, has performed demo flights on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million.

The news comes only days after Swedish Defence Minister Karin Enström has demanded an explanation from the general director of the state-run FOI defence research institute, over an alleged weapon's co-operation with China, according to Radio Sweden.

"Sweden should not get around the weapon's embargo on China and therefore I have called on the general director to clarify that there is no substance in this," Enström told Swedish Radio News.

According to reports, the agency had begun negotiations to sell software to China, which experts say could be used in the country's nuclear weapons programme.

The demos flights were performed in July and August in China and presented the aircraft's ability to inspect power lines and track moving objects.  It is not clear if CyberAero’s potential deal with China breaks the arms embargo. AVIC manufactures both civil and military planes and the potential usage of the unmanned helicopters is unknown.

"This is a milestone for us in the work we've put into the AVIC order, and yet another step in our growth and expansion," says Mikael Hult, CEO of CybAero.

The now-complete demo flights were performed at various times in July and August attwo different locations outside Beijing. AVIC, one of the largest companies in the world and whose operations nclude developing and producing aircraft, invited numerous high-ranking individuals from government authorities, as well as from the energy sector and business community.”

In early July, CybAero won a large framework agreement with AVIC, which has committed to purchase at least 20 helicopter systems in the first three years, followed by at least 50 systems in the next five years. This translates to an order value of SEK 700-800 million, depending on the final design of the systems. Work on the order has begun.

CybAero received an end user certificate from AVIC on September 5 and has initiated the application process for an export license from ISP (the Swedish Agency for Non-Proliferation and Export Controls).

AVIC plans to focus on the civilian and commercial markets, such as agriculture, coast guards, the energy sector, mining industry, forest products industry and fire & rescue services. News of the order made a huge splash both in Sweden and abroad, with national Chinese TV channel CCTV7 doing a 3-minute feature on CybAero's product APID 60 in late July.

Meanwhile, uncovered documents reveal that secret negotiations have been taking place for several years, despite the weapons embargo that was imposed on China after the 1989 Tiananmen Square massacre, the report added.

According to the programme, the state-run agency has been using the Royal Technical College KTH in Stockholm as a go-between to sell the software. A similar format, with FOI using someone else as a go-between in a sensitive deal, was uncovered in 2012 and then related to a planned weapons factory in another dictatorship, Saudi Arabia.