The Australian government has informed Israel's largest private arms company, Elbit Systems, that its military will stop using its Battle Management System (BMS) from mid-June.
"The news was given to the company with no explanation as to the reasoning behind the decision, with Defence confirming that they have no interim solution to replace the capability," the Australian Defence website reports.
However, according to a report by the Australian Broadcasting Corporation (ABC), tensions between Elbit and the Australian Department of Defence had been simmering due to the Israeli company imposing "huge premiums" on the BMS because it has a monopoly on the system.
"People are getting fed up with Elbit exploiting their monopoly to impose huge premiums," one unnamed Australian officer told the ABC.
"And there are definite concerns that the Israelis are backdooring the system for information," he added.
Elbit Systems is often the target of campaigns by human rights groups. The Israeli firm produces surveillance technology for the illegal Separation Wall in the occupied West Bank and is said to manufacture the engines for 85 per cent of the country's military drones, among other weapons components.
The Israeli arms manufacturer is said to have supplied 85 per cent of the drones used in the war on Gaza in 2014, when over 2,200 Palestinians – 500 of them children – were killed in only 50 days. The Israeli arms company has ten sites across Britain.
Greater awareness of Elbit's role in human rights violations and alleged war crimes has tarnished the company's image. In February, East Sussex Pension Fund was the latest to divest from Israeli firms months after human rights activists lobbied the fund to bring an end to its ties to companies which violate international law.