Australia is still considering whether to ban arms exports to Saudi Arabia, which has been accused of war crimes in Yemen and the brazen murder of journalist Jamal Khashoggi.
However, the federal government continues to approve weapons sales to the kingdom, bucking a growing international trend.
"We keep those matters under review," Foreign Affairs Minister Marise Payne told a Senate estimates hearing in Canberra on Wednesday.
"Australia reserves the right to exercise options in relation to these matters."
Defence officials confirmed they have granted export permits to an Australian company that sold 500 weapons mounting systems to Saudi Arabia.
The federal government also provided the company financial assistance.
"We are promoting an industry in Australia that has got some advanced systems," Defence official Tom Hamilton told the committee.
"Any exports would be subject to our export compliance regime."
Greens leader Richard Di Natale repeatedly asked if the weapons systems would be used in Yemen.
Mr Hamilton did not directly answer the question, but said Australia always assessed the risk of weapons being used to commit human rights abuses.
"If we assess that they would ... we would not approve the permit," he said.
Italy, Denmark and Finland have all announced plans to follow Germany's lead in banning arms sales to Saudi Arabia.
The US Congress has also called for an end to support for Saudi Arabia, while the UK House of Lords has deemed arms sales to the kingdom illegal.
