Thirty-seven years after April 2, 1982, which made possible the recovery of the Malvinas Islands, the issue of the archipelago is once again relevant on the political level.
Both Argentina and the members of MERCOSUR, UNASUR and ALBA have, in due course, prohibited the use of the illegal flag of the Malvinas, “a place that the United Kingdom claims as an overseas territory.” In this way, the rejection extends to the entire Mercosur, UNASUR and ALBA (Venezuela, Cuba, Bolivia, Ecuador, Nicaragua, Saint Vincent and the Grenadines, Dominica, Antigua and Barbuda).
Other parts of the world have also intervened in the matter; thus, the OAS has duly expressed its support for its position of denouncing Great Britain for the militarization of the Malvinas before the UN.
This reminder of the latest actions in the Malvinas area and the support achieved by different States and regions, reflects not only the presence of a clear ongoing conflict, but also an Argentine policy that was more aligned with a “regional commercial blockade” on the Islands than with a strong integration in terms of trade.
Certainly, perhaps a change can be considered in recent years with the attempt at new integration policies. Indeed, Argentina tried to agree on direct flights, but England stood firm on the 1999 agreement and flights continued to depart from Punta Arenas. Despite this, the Argentine Government, promoting greater air links between the Islands and the continent, continued with these attempts at agreements and recently, the Foreign Ministry announced an agreement with the United Kingdom for the company LATAM to operate an additional air service to the Malvinas Islands, departing from Brazil, with two monthly stops in Argentine mainland territory.
A proposal: open trade borders
Now, when faced with a search for integration through these flights, it is worth asking: What would happen if there were a major trade opening with the Falkland Islands?
Let us imagine the possibility of this commercialization and its effects analyzed in customs matters. Perhaps, from this approach and without substantial modifications in the regulations currently in force; it would enable a gradual integration, with the main protagonist for this purpose being the Customs itself.
The Falklands: customs definitions
From a customs perspective, the Falkland Islands do not currently belong to the “customs territory”, since they are part of the customs “free zone” established by Law 19.640 of 1972.
It should be remembered that “national territory” is not the same as “customs territory” and/or other “customs areas”.
In this regard, the Customs Code in its first article provides: "The provisions of this Code apply throughout the land, water and air "sphere" subject to the sovereignty of the Argentine Nation, as well as in the enclaves established in its favor."; On the other hand, Article 2 teaches that "customs territory" is the part of the "scope" in which the same tariff system and economic prohibitions apply to imports and exports, distinguishing between general and special customs territory.
This means that the first one – country – concerns the aspect of political law and the second – customs territory – inherent to customs legislation. Showing that the “customs territory” is one in which the same legal tariff framework and a system of economic prohibitions apply.
Customs legislation, meanwhile, states that within the "customs territory" there may be a "general" and a "special" customs territory, while in both cases a system of tariffs and prohibitions will be applied. Thus, in the "special" customs territory, the entry or exit of a merchandise has a lower tariff treatment than in the general customs territory, which makes it special; this is done in order to favor the geographic area over which it is granted.
Law 19.640 establishes that the current province called Tierra del Fuego, Antarctica and the South Atlantic Islands divides this provincial area into two well-defined customs spatial areas. For its part, the “large island of Tierra del Fuego” receives the treatment of a “special customs territory” (cfr. Art. 10 – AAE); while the rest of the territory of the province, that is, the Isla de los Estados; Antarctica; the Malvinas Islands; the South Atlantic Islands, make up the so-called “Free Trade Area” – AAF (cfr. Art. 5 law 19640).
In this sense, the Malvinas Islands do not belong to the general customs territory, nor to the special one. and receive “free zone” treatment in customs matters.
Consequently, the entry of goods into the “free zone” from abroad and/or from the general and/or special customs territory is exempt from customs duties; while extractions from such area (AAF) – also receive the same exemption. (cfr. art. 6 and 7 Law 19.640)
It is clear that, given the current situation in Argentina regarding the Malvinas Islands, Customs cannot assume effective control within that area. However, based on what is prescribed by Law 22.415, Customs is not necessarily excluded from the possibility of exercising control over shipments of goods; at least, from the general and/or special customs territory with the archipelago as its final destination.
Obviously, such an exercise of control of extractions with final destination the Malvinas Islands, does not imply abandoning the discussion on sovereignty., even less, consent to an act in favor of another nation. Because the Customs Code has well legislated that "export" results in the extraction of merchandise from the customs territory (art. 9 law 22.415) and not of the national territory; ergo, in customs terms, there may be imports and/or exports within the same national territory, without this implying consent to a sovereign act by another nation over territories such as the Malvinas Islands.
Customs and control in possible operations to Malvinas:
In this regard, Customs is empowered to exercise control over all goods entering the territory of the Malvinas Islands, from its control power that it exercises in the general and/or special customs territory. Consequently, Customs can keep records of all those operations that enter the islands of the archipelago, by controlling the exit in each customs territory.
Although it will not be possible to carry out a control on entry directly into the Malvinas Islands due to the obvious aspects of the current situation, the law establishes that such control of inspection is not, at least for now, of great importance within the framework of the tax exemptions, which Law 19.640 advocates in favour of the customs free zone.
Agreements for the registration of operations from abroad to the Malvinas:
As regards the remaining import operations carried out in the Malvinas Islands, that is, those coming from abroad, Customs could carry out control through the mechanism of statistical records and here, the policy of trade openness would be useful and not the blockade that has been in place since the end of the war.
This could certainly be achieved, if the regions and States that have echoed Argentina's sovereign claims regarding the Malvinas Islands are not merely acts of solidarity, as Nigel Haywood pointed out at the time when he was governor of the Islands: “If other countries in the subcontinent say they support Argentina, it is simply out of regional solidarity” (cfr. Interview with La Nación newspaper, 6/4/2012). Consequently, there could be agreements between Argentina and the group of these countries that have expressed solidarity with the sovereign claim and in such a scheme, each export operation to the archipelago that may arise from these nations must be communicated by the exporting State to the Argentine Customs. In this way, the Customs would keep a record of each operation that is destined for the “free zone” – Malvinas Islands – and whose origin and/or provenance is from abroad.
AcI agree on the form of customs declaration:
In addition, it would be even more appropriate to agree that export operations registered in each State belonging to MERCOSUR and/or other regions that adhere to Argentina's sovereign position, must document the destination in detail as "Malvinas Islands (Argentina)". Given that the prescription of the requirements to declare an export operation cannot be questioned, as it is within the legislative power of the exporting State.
Control over exports from the Falkland Islandsas:
Although Customs could not, in the current situation, exercise direct control over export destinations from the Malvinas Islands, it should add the application of the prerogatives that the law grants (law 19.640), regarding the application of export incentives on all extraction operations that are of origin from the “free zone” – Malvinas Islands –
Please note that Article 8 of Law 19.640 makes this possible: “…The National Executive Power may establish, or authorize the establishment, of a similar export refund or reimbursement regime for products originating in the free zone, provided that the productive activities carried out therein justify it, within the general limitations of the refund regimes, plus the additional one arising from the difference in internal taxation by virtue of the preceding provisions, and on condition that said exports are made abroad. Said regime may be applied only to one or some of the zones included in the free zone. In the case of delegating the powers of this article, the Executive Power shall designate the implementing body or bodies for such purpose.” To this must be added what is established in art. 9 of law 19.640 – "The provisions of this law do not prevent the additional application of broader benefits or franchises granted or to be granted by law in a special manner for one or more specifically determined zones of the free zone, nor the application of benefits or franchises granted or to be granted for importation into the rest of the national territory."
Ultimately, this could support a special attraction, focused on the policy of export incentives and/or benefits for all companies and/or citizens based in the Islands that carry out operations abroad, making it possible, through this mechanism granted by the norm, for Customs to have a real exercise of control, at least statistically, regarding the departure of merchandise from such territory – Falkland Islands – abroad. To a large extent, it can be possible to invite and, why not?, to get companies and/or citizens of such customs area to agree to accreditation, reporting the extractions to the customs of the region – Tierra del Fuego – in search of obtaining that economic benefit.
At least it will be classified and only the fundamental requirement must be met, that the company and/or citizen of the archipelago, present themselves before the customs service to request their right to payment, without prejudice to the document used to prove the extraction of such goods.
Perhaps the customs framework sounds illusory in relation to the situation in which the Falkland Islands find themselves.It is currently a matter of sovereign power; but the law in force at the date, enables its mechanization and if a policy of promoting openness to trade is advocated, in agreement with the Nations that today support the sovereign right of Argentina, it could be in line with this customs regime described and that the law clearly imposes, perhaps progressively achieve the much desired interest of integrating into our nation, the not forgotten part of the territory of the Province of Tierra del Fuego, Antarctica and the South Atlantic Islands. Serving the Customs, as the great reconquistador.
By: Dr. Guillermo Felipe Coronel, Member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
