MercoPress. South Atlantic News Agency

For Argentina’s tax-revenue office Afip, Malvinas are a foreign territory, most probably British

Tourists landing in the Falklands: only dollars, sterling or Euros, please

Despite persistent claims before the world, and his Holiness, that the Malvinas Islands are Argentine, for the tax office in Buenos Aires in practical terms they really are a foreign country, according to the latest resolution which applies an additional fee of 20% to tickets and overseas expenditure with Argentine debit or credit cards.

In effect any Argentine wishing to fly to the Islands and spend for lodging, food, travel and shopping is forced to pay with a debit or credit card which is then levied with an additional 20%, based on the latest resolution from the revenue office, AFIP.

According to a report from Clarin, the Saturday Lan round flight ticket to MPA from Buenos Aires, with stops in Santiago de Chile and Punta Arenas costs 9.431 Pesos but with the additional 20% from Afip the price increases to 11.137 Pesos.

Argentina since almost two years ago has implemented the so called ‘dollar-clamp’ with the purpose of preventing the outflow of capital and keeping dollars so the Treasury and the central bank can comply with sovereign debt payments and imports. Argentina’s unorthodox economic policies and pending litigations with bondholders have her forcibly absent from voluntary money markets.

The clamp has gone so far as first encouraging, and lately banning savings in US dollars which has had a merciless impact on the real estate and construction industries that use the greenback as the means of payment given Argentina’s long history of inflation when not hyperinflation.

This has created at least two parallel markets: the official one and a black one, with a gap ranging from 50% to 65%, based on economic and political events. There can be other methods to circumvent the clamp such as purchasing shares in Buenos Aires and selling them in New York, but they are more sophisticated.

Under current procedure Argentines travelling overseas and tourists must apply to the Central bank, (previous approval form the tax office), for dollars at the official exchange rate, and if not must appeal to the other more expensive and dangerous options. However ‘plastic’ money then becomes most helpful.

And with its avidity to help the Treasury collect money and discourage people from spending (‘squandering’) dollars overseas, Afip has imposed the 20% levy on all ticket purchases and overseas expenditures with ‘plastic’ money.

Thus since the legal currency in the Falklands is sterling, (English and local), and because Afip does not have the Falklands in its list of destinations, access to sterling at the official rate is virtually ‘clamped’.

This means any Argentine wishing to visit the Falklands must pay an additional 20% on his/her card expenditures, because despite the decades long claim that the “Malvinas son argentines”, that is not the case for the Afip tax revenue office.

And there is another catch to the procedure, since the request for the foreign currency at the official rate must correspond to the country to visit (dollars/US; Euros/EU; Yens/Japan), if when filling the forms the order is for sterling, and since Falklands as such does not figure in the list of possible destinations, the application should then indicate United Kingdom, although the ticket says something completely different.

In other words if you finally make it through the strict bureaucratic controls, and have access to sterling at the official rate with the purpose of flying and spending them in the Falklands, for Afip the Falklands are definitively a British Overseas Territory.