MercoPress. South Atlantic News Agency

Milei prepares bill to toughen sanctions on companies operating in the Falklands

The package will be a legislative test for Milei, whose libertarian coalition lacks majorities in Congress

Argentine President Javier Milei is preparing legislation this week to toughen sanctions against companies operating in the Falklands, a move analysts say could raise tensions with Britain beyond the oil sector.

The bill, titled the National Sovereignty Defense Law, would amend Law 26,659, which already bars unauthorized hydrocarbon activity on the disputed continental shelf and provides for disqualifications of between five and twenty years. Milei announced it on September 3 in a televised address, alongside a decree to speed up existing sanctions proceedings. The text will be introduced in the lower house.

The legislation builds on proceedings the Argentine government says it has opened against at least 60 companies and individuals linked to offshore oil exploration around the archipelago, which Argentina calls the Malvinas and claims as its own despite British control. Argentina invaded the Islands in 1982 and fought a ten-week war before surrendering to Britain. Islanders confirmed their status as a British Overseas Territory in the 2013 referendum.

Congressional aide Marcelo Seghini told Reuters the text provides for tougher penalties for unauthorized operations and would extend sanctions to affiliates and to other activities affecting Argentine natural resources. According to the same source, the government is considering including the fishing industry, which underpins much of the Islands' economy. The Argentine government has not confirmed that scope or responded to queries about the companies affected.

The move follows a criminal complaint filed last week against companies linked to the offshore Sea Lion project, operated by Israel's Navitas Petroleum alongside Britain's Rockhopper Exploration. Both maintain the project holds valid licenses from the Falklands government and do not expect Milei's actions to derail development.

A government document reviewed by Reuters lists shareholders and financial intermediaries among the firms marked for possible sanctions, including Vanguard, First Eagle, Canaccord, Interactive Investor and Hargreaves Lansdown. Oilfield services providers SLB, Baker Hughes and Halliburton have said in recent days they will not take part in activities on the Islands.

The announcement followed comments by U.S. President Donald Trump suggesting Washington could reconsider its neutral position on the dispute. For Marcelo Elizondo, Argentina's representative to the International Chamber of Commerce, this was not a bill prepared over time: Trump's remarks, he said, “created a climate that the government sought to exploit quickly.”

The package will be a legislative test for Milei, whose libertarian coalition lacks majorities in Congress. Opposition lawmaker Aldo Leiva said the president “is clearly using the Malvinas for political opportunism.”

Companies and investors are weighing whether the sanctions could ultimately reach firms with operations in Argentina, including the Vaca Muerta shale formation. Congress receives the 2027 budget proposal on Tuesday, with defense spending expected to rise.