Geopolitics

Brexit And The Falklands: Isolated UK Is Opportunity For Argentina

Brexit could isolate Britain in its dispute with Argentina over the Falklands, though leaders in Buenos Aires need to think and speak clearly, or risk keep the status quo.

A man passes by a store in the Falklands
A man passes by a store in the Falklands
Juan Gabriel Tokatlian

-Analysis-

BUENOS AIRES — In 2014, I wrote about the Falkland Islands urging Argentina to adopt a strategy in its longstanding territorial dispute with Britain on four pillars: legality, diplomacy, currency and defense. I sensed then that Argentina had no long-term, comprehensive Falklands policy since the restoration of its democracy in 1983. Little has changed since except one big thing: Brexit.

In the past 35 years and depending on the government in power, we have alternately tried raising and lowering the cost for Britain of keeping the islands, emphasizing bilateral or multilateral aspects of the issue of sovereignty, relying on regional neighbors or the great powers to advance our claim, raising or lowering our tone and profile, or reconsidering or dismissing the value of the local residents of the island. Such vicissitudes have proven (and will continue to prove) fruitless for Argentina.

Now, Argentina must review its legal, diplomatic, economic and defensive position regarding the Falklands after Brexit. First, in legal terms, changes have come in international law in recent years around self-determination, territorial integrity and sovereignty show that we may be living through a singular moment in modern history right now. The United States, China, Russia and the "residual" European Union are bolstering the sovereignty concept for geopolitical, economic and juridical reasons, which Argentina could exploit on the subject of the Falklands.

Our own decline has prevented us from exploiting this opportunity.

Secondly, on the diplomatic front, leaving the European Union will weaken the UK's standing and affect its relations with the islands. The Falkland Islands had 198 million euros of exports to the EU in 2016, equivalent to 70% of its GDP. The EU committed itself through the European Development Fund, to provide the islands with six million euros in aid in the period 2014-20. If our country had a clear idea that it must negotiate with Britain but can still talk to the islanders, it could design a set of initiatives to favor their economy after Brexit.

But Argentina must also "surround" the UK by strengthening its links with Latin America, where London has been enjoying a rather successful offensive in the last two years, and by taking into account China's apparent interest in the South Atlantic.

Thirdly, there is the essential "currency" of economic resources. Britain is not as powerful today as it was, and Brexit will likely render it even weaker. Yet our own decline has prevented us from exploiting this opportunity. As historical cases show, international negotiating power increases as domestic conditions strengthen.

One disadvantage of simply waiting 16 months for the "shower of investments' promised by the government of President Mauricio Macri, is that the country stopped thinking about a development model that would bring it prosperity and boost the tangible attributes of power that are of use in foreign policy. The window of opportunity provided by a momentary weakening of British power is small and should not be wasted, especially when the Falklands' northern basin may have important oil reserves.

The fourth significant issue is defense. Evidently, whatever the circumstances, Britain will seek to boost its naval defenses around the Falklands. Its navy has just launched a new HMS Queen Elizabeth aircraft carrier, with the military lessons of the 1982 Argentine invasion of the islands in mind. In 2015, discerning a confrontational attitude in the government of the last president, Cristina Fernández de Kirchner, London strengthened the islands' defenses, to which it is to allocate 180 million pounds ($224 million) over 10 years. Recently and in spite of friendly gestures by the Macri government, the UK has approved spending 153 million pounds ($191 million) on a defense system for the Falklands. And what is our country's response?

Discussing the Falklands has become hard in Argentina. The Left fears it may fuel militarism. The conservatives want to put the armed forces to work fighting drug trafficking. Few people are interested in reviewing the links between foreign policy and defense, while the state's most recent purchases of military hardware have been cautious, and defensive.

But whatever course it takes, the government in Buenos Aires must urgently formulate a new, post-Brexit policy on the Falklands.



*This article was originally written in Italian by Worldcrunch iQ expert contributor Juan Gabriel Tokatlian, an associate professor of International Relations at the Universidad Di Tella It was translated by iQ language contributor Alidad Vassigh.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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