Britain has formally protested to Argentina over a threat to punish oil firms operating off the Falkland Islands with heavy fines, the seizure of assets and jail sentences of up to 15 years.
The Foreign Office (FCO) insisted the Falklands were not subject to a new law passed last month by the Argentine Congress and accused Buenos Aires of "bullying tactics" in the long running dispute over the sovereignty of the islands.
The FCO director for the Americas, Kate Smith, has now lodged a formal protest with the Argentine charge d'affaires, Oscar Horacio Galli.
An FCO spokesman said: "Argentine domestic law does not apply to the Falkland Islands, so this is a baseless gesture intended to deter legitimate commercial activity. We are confident it will not succeed.
"It is shameful that Argentina is once again adopting bullying tactics in an attempt to strangle the Falkland Islands economy.
"The British Government fully supports the rights of the Falkland Islanders to develop their hydrocarbons sector for their economic benefit.
"This right is an integral part of their right of self-determination, which is expressly contained in the International Covenant on Civil and Political Rights.
"All hydrocarbons activities on the continental shelf of the Falkland Islands are regulated by legislation of the Falkland Islands Government, in strict accordance with the United Nations Convention of the Law of the Sea."
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