The Falkland Islands have been claimed and occupied by several nations throughout its history, who generally used their national flags on the islands. It wasn't until 1876 that the islands were given a flag of their own, which consisted of a Blue Ensign defaced with the seal of the islands - an image of HMS Hebe (which brought many of the early British settlers to the islands, including Richard Moody, in the 1840s) in Falkland Sound, overlooked by a bullock (representing wild cattle which once roamed the islands). A new coat-of-arms for the islands was introduced on 16 October 1925, consisting of the Desire (which was captained by John Davis who is reputed to have discovered the islands in 1592) and a sea lion in a shield surrounded by the motto of the islands, Desire the Right. This coat-of-arms later replaced the image of the bullock and ship on the flag.
In 1999 the size of the arms was increased and the white disc removed to create the current flag. The Falkland Islands Red Ensign was created by The Merchant Shipping (Falkland Islands Colours) Order 1998, No. 3147 of 1998, which came into force in 1999 and which contains a picture of the ensign containing the Falkland arms on a white disc. Red Ensign with the Falklands coat of arms superimposed is used as the islands' civil ensign. Previously the plain red ensign was used by ships in the territorial waters around the Falklands.
Since its approval, the Falklands flag has been used to represent the Falkland Islanders internationally. In 2011, in support of Argentina's claim to the islands, the members of Mercosur banned Falklands flagged vessels from entering their ports. Vessels flying the Falklands Civil Ensign are required to re-flag with the Red Ensign to enter Mercosur ports.