Global Policy Forum

Creating A Country To Avoid Jurisdiction


By David Canton

The London Free Press
June 16, 2000

Sealand is a country - or at least claims to be one -- located a few kilometres off the coast of England.

Recent reports claim a new company called Havenco plans to introduce a " data haven" in Sealand. The purpose of this haven is to house Internet servers that operate beyond the jurisdiction of traditional governments. The intent is that the company's Web operations hosted on the servers will not be subject to various states' laws. The only thing Havenco will prevent is spam (unsolicited bulk e-mail), mounting attacks on other computer systems and child pornography. Whether or not this plan will actually work is another matter.

Notwithstanding any claims of the Sealand government, there is some doubt whether the country actually exists. This "country" consists of a small concrete platform anchored in six metres of water about 10 kilometres off the English coast. According to the official Web site of the principality of Sealand, the country was formed in September 1967. The platform was constructed during the Second World War for military purposes, but abandoned after the war. The creation of the country in 1967 occurred when an individual occupied the platform and declared it an independent country.

The Web site contains an explanation of why it is a country and pictures of Sealand diplomatic visas and passports, coins, licence plates, stamps and the platform itself. One has to wonder why a country the size of a sports field needs licence plates.

Its claim to be an independent country may be dubious -- at the very least humorous -- however, it does raise an interesting discussion regarding jurisdiction and the Internet. Creating a haven to avoid the jurisdiction of other states' laws that relate to the Internet is not as simple as locating your servers in a site outside of those countries.

Even if one assumes the country of Sealand is legitimate, there are other hurdles to overcome. The issue of whether a state has jurisdiction over someone or something can lead to different answers depending on whether one is dealing with criminal, civil or tax laws. For civil matters such as terms of purchase and sale from an Internet site, a Web site owner can declare jurisdiction within its posted terms and conditions. North American judicial pronouncements to date tend to recognize such choice of law clauses. The more interactive a Web site is with an individual in another state, the more likely that state will choose to assert its civil jurisdiction.

One issue related to civil jurisdiction is the geographical location of the parties. In the Sealand scenario, while the servers will be located in the country of Sealand, the owners of the business and the operators will be resident in another country. States generally view jurisdiction in criminal matters in a different light than civil. Criminal matters regarding Internet sites operated from Sealand would include such things as gambling, obscenity, defamation and money laundering.

States will desire to control such conduct if their citizens are affected. Last summer, a New York court effectively ruled that an online gambling operation run from a server in Antigua -- where the operation was licensed to operate -- had to block New York residents from using the service. Australia is currently considering passing laws to restrict the availability of online gambling to its citizens.

Jurisdiction for tax issues is determined by other tests. The effectiveness and applicability of offshore tax havens are often more mythical than real. Only time will tell how successful the Havenco attempt on Sealand will be. While such cases are interesting for lawyers, the last thing clients want to hear is that they have an interesting matter.

More Information on Experimental States


FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.