This page considers questions about the legal status of
'stealth states', some practical considerations and scams.
It covers -
The preceding page of this note commented on the triviality
of virtual states. Anyone can assert that a republic,
principality, empire, duchy, kingdom or khanate has been
established, can identify his or herself with a suitably
gorgeous title, issue proclamations and - money permitting
- pose in front of cameras while wearing the usual gaudy
robes and tinfoil crowns, stars or other decorations.
The essential issue is whether people and countries accept
such assertions. 'Virtual' states are virtual because
in practice the assertions are not accepted - not accepted
in international law, not recognised in national law,
not providing exemption from tax or other requirements,
not respected through inclusion in postal and other global
Self-proclaimed potentates can take on the trappings of
nationhood by issuing passports
and residence or citizenship papers, selling honours,
conferring academic 'degrees'
and awarding professional qualifications. That documentation
has value as decoration but is not recognised as legitimate
by governments and will not, for example, provide a basis
for the bearer to gain entry to Australia and other nations
with a serious border protection regime.
The promoters of virtual states can produce their own
currency, ostensibly backed by gold or otherwise, and
issue postage stamps. The stamps, banknotes and coinage
of pseudo-nations has a collectible
value but is not a recognised medium for international
commerce. Do not, for example, expect Australia Post to
carry a letter or parcel that relies on a stamp
from Atlantis; similarly do not expect your local bank
or credit card company to accept a payment using currency
issued by a 'state' whose purported territory comprises
asteroids or an apartment in Sydney.
Dukes, princes, presidents and other rulers of fictive
states can claim to be immune from the law of "other
nations" but that immunity is not recognised. Registering
a company or hosting a server in the supposed territory
of a virtual state will thus not prevent enforcement of
a court order gained by ASIC or the SEC. Pretensions regarding
independence are demonstrably false when the potentate
is imprisoned for tax
fraud or consumer scams
and when bailiffs simply seize the entire 'state'.
It is clear that some rulers, when not mugging for the
cameras or selling collectibles, do not believe their
own claims. They use passports issued by real nations
rather than their own 'states' (although happily selling
their documents to the ignorant), observe the law of real
nations and comply with the taxation requirements of those
what is a state?
Definitions of states and rationales for their recognition
(and recognition of bodies such as the Knights of Malta
that claim a sovereign status) have varied over time.
Recognition reflects custom, perceived legitimacy and
The salient definition of a state in contemporary international
law is provided by the 1933 Montevideo Convention on the
Rights & Duties of States (here).
Criteria for statehood are that the state should possess
permanent population; and
b) defined territory; and
c) government; and
d) capacity to enter into relations with the other states.
criteria embody what is sometimes characterised as the
declaratory theory of statehood, superseding earlier constitutive
theory that identified a state's existence exclusively
through recognition by other nations (whether through
"diplomatic recognition" or merely "recognition
As with much international law, disagreements have arisen
over interpretation of the Montevideo criteria.
It is clear that a large population is
not a prerequisite for international recognition. Figures
in the Digital Divides
profile elsewhere on this site for example note that small
states in Europe and the Pacific include -
Marino - 29,000 people
Tokelau - 1,400)
Andorra - 71,000
Nauru - 32,800
Iceland - 300,000
Tuvalu - 11,000
Liechtenstein - 33,900
Niue - 2,156
Qatar - 840,000
criterion does not require that all, or even most, nationals
were born in the nation's territory. However there is
an expectation that most will reside in the territory
(or be capable of residing in the territory, eg if not
excluded by an army of occupation). They will not use
the state as a form of hotel. That is a problem for virtual
states where most citizens show no intention of residing
in the purported jurisdiction or showing much commitment
beyond a mouse click.
A large territory and economy similarly
is not necessary for recognition. Some of the Pacific
micronations for example comprise a single small island
or a collection of islands scattered over a wide area.
Some of those islands are uninhabited. Some European states
also are geographically small. The territory can encompass
coastal waters, offshore islands, seabeds and oil rigs
or other structures. It must however be definable on a
geographical and exclusive basis, a test typically failed
by virtual states.
Assertions by pseudo-states that they control all territory,
are based on an asteroid or ship, comprise the potentate's
residence within a nation's jurisdiction or are based
on a server are thus not credible in terms of international
The government criterion reflects the
Westphalian tradition that states embody sufficient governance
mechanisms to allow negotiation between states. Such mechanisms
must be institutional rather than purely personal (with
for example continuity beyond the life of an individual,
so that the state is not regarded as automatically ceasing
to exist when the ruler - and population of one - expires).
The criterion does not require that the state is democratic
or that it respects human
rights. It does not specify an elaborate administrative
hierarchy, extensive provision of welfare services, large-scale
defence forces or sophisticated court system. Some states
in Africa do not have extensive administrative machinery
and provide few services. Countries elsewhere may have
only token armed forces or indeed no armed forces, instead
relying on agreements with neighbours or allies and on
The capacity to enter into relations
with other states (individually and through dealings with
international bodies such as the ITU
and UPU) is significant.
Not all nations have diplomatic recognition by other nations:
some Islamic autocracies for example do not formally acknowledge
the existence of Israel and do not recognise passports
issued by that state. 'Capacity' encompasses some sense
of whether a nation can function: is its overall legal
regime recognised by its cititzens, can the government
give effect to decisions (eg levy taxes, prosecute and
imprison offenders) and determine who are members of the
Influential jurist Hersch Lauterpacht commented that
practice shows that persons and bodies other than states
are often made subjects of international rights and
duties, that such developments are not inconsistent
with the structure of international law and that in
each particular case the question whether a person or
a body is a subject of international law must be answered
in a pragmatic manner by reference to actual experience
and to the reason of the law as distinguished from the
preconceived notion as to who can be the subjects of
has sometimes been cited as supporting the pretensions
of virtual states but his emphasis on actual experience
is important, as those states have not been shown to meet
the criteria and have not gained support from real nations.
The Administrative Court of Cologne famously dismissed
claims that Sealand, the small gunnery platform located
in UK territorial waters, could confer citizenship on
a German national. In 1978 the court held that Sealand
was not a state for the purposes of international law
because it lacked territory, people and government.
man-made artificial platform, such as the so-called
Duchy of Sealand, cannot be called either 'a part of
the earth's surface' or 'land territory' and only structures
which make use of a specific piece of the earth's surface
can be recognised as State territory within the meaning
of international law. ...
The State, as an amalgamation of many individuals …
has the duty to promote community life. This duty does
not merely consist of the promotion of a loose association
aimed at the furtherance of common hobbies and interests.
Rather it must be aimed at the maintenance of an essentially
permanent form of communal life in the sense of sharing
a common destiny …
The so-called 'nationals' of the 'Duchy of Sealand'
do not satisfy these criteria for community life. Apart
from the 30 to 40 persons permanently living on the
platform, who are responsible for its defence and the
maintenance of its installations, the presence of the
other so-called ‘nationals’ is limited to
occasional visits. The territorial extent of the 'Duchy'
of merely 1300 square metres does not satisfy the requirements
for the permanent residence of all its 'nationals'.
The life of the State is not limited to the provision
of casinos and places of entertainment. Rather a State
community must play a more decisive role in serving
the other vital human needs of people from their birth
to their death. These needs include education and professional
training, assistance in all the eventualities of life
and the provision of subsistence allowances where necessary.
The so-called 'Duchy of Sealand' fails to satisfy any
of these requirements. Regardless of the material prerequisites
which an entity must have in order to constitute a 'people'
under international law, the 'nationals' of the 'Duchy'
themselves fail to satisfy an essential condition for
their classification as a people. These 'nationals'
have not acquired their 'nationality' in order to live
with one another and handle all aspects of their lives
on a collective basis, but on the contrary they continue
to pursue their individual interests outside the 'Duchy'.
The common purpose of their association is limited to
a small part of their lives, namely their commercial
and tax affairs. This degree of common interest cannot
be regarded as sufficient for the recognition of a 'people'
within the meaning of international law.
observers have noted that actual occupation of Sealand
has generally involved less than five people and that
the supposed royal family, apart from usual residence
on the UK mainland and compliance with UK tax law, appears
to use UK passports rather than Sealand passports. Ship-based
and platform-based 'states' off the coast of Scandinavia,
Italy and the Netherlands evaporated when the armed forces
or police of those nations boarded and seized the pseudo-nations.
Samuel Menefee, in discussing the pretensions of virtual
states such as Minerva and Abalonia, commented that
republics" have the further disadvantage of being
delicate political ecosystems, open to disruption through
the most minor external pressures (a Corps of Engineers
permit) or internal rivalries. Their communities can
be levelled by a single hurricane, moved by a parted
mooring line, sunk without trace in a typhoon. Dependent
for their revenues on offshore banking, commemorative
coins, postage stamps, flags of convenience, or gambling,
they are continually open to exploitation, and their
very vulnerability makes them a danger to others. In
time some might acquire the paraphernalia of statehood
- territory, citizens, a government, recognition - but
time is what they do not have; they are continually
open to the challenges of all and sundry. If in the
future such states are to rise with their flags from
the deep, it seems likely they will be either secessionist
slivers of larger entities, or else catspaws, sponsored
by nations with ulterior motives. Until that day, may
they lie in peace, with the drowned hopes of their founders
- gone but not forgotten.
It is easy to issue edicts and enact laws but apart from
gratification of the founder's ego there seems little
point if that law cannot be put into effect.
Assertions by Australian residents, for example that they
are independent nations are at best quaint if
state is not internationally recognised and is seized
by a bank for nonpayment of a loan
self-described ruler is imprisoned for breaching Australian
state can be shut down by placing a padlock on its front
'citizens' are too young to get an Australian driver's
the supposed nation's currency and stamps are recognised
by no financial institution or post office.
'states' have sought to have the best of both worlds.
The Federation of Koronis,
for example, which claims to encompass a chain of asteroids
and local terra firma, squares the circle by indicating
we are operating on Australian soil for most of our
business any spacific [sic] Federation law is only applicable
to matters between Citizens of The Federation conducted
on federation territory. The Monarch and Government
has also decreed that all offences carried out on federation
territory will in addition be subject to Australian
law as well
2007 the US IRS for example requires full disclosure from
people claiming residency in the Virgin Islands: they
must state where their homes are, where their children
go to school and even where they attend religious services.
stunts and scams
Virtual states are a focus for stunts and scams.
Greenpeace activists for example landed on the uninhabited
chunk of rock known as Rockall (offshore from Iceland
and Scotland) in 1997 and declared it to be the "sovereign
territory of Waveland".
The gesture gained he requisite media attention, ignoring
inconveniences such as formal assertion of ownership by
a British naval party in 1955 and the Rockall Act
Virtual states have often been justified as akin to onanism,
giving pleasure to the individual promoter but not harming
anyone else (and of course benefiting the web hosting
and heraldic costume manufacturing industries). Some of
the projects in the following page indicate that virtual
states can be more than whimsy or pleas for love by overgrown
spotty teens. Reality sometimes collides with fantasy.
The dadaist state of Ladonia in Sweden for example reports
has a parliament, several political parties, a newspaper,
and many other activities. Recently Ladonia was forced
into a difficult situation when it received applications
for asylum from around 3,000 Pakistani citizens.
pseudo-states have been happy to sell 'citizenships',
'visas', 'passports' and
'diplomatic credentials' that although decorative do not
allow the bearer to travel freely and do not provide international
That has not deterred some scammers, who have unloaded
'unofficial' versions of that documentation onto gullible
buyers. The Sealand passport has thus been described as
self-generating, with clones appearing outside the control
of the supposed Sealand government.
Others have sought investment for the construction of
the new utopias or have purported to issue "Business
Registration Certificates" that will supposedly allow
individuals and corporations to move outside the reach
of tax agencies.
Romantics might care to consider money laundering regimes,
discussed elsewhere on
this site, and restrictions such as section 6-5(2) of
Australia's Income Tax Assessment Act 1936, which
provides that if you an Australian resident your assessable
income includes ordinary income derived directly or indirectly
from all sources, whether in or out of Australia. Claiming
to be a citizen of Abalonia will thus not make the ATO
One of the curiosities of virtual states is that their
claims are often taken at face value. Much reporting has
a distinctly giddy flavour, presumably consistent with
both the intended audience and with the values of the
Garfinkel's Wired article for example enthuses
about Sealand as
fat-pipe Internet server farm and global networking
hub that combines the spicier elements of a Caribbean
tax shelter, Cryptonomicon, and 007. ... HavenCo's
onboard staff will come and go on helicopters and speedboats.
Four security people will be on hand at all times to
maintain order; six computer geeks will run the network
operations center. The security personnel, heavily armed
and ready to blast anybody who shouldn't be around,
will make sure that unauthorized boats and aircraft
keep their distance. The geeks will perform maintenance
tasks like replacing failed hard disks and installing
new equipment. These routine chores will be a little
more challenging than usual, given the maritime setting
and Sealand's obsession with privacy. Fall over the
edge of Sealand's deck, for instance, and you'll probably
drown. Simply entering one of the machine rooms will
require putting on scuba gear, because the rooms will
be filled with an unbreathable pure nitrogen atmosphere
instead of the normal oxygen mix - a measure designed
to keep out sneaks, inhibit rust, and reduce the risk
assume 007 will remember not to breathe in when disabling
the machine rooms.
Reception by national and provincial bureaucracies has
been problematical. It is common for proponents of pseudo-states
to imply that interaction with government agencies (eg
letters sent to/by the monarch or president) signals international
Proponents often also imply that failure of governments
to take control through military or police action is a
demonstration that the particular virtual state is legitimate,
has been recognised by a government and is free to operate
independently in future. Such claims are tendentious.
If proponents of Sealand and its pers consider that residence,
non-provision of services and non-recognition by real
nations do not matter, can we consider locations in Online
Worlds - massively multiplayer onliine roleplaying
games (MMPORGs) such as Everquest - as states?
Participants in those online spaces clearly interact with
other 'citizens', have some form of law and governance,
show an emotional commitment that is deeper than that
of most pseudo-states, and engage in economic activity
that is increasingly extensive.
The immediate response is that MMPORGs have the character
of clubs or associations rather than states and that there
is little value in confusing or blurring concepts.
From the perspective of international law a sodality,
professional association or sports club is not a state.
Such entities may embody an emotional investment by members,
have rules and formal governance structures, provide some
services to members, collect money from members or third
parties, and even distribute money to non-members. Entities
such as the International Committee of the Red Cross (ICRC)
may enjoy some privileges under international law but
are not countries.
(Australian virtual states)