| How to set up your own country |
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| Investigations | |
| Written by Danny Penman | |
 If HavenCo did not exist, a science fiction novelist could not have invented it. Set up by armed computer geeks on a disused fortress in the North Sea, it aims to be the Internet equivalent of a Swiss banking centre, spiced up with peep shows and gambling dens.By a strange quirk of international law, HavenCo's fortress - known as Sealand - is an independent country, despite being only seven miles off the South East Coast of England. Because they are literally the law, the Sealand Royal Family can do pretty much whatever they like, including establishing a multi-million pound Internet venture that allows its clients to avoid the laws of every other country on the planet. "We're not just off-shore," says Prince Michael Bates of Sealand. "We're off-Government." In essence, HavenCo offers total security and anonymity to anyone with an Internet connection. If you are a financial institution that wants to operate an untraceable payments system, HavenCo will help. If you want to send pornography to a Muslim country, Sealand makes the ideal base. If you want to sell insider financial information but don't want to go to prison, HavenCo will provide the infrastructure. "Our aim is to slip through the cracks in the pavement," says Prince Michael. "We don't want to get involved in outright illegality such as child pornography or laundering drug money. "We do not monitor traffic but if, for example, someone brings it to our attention that Sealand is being used as a base for child pornography, then we'll pull the plug on them. It's as simple as that. We have certain morals ourselves. We're not anarchists. We're simply offering absolute privacy and security." Sealand began life in the Second World War as Roughs Tower, one of a number of concrete gunneries built to shoot down German bombers as they approached the east coast of England. Then, as now, it had all the looks and charm of an disused oil rig. Unlike the other platforms, Roughs was built outside British territorial waters, so after the war, when the others were demolished, Roughs was abandoned intact. On 2 September 1967, Roy Bates, a retired British army major, occupied the fortress and claimed it. He argued that it had been abandoned in international waters and was his to take. The following year, the Royal Navy expressed concern over Roy's presence and sent two gun boats to evict the squatters. Roy, Prince Michael's father, fired warning shots at them and was hauled before the courts, only to argue successfully that the newly named Sealand was beyond its jurisdiction. A legal basis for independence had been established. In 1978 a group of Dutch and German businessmen visited with a proposition. While they were there, they took the fortress by force, holding Prince Michael prisoner for three days. He was freed when Prince Roy launched a helicopter borne counterattack. The aircraft was piloted by a friend who flew in several James Bond Films. In true 007 style, the invaders were swiftly over-powered and taken as "prisoners of war". There was plenty of gunfire but no blood was spilt. When Germany asked Britain to intervene, it was told the fortress was beyond British jurisdiction - the second time, according to the Bateses, that Sealand received de facto recognition of its sovereignty. The prisoners were later released after the arrival of a German diplomat. After the "war", Sealand became a solution in search of a problem. The Bateses looked into all manner of ways of using the fortress to make some money. Pirate radio, tax havens and pleasure dens were all considered and discarded. For almost twenty years, the British authorities looked on with growing relief as Sealand sank, ever deeper, into disrepair. Occasionally Sealand has become the focus of attention, usually as a central character in the type of high-farce loved by Fleet Street journalists. During the Falklands War, for example, a group of Argentineans tried to buy Sealand and set up camp "right on Britain's doorstep". Forever the patriot, Roy, who fought in the Second World War in North Africa, refused. "I would never do anything that would pose a threat to the UK," he says. 
In 1997, an Andrew Cunanan/Sealand connection emerged. After Gianni Versace's killer committed suicide on a Miami houseboat, the police discovered that the man who owned the boat was in possession of a Sealand passport. Nothing more came of it, but as it turns out, lots of people have Sealand passports who should not - the things apparently reproduce without the Bateses' knowledge. In the spring of last year, Sealand made the news again: Spanish police arrested a Madrid-based gang allegedly tied to international drug trafficking and money laundering. The gang appeared to be using a fake Sealand Web site and thousands of phoney Sealand passports as part of its criminal activity. Questioned by Interpol, Roy wailed about the injustice of anyone using the Sealand name for criminal deeds. "Sealand has all been a game, an adventure, and it is very unfortunate to see it take this turn," he told one reporter. Until 1999, it seemed certain that Sealand would slowly crumble into the North Sea and relieve Britain of its problem neighbour. But that all changed in July, when Ryan Lackey and Sean Hastings emailed Prince Michael a business proposal. Ryan, a 21 year-old MIT drop-out, and Sean Hastings, a 32 year old Internet entrepreneur, wanted to turn Sealand into a "fat-pipe data haven". Things moved quickly and Silicon Valley investors - fat from the Internet bubble - pumped in hundreds of thousands of pounds in seed money. Chief amongst these were Avi Freedman, a Vice-President at Akamai, and Joichi Ito, Chair of Infoseek Japan. Work fixing up the old platform soon began in earnest. A de-salination plant and triple-redundant generators were installed. High speed satellite connections were established, microwave links to Britain were rigged up and miles of cabling installed. One of Prince Michael's first acts was to establish an army - of sorts - with machine guns and other light weapons. Next came the Navy, consisting of sinister-looking, black high speed dinghies. There is even a helicopter on standby to ferry in reinforcements. HavenCo then opened its doors for business, just as conventional Internet hotels began crashing and burning to earth. With an initial set-up fee of £2,300 and running charges of £1000 per month, the service was cheap, but not as cheap as its mainland rivals. Still, within three months, Prince Michael claims, it was breaking even by generating £200,000 a year of business. Now, it is making healthy profits, but its founders refuse to reveal how much. The secret of their success is to offer absolute security, privacy and immunity from prosecution. Several of it's clients offer online gambling from Sealand - a practice illegal in many countries. At least one client offers an untraceable payment system based on "electronic gold". This allows a person to buy gold online, transfer it to another person, who then claims the yellow metal in person from an intermediary. It's fast, secure and absolutely untraceable, a fact that will no doubt make the world's tax collectors take note of Sealand. Other companies are using HavenCo to store emails and sensitive documents. In the US, for example, employees or estranged business competitors routinely subpoena company hard disks and computers for evidence. This can cause immense disruption. If the company's data is stored off-shore, then the court officials are stymied. Another factor that makes HavenCo attractive to the security conscious - or paranoid - is its island location. It's well away from terrorist targets, difficult to invade and all but impossible to tap its encrypted data connections. Prince Michael says: "If a terrorist nukes London, New York or Paris, you don't want your valuable data backed-up in the same city. You want it here - in Sealand - stored safely in a fortress where no terrorist would think of looking. "Perverse as it sounds, the destruction of the World Trade Center has been good for our business. We've been inundated with calls." To provide further security, all computers are assembled by Ryan, on site, from components carefully screened for bugs and electronic backdoors. HavenCo is now planning a massive expansion plan. Millions of pounds worth of computers and networking equipment will be installed. Banks of air-conditioners and triple-redundant generators will be needed to cool and power the enterprise. They will install more satellite and microwave dishes to handle the increasing data flow. There is even talk of installing their own undersea fibre-optic cables to ensure that the data - and money - never stops flowing. The aim is to be totally independent - or at least not too reliant on any one of its over-bearing neighbours. "We'll still need Tesco's though," says Prince Michael. "We order our food over the Internet and they deliver to the quayside. It's perfect." Add this page to your favorite Social Bookmarking websites           |
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