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Micronation, Offshore: Panama Papers Wash Up In Sealand

Man being hoisted onto Sealand
Man being hoisted onto Sealand
Katrin Langhans

You won't find it on any map of the world nor see it mentioned in any geography book. And yet it certainly exists. In the middle of the North Sea, surrounded by nothing but waves and wind, is the smallest self-proclaimed state in the world.

The Principality of Sealand, as its inhabitants call it, is a small artificial island made of steel and anchored by two concrete pillars. To the east is a seemingly endless horizon. To the west is mainland Britain, some 13 kilometers away. When the weather is right, the Roughs Tower platform rests about 20 meters above the surging sea. The surface area, however, is smaller than a football pitch.

Sealanders have their own passports and currency — even their own constitution. But they can't travel with those passports or use the currency to buy anything outside of Sealand. And no other state in the world recognizes the constitution.

To some, the principality offers an alternative way of life, one with a dash of Robinson Crusoe. To others it is just a place where a handful of people, trying to exempt themselves from obligations imposed by the state, have taken advantage to create a tax haven and host computer servers.

Sealand, if you will, exists only to Sealanders — to people like Alexander Gottfried Achenbach, a former diamond dealer from Aachen who moved to the micronation in 1975, helped write the constitution, and quickly rose to the position of prime minister. Three years later, he was involved in an attempted putsch against the leader of Sealand, Prince Roy. The micronation's self-appointed judges convicted Achenbach and ordered him to serve a prison sentence. Later on, after having been ousted from the platform, he founded an exile government to reconquer the principality.

Achenbach fought to regain Sealand for years. He even became the managing director, in the late 1990s, of a front company — Sealand Trade Development Authority Limited — that bore the name of the self-proclaimed principality. The former "prime minister" hoped to open up a branch of the firm on Sealand. The British government, in the meantime, was highly skeptical of the whole scenario. At one point it even sent Royal Navy ships to the sea fort, which were welcomed with warning shots.

Information in the recently unveiled Panama Papers suggests that Britain had good reason to be concerned. The company, it turns out, received a helping hand from Mossack Fonseca, the Panama City law firm at the center of the scandal. Mossack Fonseca set up the Sealand Trade Development Authority Limited on orders from a man whose diplomatic passport, numbered C 000002, was issued in the Principality of Sealand. A man who sent letters with stamps from the micronation, and who listed his official address as "Principality of Sealand, West 4."

The rusty platform on which the self-proclaimed principality is to be found is a relic of World War II. The British admiralty used the "Roughs Tower" as an anti-aircraft defensive gun platform to prepare itself against German air raids. Back then, 200 soldiers lived in rooms within the concrete pillars, some of these eight meters below sea level. After the war, the platform was deserted for two decades.

But in 1967, a former British major named Paddy Roy Bates had the idea to "conquer" the deserted base to establish a pirate radio station. He squatted on the platform, raised a red, white and blue flag, declared it to be the Principality of Sealand, and appointed himself prince. Paddy Roy Bates, a.k.a. Prince Roy, then moved there with his family — his son Michael and his wife Joan — on a permanent basis. He even used petrol bombs at one point to fight off an Irish radio pirate who wanted the platform for himself.

The British government was less than thrilled by the former major's little adventure and decided to send Royal Navy ships to Sealand. The son of the self-proclaimed prince, Michael Bates, welcomed their arrival with warning shots. The Royal Navy retreated. The case eventually made its way to a court in Essex, but the court decided that the matter was beyond its jurisdiction, given that Sealand is more than three miles off the coast and therefore outside of British territorial waters. Since then, the British government has not launched any serious attempt at recovering the platform.

According to a Spiegel report from 1978, the Principality of Sealand wanted to be and do many things: It hoped to attract offshore companies, become the virtual home for ships that serve under a flag of convenience, and establish itself as a "tax, gambler and speculator's haven and metropolis and a home for holding companies." Most of these big dreams fell by the wayside.

Alexander Gottfried Achenbach, a scientist and businessman, was responsible for securing recognition for the principality. In the mid-1970s, he filed to renounce his German citizenship, demanding he instead be recognized as a citizen of Sealand. But local authorities in Aachen, Germany, where he made the petition, refused his request.

Back then, the principality boasted approximately 100 supporters, of which only 30 were to be found on the platform at any given time. Their subsistence consisted of tinned food that was brought in by helicopter, fish that they caught themselves, and rainwater that had been collected in barrels. Many of them were German, which is why some people called it "Little Germany." Achenbach had big plans for expanding Sealand. "The main thing is to take advantage of the privileges that come with being a state," he told a reporter from Südwestfunk, a German radio station. The Sealand constitution, which Achenbach co-authored, offers some insight into what he meant: The document exempts people from having to pay inheritance and capital gains taxes.

Achenbach sent the constitution to 150 states around the world, as well as to the UN, with the request that it be ratified. But Sealand was missing three fundamental points under international law: namely, national territory, state authority and people. A court in Cologne ruled in the 1970s that the platform is not part of the Earth's surface and that it is missing community life. In addition to this, the platform's miniature space does not constitute an ideal living space in the long term.

Sealand had a different opinion on the matter. A German architect made plans in the late 70s to expand the artificial principality by creating a neighboring construction on which a casino, a square lined with trees, a duty free shop, a bank, a post office, a hotel, a restaurant and apartments would be built. And light weapons should be installed to fend off enemies, should that prove to be necessary. Better safe than sorry.

But a dispute broke out in 1978 when Prince Roy and his wife spent a few days in Salzburg in August of that year to take care of a few business matters. Achenbach and a handful of Dutch collaborators used their absence to attempt a coup. They took Roy's son hostage and claimed that Prince Roy had planned to sell Sealand in Salzburg. Not to be outdone, Roy gathered a few trusted supporters and hired armed men to return to Sealand via helicopter — allegedly piloted by a former James Bond stuntman.

The deposed ruler reconquered Sealand. While the Dutch people were allowed to leave in accordance with the Geneva conventions, Achenbach was detained in a room in the north tower for four months as a "prisoner of war." The British were quite unconcerned by the events and declared that they were not responsible. Germany, on the other hand, sent a civil servant from its London embassy to aid Achenbach seeing as he still was, under German law, a German citizen. For Prince Roy, it also meant that the principality was officially recognized.

After Achenbach was released, he formed a government in exile in Belgium and, from what is known, did not give up on the idea that he was still a part of Sealand until his death a year ago.

How Achenbach earned money during his time in exile is unclear. What is known is that at some point he met Helmut Gaensel, a Czech citizen and part-time treasure hunter who reportedly once testified in court that he was a CIA agent. Achenbach and Gaensel became the managing directors of Sealand Trade Development Authority Ltd., a front company headquartered in the Bahamas. That is what the Panama Papers tell us. And it was with this company that they apparently wanted to open up another branch in Sealand.

Was this a crazy idea? Possibly. Which might be why in the meantime, they decided to open a bank account in Slovenia, one that held up to 12 million deutschmarks, or roughly six million euros. But the bank was somewhat suspicious of this account, and, fearing that money laundering was taking place, reported it to the authorities that same year. This story was featured in the Slovenian press.

In March 1997, the authorities confiscated the money, to be on the safe side. But for eight years, Achenbach fought to get it back, and in 2005, the Supreme Court sided with him because no money laundering could be proven to have taken place.

According to the Panama Papers, Helmut Gaensel travelled to the Bahamas a month before the Supreme Court ruling and visited the local office of Mossack Fonseca (Mossfon), where he asked for a copy of the company's documents, saying the originals had been destroyed in a flood. But his attempt was unsuccessful, since the company was administered in Mossfon's Czech office. Gaensel asked how much it would cost to generate three new shell companies registered in Panama, the Bahamas and the British Virgin Islands, respectively.

Why did he do this? Did Achenbach and Gaensel want to get ready in case the Slovenian state decided to return their money?

Gaensel responded to Süddeutsche Zeitung's request, saying that he currently has the money, minus the costs associated with hiring two investors and legal costs, totaling 700,000 euros. He even sent an attachment with his email showing that from June 23, 1998, onwards, Achenbach transferred his claim to the Slovenian account to Gaensel.

Nothing further was heard from Achenbach for several years after the Supreme Court ruling, until he hatched a plan in 2010 to sue the Slovenian state, on the grounds that not being able to access his money for eight years caused him considerable harm. He demanded 1.2 million in compensation plus interest — but he lost. According to a representative of the Sealand exile government, Achenbach spent the rest of his life in Belgium, and died at age 80, about a year ago.

Self-declared Prince Paddy Roy Bates died in 2012, aged 91. He spent the end of his life on the British mainland. These days, his son Michael is in charge of the government.

In Sealand, people still keep up the pretence of a principality. In an interview a few years ago with Die Welt, Michael, the current Prince, spoke of the unusual experiences that define life on the island.

"Most of the bedrooms in Sealand are below sea level, within the sea fort's two pillars. At night you hear the pounding sounds of passing ships, sounds just like in the film Das Boot. I feel particularly safe on Sealand when the storms rage. That's when I know that no one can reach us and attack us," he said.

A Spanish real estate agent attempted to sell the rusty, two-pillared steel platform for 750 million euros after a fire six years ago. But no buyer for the rather curious property could be found.

Still, the people of Sealand sell a variety of odd souvenirs to generate income. You can, for example, buy a princely title for around 30 British pounds (a little under 40 euros), and an email address with the fictitious principality's domain for around 6 pounds (8 euros) on its website.

The exile government, too, is staying busy, for instance by founding a Sealand business club with international economists as members. The club's website notes that the membership fee is used to "defend the principality's independence from international financial markets." The stated goal is "to build a worldwide network of credit and debit cards."

Over the phone, a spokesman for the exile government also says that the club wants to drive so-called Vril technology forward.

What on Earth is that?

A spokesman explains that they have developed a highly efficient energy generator, based on German UFO technology. He notes, "These days, everyone knows that UFOs exist."

Right. And who uses this generator?

Many people do, according to the spokesman.

"How many?" we ask.

No answer.

Every once in a while, visitors make their way to Sealand, including members of the German pop band Fettes Brot (Fat Bread), who produced the video for their song "Echo" on the platform. Footage from the video shoot is available on YouTube, where you can see the band members arrive at Sealand by boat, make great fun of this strange nation and then be hoisted onto the platform.

At present, however, reports indicate that there is not much going on in Sealand. Some days, only a lonely watchman stands guard over the pseudo-principality.

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