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From the archive, first published Wednesday 7th Jun 2000.
The Government has insisted a planned offshore data haven off the Essex coast on a platform in the North Sea would not escape UK law.
A group of American entrepreneurs hope the scheme on Sealand, a concrete fortress six miles off Essex, will allow their customers to get around a new law being introduced in Britain designed to let the Government intercept internet communications.
They are installing computer systems on the platform, owned by Westcliff man Roy Bates, which was built during the Second World War so soldiers could shoot at German bombers as they crossed the North Sea.
The platform has been occupied by retired British Army major Mr Bates and his family since 1967. He declared it a sovereign state in 1975, with its own constitution, currency and passports.
However, a Home Office spokesman said: "The UK does not recognise Sealand as an independent state.
"It is within UK territorial waters. If they set up a computer service provider there, we may require them to provide us with an intercept capability."
He refused to speculate on how the Government would enforce the law against Sealand, which is protected by armed security guards and has enough food and fuel to last for a year.
American Sean Hastings, of HavenCo, contacted Mr Bates's son Michael from his base in California, with the idea of setting up the data haven.
Michael said: "We are talking about freedom, liberty and making it easier to do business in private."
The plan is to rent out space on the computers they have set up in one leg of the platform to companies who want to run their electronic businesses free from Government interference.
In Britain, the Regulation of Investigatory Powers Bill, currently going through Parliament, would require every internet service provider to install a box that would enable MI5 to "listen in" on everything passing through it.
It would also require anyone who had encrypted information stored on their computer to hand over the decryption key. Anyone who refused would face up to two years in jail.
The Government claims the new law is essential to combat terrorism.
Converted for the new archive on 19 November 2001. Some images and formatting may have been lost in the conversion.
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