Recognition beyond Territory: The Functional Transformation of Sovereignty in International Law

This article examines the gradual transformation of sovereignty from a predominantly territorial concept into a more functional and relational form of authority within contemporary international law. It argues that contemporary legal practice increasingly normalises functional authority before formal recognition, particularly in the context of extraterritorial regulation, digital governance, and transnational institutional systems.

Drawing on examples including the extraterritorial operation of the GDPR, transnational sanctions regimes, platform governance, the Sovereign Order of Malta, and governments in exile, the article develops the concept of functional sovereignty: authority grounded in institutional continuity, normative coherence, and external recognition rather than exclusive territorial control.

The article does not argue that DAOs or digital platforms constitute sovereign states or subjects of international law. Instead, it proposes a doctrinal framework for understanding how non-territorial governance structures may gradually acquire forms of practical legal recognition through sustained institutional engagement and accumulated state practice.

The paper contributes to contemporary debates on sovereignty, jurisdiction, recognition, digital governance, and post-territorial political authority in international law.

SSRN version: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6763040