The Economist explains

How are maritime boundaries determined?

The UN convention is widely accepted, even where not formally agreed

A CANNON SHOT fired from the coast can hit a ship three nautical miles out to sea. In the 17th century, this was the basis for maritime boundaries. Countries could claim sovereignty as far as they could defend from the shore. Today land is still the basis of claims over the sea, and with countries projecting their military and economic power farther across the waves, competing claims have left the oceans fraught with disputes: 39% of sea boundaries are yet to be agreed. However, this matters less than may be expected.

Since 1982 oceans have been governed by the United Nations Convention on the Law of the Sea (UNCLOS). Countries calculate their maritime claims according to a simplified outline of their territory. For countries attached to a continental land mass, like Italy, it roughly tracks the coast; for archipelagoes, like Indonesia, it skirts the farthest islands. Any water enclosed within this line, whether fresh or salty, is classed as inland water. Countries have absolute authority here: no ship can pass through without permission, except on official sea lanes, and domestic laws apply as they do on land.

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