Back in NWEC 2014 we had some very specific rules that resolved and avoided nation/coalition drama like this. Most of it was never publically released but I'm going to release it here so that people can see how we did it and why it might be useful for this tournament.
Nation Eligibility Rules: 1. Persons who hold citizenship in the country are eligible to play for the nation.
2. Persons who hold permanent residency in the country are eligible to play for the nation.
3. Persons who have significant ancestry, e.g. a parent who originates from the country in question,
and who also speak the official language(s) fluently, are eligible to play for the nation.
4. Persons who are within the same Region, as defined by NWEC, are eligible to play for the nation provided the
Region Rules are not violated:
Region Rules: Regions are defined by areas of common colour:
https://db.tt/xrCwRMoq 1. Nation A can recruit players from Nation B only if both nations are in the same region.
2. Nation A can only recruit these players if Nation B cannot form a team.
3. Nation A can only recruit Nation B's players if more than 50% of the team remains from Nation A.
(On top of that exceptions were made for the nations of ex-Czechoslovakia and ex-Yugoslavia to make common teams make teams provided the nations involved could not make teams of their own.)
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These rules more or less cover every possible conflict over nation eligibility to a reasonable degree in my opinion. They enable, for example: an ethnic Russian living in Ukraine to play for Russia, an Italian-speaking Swiss to play for Italy, a 2nd-generation Turk living in Germany to play for Turkey, a player from Monaco to play for France since Monaco will probably never have enough for a team, the ex-Yugoslavs to form a team if none of their nations have enough to make individual teams.
To give some examples of what was achieved with this rule-set which allowed more people to take part without breaking the whole notion of a 'national' competition:
Archer - He's from either Latvia or Estonia (can't remember which) but was allowed to play for Finland via the Region rules since Latvia/Estonia could not make a team
Berkovic - 2nd generation Turk living in Belgium: has Turkish parents and speaks fluent Turkish, allowed to play for Turkey
Bulgarian_Soldier - Bulgarian allowed to play for ex-Yugo provided 50% plus of ex-Yugo team remained ex-Yugo
Kore and Smyky allowed to play together in ex-Czechoslovakia team when one is Czech and the other is Slovak
I think adopting these rules would solve a lot of the problems we're having at the moment.