The Free Territory & Free Port of Trieste:
commercial, fiscal, financial advantages
and international strategic roles
Content: synthesis of the current legal status, of the commercial and financial advantages, as well as of the strategic roles of the Free Territory of Trieste as independent, Euro-Mediterranean micro state without public debt, equipped with an international Free Port, free in term of taxes, banking, insurances, holding rights to mint or issue its own currency, to have its own stock exchange, naval register and aeronautic register.
1. The Free Territory of Trieste
The Free Territory of Trieste - F.T.T. is established and recognizes since 15 September 1947 as a Member State de jure of the United Nations, under the aegis of the Security Council and with an international Free Port by virtue of Resolution S/RES/16 (1947) of the Security Council and of the Treaty of Peace with Italy signed at Paris on 10 February 1947, and with the successive territorial changes occurred after Security Council Resolutions S/RES/753(1992) and S/RES/754 (1992).
Therefore, the Free Territory of Trieste, with a 212km2 surface and 240.000 inhabitants, is one of the eight micro-states of Europa, along with Monaco, Liechtenstein, Luxembourg, San Marino, Vatican City, Andorra and Malta. It has an established tradition of independence since the XIII century, confirmed through half a millennium of voluntary connection with Austria (1382-1918), interrupted by 27 years of Italian occupation and annexation (1918-45) and restored by the Treaty of Peace of 1947.
The current Provisional Regime of government of the Free Territory of Trieste is a form of special trusteeship of the United Nations, halfway between the International Trusteeship System and the more recent UN Transitional Administration.
2. The international Free Port and the rights of all other States
The port of Trieste has a special, international and European strategic value as it is the most Northern port of both the Adriatic and the Mediterranean seas and it benefits of the only status of international Free Port in the World.
The regime of international Free Port of the Free Territory of Trieste recognizes to the maritime, commercial, artisan, industrial and financial enterprises of all States of the World the right to free traffic, store-housing, trading and manufacturing their goods, without taxes and without discriminations.
The Treaty of Peace does as well establish that the management of the international Free Port is overseen by an International Commission, whose membership rights are held by both European (France, United Kingdom, Switzerland, Austria, Hungary, Poland, Czech Republic, Slovakia, Slovenia, Croatia and other Successor States of Yugoslavia, Italy), and extra-European States (United States of America, Russia and other Successor States of the USSR).
After the end of the Cold War and of the dissolutive crisis of Yugoslavia, the international Free Port of the Free Territory of Trieste has gained new strategic roles for the free development of European and international economy, especially when it comes to the increasing of traffics on the Baltic-Adriatic and Transsiberian Routes and the doubling of the Suez Canal, through the natural, strategic terminals consisting in three ports of Eastern Adriatic: Trieste (Free Territory), Koper (Slovenia) and Rijeka (Croatia).
3. The other economic, fiscal and financial advantages
Other than being equipped with an international Free Port, the Free Territory of Trieste has no public debt, it is free in term of taxes, banking, insurances, the rights to mint or issue its own currency, to have its own stoke exchange, naval register and aeronautic register and also the right to hold the registers for the ships and vessels of five European States without a direct access to the sea: Switzerland, Austria, Hungary, Czech Republic, Slovakia.
The Free Territory of Trieste is neither a Member State nor an Associated State of the European Union, to which it is temporarily aggregate since 1954 under the provisions of current article 355, paragraph 3 TFEU, but this aggregation has never been refined with the needed agreements. Due to this, the Free Territory of Trieste does not have legal obligations to enforce the laws of the European Union, nor to use its currency.
4. Territorial definition
Since 1992, the plebiscites and the international recognitions of the independent Republics of Slovenia and of Croatia, consolidated with Security Council Resolutions S/RES/753(1992) and S/RES/754 (1992) produced effects of Article 30, point 3 of the Vienna Convention on the law of treaties, preventing only the enforcement of the norms of the Treaty of Peace regarding the inclusion within the Free Territory of Trieste of an accessory area (formerly defined as “Zone B”) previously under the administration of the no longer existing government of Yugoslavia.
For these effects, the current Free Territory of Trieste consists in the capital city, Trieste, with the international Free Port and five smaller municipalities and it has not territorial disputes with its bordering (Italy, Slovenia) and neighbour States (Croatia).
5. The legal system of the Free Territory of Trieste
The legal and administrative status of the current Free Territory of Trieste and of its international Free Port is established under multilateral normative instruments that have not been amended by other international instruments with the same rank in the hierarchy of laws and cannot be amended with interpretations, national laws or bilateral agreements.
The provisions of the Treaty of Peace of Paris establishing the Free Territory of Trieste, its legal order and its relations with the United Nations and with other States are articles 4, 21, 22, 48 point 5, 78 point 7, 79 point 6 g, 85 and Annexes I D (Frontiers), VI (Permanent Statute), VII (Provisional Regime), VIII (Instrument for the international Free Port), IX (Technical dispositions), X (Economic and Financial Provisions).
In execution of the Treaty of Peace, the first State Government of the Free Territory of Trieste was established from 15 September 1947 as “Allied Military Government Free Territory of Trieste”, entrusted to the Government of the United States and to the Government of the United Kingdom.
The legal and administrative status of the Free Territory of Trieste has been recognized and confirmed also under the international and European agreements in which it became a Contracting State, along with the European State currently belonging to the EU, with Turkey and the USA, between 1947 and 1958: GATT, ICPO, ERP, OEEC, EPU, ECMT, and others, and with bilateral agreements signed between the Free Territory of Trieste and Italy (1948), with the USA (1949, 1951) and with the UNO (1952).
The Republic of Italy has recognized, without reserves, this legal and administrative status of the Free Territory of Trieste and of its international Free Port by signing, ratifying and executing both the Treaty of Peace and all other multilateral and bilateral agreements of which Italy and the Free Territory of Trieste are Contracting States.
Since 1954, the current Free Territory of Trieste is entrusted under the temporary civil administration of the Italian Government (not that of the Republic of Italy) under a Memorandum of Understanding added to the Treaty of Peace to update the enforcement of the norms of the Treaty regarding the Provisional Regime of government. Both the Treaty of Peace and this Memorandum are in force (see also: US Department of State, Treaties in Force, 2013).
Therefore, the provisional Italian Government has, to this day, jurisdiction over two different States and under different titles: over the Republic of Italy, on behalf of the Italian Parliament, and over the current Free Territory of Trieste on behalf of the Security Council of the United Nations.
Due to this, the Italian Government and its Ministry of Foreign Affairs do also act as foreign representatives and they represent, before the European Union, two different sovereign States: the permanent representation abroad of the Republic of Italy and the temporary foreign representation of the current Free Territory of Trieste.
The European Union has recognized in its official acts this legal an administrative status of the current Free Territory of Trieste and of its international Free Port as established under the Treaty of Peace of 1947 and under the Memorandum of Understanding of 1954, which it has no power to repudiate nor to amend, either directly or indirectly.
5. Strategic roles of the Free Territory of Trieste and of its Free Port.
The city-port of Trieste is on the most Northern shore of the Adriatic sea, in the most favourable position for the trades with Central and Southern Europe through the Mediterranean sea, the Suez Canal and Gibraltar and, in particular, for the Baltic-Adriatic route, which is connected to the Pacific via the polar route and the transsiberian railroad system.
Because of its natural strategic role, Trieste developed as a free port from 1719 to World War I, becoming the main port of the Austrian-Hungarian monarchy and one of the main ports in Europe, between 1918 and 1943 it was occupied and annexed to the Kingdom of Italy, while between 1943 and 1945 it was under Nazi Germany.
After being freed by Allied Forces in 1945, in 1947 Trieste was declares an independent State and international Free Port under the protection and responsibility of the Security Council of the United Nations, but its strategic role was frozen by the Cold War 1947-1991 and then by the dissolutive crisis of Yugoslavia.
After the consolidation of the independent Republics of Slovenia and Croatia between 1992 and 2013, as parts of the NATO and of the European Union, the complete activation of the Free Territory of Trieste as independent micro state, international Free Port and as international financial and free trade centre has gained a decisive role for the economic and political stabilisation of South-eastern Europe.
In particular, when it comes to the economic stabilisation of the former Yugoslav area, there are instruments of international law to create, with specific agreements between the Free Territory of Trieste, Slovenia and Croatia, new free zones of the international Free Port of Trieste in the nearby Slovenian port of Koper and in the Croatian ports of Rijeka, connected to Hungary, and Ploče, connected to both Bosnia-Herzegovina and Serbia.