Free Territory of Trieste
For centuries, Trieste and Istria had been a part of the Austrian Empire, and later Austria-Hungary. The rural area was populated by Slovenes in the north and by Croats in the southeast, while Italians constituted the majority of inhabitants in Trieste, Rijeka and the towns of Istria.
In 1921 Italy formally annexed Trieste, Istria and
part of what today is western Slovenia. In 1924 Italy further annexed the Free
State of Fiume, now the city of Rijeka in Croatia. During the 1920's and 1930's
the Slavic population was subjected to Italianization and discrimination under
the Italian Fascist regime, they were also exposed to violence.
Italy fought with the Axis powers in World War II. When the Fascist regime collapsed in 1943 and Italy capitulated, Slovenia and Croatia formally annexed the territory, but German forces occupied it. The Yugoslav army captured Trieste on May 1, 1945. When Yugoslav partisans liberated the city provisional stamps were briefly used there. Those were overprinted stamps of Socialist Republic of Italy (example). The British 8th Army arrived on the next day.The Yugoslav soldiers left on June 12, 1945, thus keeping to an agremeent between Yugoslavia and the Western Allies reached on May 12.
On February 10, 1947, a peace treaty was signed with Italy in Paris, establishing the Free Territory of Trieste. It was established in order to accommodate an ethnically and culturally mixed population in a neutral country. The intention was also to cool down territorial claims, due to its strategic importance for trade with Central Europe Official languages were Slovenian and Italian. The territory was, however, divided into two zones: Zone A, including Trieste, which was administered by British and American forces, and Zone B, including north-western Istria, which was administered by the Yugoslav National Army. The Territory thus never functioned as a real independent state. Even so, its formal status was respected and it issued its own currency and stamps. In Zone A overprinted Italian stamps were used (example), and in Zone B overprinted Yugoslav and some uniquely designed stamps were in use (example).
In 1954 a Memorandum of Understanding was signed in London. It gave a provisional civil administration of Zone A (with Trieste) to Italy and Zone B to Yugoslavia. In 1975 the Treaty of Osimo was signed in Osimo, definitively dividing the former Free Territory of Trieste between Italy and Yugoslavia.
A map of Trieste Gulf:
source: Ivanic Martin: Kratka ilustrirana zgodovina Slovencev, Ljubljana: Mladinska knjiga, 1999