It bordered the new Italian Republic to the north, and the Socialist Federal Republic of Yugoslavia to the south and to the east. The Free Territory was established on 10 February 1947 by a protocol of the Treaty of Peace with Italy in order to accommodate an ethnically and culturally mixed population in a neutral environment free from the rule of either country. The Free Territory was de facto given to its two neighbours in 1954 and this was formalised much later by the bilateral Treaty of Osimo of 1975, ratified in 1977.[102] During the late 1940s and in the years following the division of the Territory, up to 40,000 people[103] (mostly Italians) chose to leave the Yugoslav B zone and move to the A zone or Italy for various reasons: Some were intimidated into leaving, and some simply preferred not to live in Yugoslavia.