On July 1943, the British Government proposed to the American and Soviet Governments the “principles which would govern the conclusion of hostilities with the European members of the Axis.” Those principles were the joint system of occupation control and the equal position of the three Allied Governments. By this “memorandum of July 1st”, the British Government intended to prevent a Soviet separate armistice with Germany and Soviet exclusive control on the satellites of Germany.
However, the first axis state to surrender was Italy in September. Then, at the Moscow Foreign Ministers' Conference in October, the British Government proposed a new system on control machinery for the occupation of Italy, namely, the Allied Control Commission composed of Anglo-American representatives with exclusive authority to administer the occupation. There was only one Soviet representative with observer status and a merely advisory role. This exclusive occupation control system was generally called the “Italian Formula”.
This Formula was applied next to Rumania. In this case, the Soviet representative had exclusive authority and Anglo-American representatives were only observers. The “Italian Formula” was also applied to Bulgaria and Hungary, and in the case of Germany it was applied to each separate zone. In the end, the Japanese occupation was also controled substantially with this Formula.
As mentioned above, the “Italian Formula” was applied to all the Axis powers and under this Formula the United States and the Soviet Union carried out occupation policies. Their policies embodied “Unconditional Surrender” aimed at the reorganization of the entire state structure of the defeated Axis. Within the exclusive systems, this reorganization was basically exercised on the principles of the American and Soviet social systems. Thus, the exclusive occupation control systems prepared the division of the ex-Axis powers in Europe and Asia into American-Soviet spheres of interest and formed the basic structure of the Cold War.

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