Historically, there were 3 Federal Territories administered by the Federation:
- Balangrad Capital Territory - the administrative center of the Federation
- Territorio Sovrano di Mondeo (TSM)
- Collateral Hellenic Territories (CHT)
The formation of both TSM and CHT was induced by illegal actions against the Federation and related entities, In the case of the TSM, legal action was concluded successfully, leading to the final dissolution of the TSM entity. In the case of the CHT, it was decided to rescind any open claims as a sign of solidarity with the population of the Hellenic Territories.
On 2021.01.01, a Federal Law regarding the creation and administration of "Sovereign Overseas Territories" came into force. These territories are sovereign, like FM States, with the right of leaving the Federation and becoming independent, but are aligned to a defined FM State which is responsible for their administration and welfare.
The law creates a three-tiered system of sovereignty:
- Sovereign Overseas Territories have full sovereignty in regards to local affairs, their form of government and representation.
- The FM state they are associated to is responsible for their defense, their critical infrastructure (transport, postal service and electronic communications services) and the supervision of their law and currency systems. It has to offer the citizens of the S.O.T. the same rights of economical, social and political participation as to their own citizens.
- The Federated Micronations guarantee the full sovereignty of the Sovereign Overseas Territories, protecting their agreed rights against their Association State, including the right to change the Association State or to leave the Federation.
This law was enacted to resolve the open issue of the "Antilles Musiennes", annexed by the Dershowo Musograd in 2018, and the accession of Sandy Island, a territory in the Pacific for which the Republic of Capricornia had offered its stewardship.
On 2022.01.01, the "Joint Sovereign Base", founded in summer 2021 by the Balanda Republic, Capricornia and Naquarnia, was integrated in the F.M. as a Sovereign Territory. Its status is different from the S.O.T.'s as it is not allowed to leave the Federation - in case of its dissolution, its territory would fall back to the Balanda Republic.