Japan claims ownership of several islands north of Hokkaidô. These include the two southernmost Kuril Islands, Ostrov Iturup (Etorofu-jima) and Ostrov Kunashir (Kunashiri-jima), as well as Shikotan and the Habomai island group. The Union of Soviet Socialist Republics (USSR) took control of these islands from Japan after World War II ended in 1945. Since the USSR dissolved in 1991, Russia has administered the disputed islands.

After World War III, Japan seized control of these Islands under no protest. The resident Russian population was allowed to remain as immigrants, and many of them accepted the situation on Ostrov Iturup, the most populace of islands. Clashes still occur between the different ethnic groups on the Ostrovs. Several abandoned Russian military bases sit still, unoccupied. At least two navel bases were also abandoned and even an underground submarine dock. Several corporations like Sagawa shifted facilities onto Iturup, moving onto the old base facilities. A Geofront was also constructed there. Because of the massive immigrant population, and the precarious political position of the islands, several black markets exist, especially on Iturup.