Shaw suggests that the criterion may have undergone modification and that effective control over the entire territory and population is less critical than it used to be.41 The fourth element in the Montevideo Convention, the ‘capacity to enter into relations with other States’, finds differentiated treatment. Although it is accepted that all States must have the capacity to enter into such relations, it ‘is no longer, if it ever was, an exclusive State prerogative’.42 Instead, many authors emphasize ‘independence’,43 as ‘the decisive criterion of statehood’.44 A distinction is also drawn between ‘formal independence’, whereby all powers, both internal and external, over a certain territory should rest with the government, and the ‘real or actual independence’ of that government. In principle, both are necessary, but in fact, ‘actual independence’ is often challenged without statehood being called into question. Even ‘formal independence’ may be compromised to a degree: Shaw, for example, cites the case of Bosnia and Herzegovina, where independence was recognized despite a considerable degree of international supervision.45 There have been few cases of extinction of States and, of those that have occurred, extinction has occurred in the context of succession, whereby another State replaced the extinct one. The situation of low-lying island States would be unique in this sense, inasmuch as there would, in principle, be no successor States in such cases.46 Normally, a presumption of continuity applies to existing States even if the criteria of statehood appear to be met in a limited fashion only.47 There is, however, no precedent for loss of the entire territory of a State or the exile of the entire population of a State. When considering continuity of statehood, Shaw notes that ‘one has to consider the classical criteria of statehood together with assertions as to status made by the parties directly concerned and the attitudes adopted by third States and international organizations.’48 In fact, continuity has been accepted despite sometimes very extensive loss of actual authority.49 It would not matter whether such loss of authority occurred due to extensive civil strife or the breakdown of order due to foreign invasion or natural disasters.50 For instance, the governments in exile of a number of countries continued to issue national passports during World War II (WWII) and their authority to do so was not questioned.51 Governments in exile have been able to continue diplomatic relations with other States, the key issue being whether they were recognized as States or not.52 Statehood may in fact continue even when a 41 He compares the delay with which Finland had been recognized to the more immediate recognition of Croatia and Bosnia-Herzegovina, for example, although these governments did not control sizeable portions of the territory claimed; Shaw, note 32 above, 200-201. 42 Crawford, note 27 above, 61. Akehurst/Malanczuk also note that it ‘is not generally accepted as necessary’: Malanczuk, note 30 above, 79. 43 Brownlie, note 30 above, 71. 44 Brownlie, note 30 above, 71. 45 Shaw, note 32 above, 203-204. 46 An exception would be if union were achieved with another State prior to extinction. 47 Crawford, note 27 above, 89. 48 Shaw, note 32 above, 203-204, 960. 49 Crawford, note 27 above, 89. 50 Brownlie, note 30 above, 71. 51 A. Grahl-Madsen, The Status of Refugees in International Law, Volume I: Refugee Character (Leyden: A.W. Sijthoff, 1966) 259. 52 See S. Talmon, Recognition of Governments in International Law with Particular Reference to Governments in Exile (Oxford: Clarendon Press, 1998) 115-206. A number of restrictions apply, however, to governments in exile, particularly in terms of jurisdiction. These are elaborated further below. 6