In the last decades of the Galactic Republic, the Free Trade Zones were untaxed trading areas within the territories controlled by the galaxy-spanning government. The Trade Federation often used them in their business.

Around 32 BBY, the Galactic Senate passed Prop 31-814D, making the Free Trade zones eligible for taxation. The Trade Federation retaliated by invading the remote planet of Naboo with its private droid force, secretly backed up and manipulated by a malevolent Dark Lord of the Sith named Darth Sidious.