If you haven't access to the DoD Laws of War Manual, here's 11.4 in a nutshell.

11.4 LEGAL POSITION OF THE OCCUPYING POWER

Military occupation of enemy territory involves a complicated, trilateral set of legal relations between the Occupying Power, the temporarily ousted sovereign authority, and the inhabitants of occupied territory. The fact of occupation gives the Occupying Power the right to govern enemy territory temporarily, but does not transfer sovereignty over occupied territory to the Occupying Power.

11.4.1 Right of the Occupying Power to Govern the Enemy Territory Temporarily.

The right to govern the territory of the enemy during its military occupation is one of the incidents of war. By the fact of occupation (i.e., the Occupying Power’s established power over occupied territory), the Occupying Power is conferred the authority to exercise some of the rights of sovereignty. The exercise of these sovereign rights also results from the necessity of maintaining law and order, indispensable both to the inhabitants and to the occupying force, and the failure or inability of the legitimate government to exercise its functions, or the undesirability of allowing it to do so.

11.4.2 Limitations on the Power of the Occupying Power Stemming From Its Lack of Sovereignty Over Occupied Territory.

Belligerent occupation in a foreign war, being based upon the possession of enemy territory, necessarily implies that the sovereignty of the occupied territory is not vested in the Occupying Power. Occupation is essentially provisional. Because sovereignty is not vested in the Occupying Power, the fact of military occupation does not authorize the Occupying Power to take certain actions. For example, the Occupying Power is not authorized by the fact of belligerent occupation to annex occupied territory or to create a new State. In addition, the Occupying Power may not compel the inhabitants of occupied territory to become its nationals or otherwise to swear allegiance to it. Similarly, in view of the provisional nature of belligerent occupation, the authority of the Occupying Power under occupation law has been interpreted as being subject to limitations on the ability of the Occupying Power to alter institutions of government permanently or change the constitution of a country.

11.5 DUTY OF THE OCCUPYING POWER TO ENSURE PUBLIC ORDER AND SAFETY

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