STATE'S DRAFT COMPACT OF FREE ASSOCIATION INCLUDING A DRAFT PRESIDENTIAL LETTER AND SECTION-BY-SECTION ANALYSIS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP95B00895R000200050031-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 97
• Document Creation Date: December 21, 2016
• Document Release Date: December 2, 2008
• Sequence Number: 31
• Publication Date: December 29, 1983
• Content Type: MEMO

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EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
wAcwINCTON_ D.C. 20503
December 29, 1983
LEGISLATIVE REFERRAL MEMORANDUM
SPECIAL
TO: Legislative Liaison Officer-
National Security Council
Department of Defense
Department of Justice
Department of Energy
Department of the Interior
Department of Commerce
Federal Communications Commission
Environmental Protection Agency
Council for Environmental Quality
U.S. Trade Representative
Department of Health and Human Services
Department of Education
Department of Agriculture
Office for Micronesian Status Negotiation
Federal Emergency Management Agency
U.S. Postal Service
Department of Transportation
Civil Aeronautics Board
General Services Administratio
Department of the Treasury
l Intelligence Agency
Centra
Department of Housing and Urban Development
SUBJECT: State's draft Compact of Free Association, including a
draft Presidential letter and Section-by-Section Analysis.
The Office of Management and Budget requests the views of your
agency on the above subject before advising on its relationship
to the program of the President, in accordance with OMB Circular
A-19.
A response to this request for your views is needed no later than
c o b Thursday. January 12, 1984. Your agency's timely response
to this request is essential so that the Compact may be
transmitted to Congress early in 1984.
Questions should be referred to Randy Coleman (395-4606) the
w
legislative analyst in this office or to Bruce Sasser (395-4580).
K.
RONALD K. PETERSON FOR
Assistant Director for
Legislative Reference
cc: D. Allen A. Belasco S.Gudesnhorf 1Z O r C' A L
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The Speaker
The House of Representatives
Washington, D.C.
Dear Mr. Speaker:
I am transmitting herewith a proposed Joint Resolution which
would provide Congressional approval of the "Compact of Free
Association", the negotiated instrument setting forth the future
political status of two of the political jurisdictions comprising
the Trust Territory of the Pacific Islands and their future
relationship with the United States. The full text of the Compact
is included in the Joint Resolution.
During the year of 1983, the peoples of the Federated States
of Micronesia, the Marshall Islands and Palau, which are the three
political jurisdictions of the Trust Territory of the Pacific
Islands with which the Compact was negotiated, voted in United
Nations-observed plebiscites to approve the Compact. These
historic votes constituted valid exercises by the peoples of the
Federated States of Micronesia, the Marshall Islands and Palau of
their right to.self-determination. In each case, the people
expressed a preference for a free association relationship with
the United States over either independence or another kind of
relationship with this country. These plebiscite results with
respect to the Federated States of Micronesia and the Marshall
Islands clear the way for approval of the Compact by Congress and
subsequently the implementation of its provisions as to those
jurisdictions. In 'the case of Palau, a Palauan judicial
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interpretation, which considered that the plebiscite results fell
short of the Palauan constitutional requirement for a seventy-five
percent majority approval of certain defense-related provisions of
the Compact, has prevented that government from completing its
constitutional approval process on the basis of those results.
The Compact cannot therefore be applied to Palau unless this
constitutional issue is resolved.
The passage by Congress of the Joint Resolution approving the
Compact of Free Association will constitute a landmark step in the
process leading to the termination of the Trusteeship Agreement
with the United Nations Security Council which the United States
entered into by Congressional joint resolution on July 18, 1947.
Another political jurisdiction of the Trust Territory of the
Pacific Islands, the Northern Mariana Islands, will become a
commonwealth of the United States pursuant to the terms of
Northern Mariana Islands Commonwealth Covenant, P.L. 94-241, 90
Stat. 263, upon termination of the Trusteeship Agreement.
The Compact of Free Association for which I am seeking
approval was signed for the United States by my personal
representative, Ambassador Fred M. Zeder II, on August 26, 1982
with the Republic of Palau, on October 1, 1982 with the Federated
States of Micronesia and on June 25, 1983 with the Republic of the
Marshall Islands. It is the result of more than thirteen years of
continuous and comprehensive negotiation between the United States
and broadly representative groups of elected delegates from each
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of the prospective freely associated states. The fact that the
Compact of Free Association was approved by impressive majorities
with high voter participation is testimony to the close and
widespread interest and involvement of the general populations of
the three states in the negotiating process. Likewise, the
Executive Branch has taken pains to keep Congress, and parti-
cularly the committees with jurisdiction over the Trust Territory,
abreast of progress in the negotiations. In this regard, we
appreciate the many useful suggestions made over the years by
members of both houses, most of which are reflected in the
language of the Compact of Free Association.
In preparation for their assumption of the status of freely
associated states, the peoples of the Federated States of
Micronesia and the Marshall Islands have drafted and inaugurated
constitutions with bills of rights and representative governments
based on democratic principles. For its part, the United States,
acting through the Secretary of the Interior and the High
Commissioner, has delegated to these governments the major
executive, legislative and judicial powers granted it as
administering authority under the Trusteeship Agreement with the
United Nations. These constitutional governments carried out
complete and objective public education programs in advance of the
plebiscites in which their citizens voted to approve the Compact.
The Compact of Free Association, together with its related
agreements, will regulate the relations of the United States with
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each of the freely associated states and it will define their
international political status. The political status which the
peoples of the Trust Territory have chosen in approving the
Compact is not independence nor is it that of a United States
territory. Rather, the Compact, like the present Trusteeship
Agreement, recognizes the inherent sovereignty of the peoples of
the freely associated states and thus recognizes a legitimate
foundation for their constitutions and their governmental acts.
Under the Compact of Free Association, the Federated States of
Micronesia and the Marshall Islands will be fully self-governing
and the United States will recognize their competence to conduct
their own foreign affairs, subject to the full authority and
responsibility of the United States for all security and defense
matters irr or relating to the Federated States of Micronesia and
the Marshall Islands, which is a central element of the overall
free association relationship. Economic assistance from the
United States to each of the freely associated states will run for
an initial period of fifteen years.
All of the provisions of the Compact of Free Association have
been carefully negotiated, were mutually agreed and have been
specifically approved by the peoples of the Federated States of
Micronesia and the Marshall Islands in the plebiscites I have
mentioned. I request that Congress take note of the agreements
subsidiary to the Compact which are included in my transmission
with the Joint Resolution. These agreements have all been
negotiated, mutually agreed and fully approved by the Federated
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States of Micronesia and the Marshall Islands. While I do not
seek enactment of these agreements, I note their importance in
elaborating many of the terms of the Compact. With the proposed
Joint Resolution, I am also enclosing a section-by-section'
analysis in order to facilitate your consideration of the
Compact's terms.
In this letter, I invite your attention to the division of
the Compact into four major titles. Title One describes and
regulates the general governmental relations between the United
States and the freely associated states. It recognizes the
self-governing status of the peoples of the Federated States of
Micronesia and the Marshall Islands and the competencies of their
duly elected governments. The provisions in Title One concerning
telecommunications, immigration, representation, environmental
protection and general legal matters prescribe terms generally
equivalent to those already in effect under the Trusteeship.
Title One will result in a complete cessation in the application
of United States laws to the freely associated states, except for
those laws specifically made applicable in the Compact. Lastly,
this title contains a provision for the settlement of all claims
arising out of the nuclear weapons testing program conducted by
the United States in the Marshall Islands between 1946 and 1958.
Title Two of the Compact will authorize the appropriation of
fifteen years of direct grant assistance to each of the freely
associated states and will authorize certain federal agencies to
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continue to provide services and assistance at the level these
services were provided under the Trusteeship Agreement. As in the
case of the Northern Mariana Islands Commonwealth Covenant, the
resolution approving the Compact constitutes a commitment and
pledge of the full faith and credit of the United States for the
appropriation and payment of the guaranteed levels of funding so
specified. The fiscal authority necessary to meet United States
commitments during the first year of the Compact is approximately
$295.644 million for the Federated States of Micronesia and the
Marshall Islands. This amount contains the partial inflation
adjustment which the Compact specifies and several one-time
special purpose payments including the creation of the Marshall
Islands nuclear claims trust fund. Thereafter, the average total
anticipated annual funding called for in the Compact is approx-
imately $115.4 million not including estimates for partial
inflation adjustment but including estimates for the specified
federal services. It is the Administration's opinion that the
aggregate U.S. outlays under the Compact over the fifteen-year
funding period will be lower by some $300 million than would have
been our outlays were the Trusteeship to continue for the same
period.
Title Three of the Compact recognizes the continued full
United States authority and responsibility for all security and
defense matters in or relating to the Federated States of
Micronesia and the Marshall Islands. As a corollary, the freely
associated states have agreed to refrain from any action which the
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United States unilaterally determines to be incompatible with its
security and defense authority and responsibility. In addition,
access to the freely associated states by military forces of any
third country will be denied, except as agreed to by the United
States, and the United States pledges to defend and protect the
Federated States of Micronesia and the Marshall Islands as the
United States and its own citizens are defended. Subordinate
agreements referred to in Article II of Title Three provide for
continued United States use, for thirty years, of the civilian
contractor-operated Kwajalein Missile Range in the Marshall
Islands. They also will regulate the status of United States
forces in the area.
Of special importance are the agreements, authorized by
Compact Section 354, which extend indefinitely the right of the
United States to deny entry into the Federated States of Micro-
nesia and the Marshall Islands to the military forces of other
nations and the responsibility of the United States to defend the
Federated States of Micronesia and the Marshall Islands from
external threat to their freedom and territorial integrity. I can
assure the Congress that the United States defense and land use
requirements were carefully considered throughout many years of
negotiation, are critical to the maintenance of our strategic
position in the Pacific and are a vital component in our ability
to guarantee the preservation of regional stability and peace.
Title Four of'the Compact describes the administrative
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aspects of the free association relationship including provisions
for the approval and effective date of the Compact, its amendment,
and the settlement of disputes not arising out of Title Three.
This title provides that the Compact, and therefore the free
association relationship, may be terminated at any time by the
United States or by Government of the Federated States of
Micronesia or the Marshall Islands, respectively. Should such
termination occur before the fifteenth anniversary of the
Compact's effective date, the economic assistance prescribed in
Title Two would continue with only minor modifications for the
duration of the Compact's original fifteen-year term, as would
full United States security and defense authority.
The Compact has been finally approved, as is required by its
terms, by the Government of the Federated States of Micronesia and
the Government of the Marshall Islands in accordance with their
respective constitutional processes. These approvals certify that
there remain no constitutional or legal impediments under the
domestic law of those jurisdictions to the validity of the
acceptance of the Compact by those states. These approvals also
clear the way for formal consideration and approval of the Compact
by the Congress as respects the Federated States of Micronesia and
the Marshall Islands. Since certain provisions of the Palauan
constitution and the negotiated security and defense provisions of
the Compact have not been reconciled, as stated above, thus
precluding the Government of Palau from approving the Compact, I
will not now request the Congress to approve the Compact for
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Palau. Further discussion of this subject with Palau or the
negotiation by Palau of another future political status
arrangement acceptable to the United States should not delay our
approval of the Compact for the Federated States of Micronesia and
the Marshall Islands.
I urge the Senate and the House to take early, positive
action to approve the Compact of Free Association which, when it
enters into force, will become law in accordance with its
provisions. The peoples of the Federated States of Micronesia and
the Marshall Islands have spoken loudly and clearly at the
negotiating table and in their plebiscites. They deeply desire to
implement their chosen future political status. More importantly,
they fervently seek a new relationship with the United States,
founded in mutual agreement and equality and deserving of the
highest and best traditions of our beloved country.
Sincerely,
Ronald Reagan
Proposed Joint Resolution;
Section-by-Section Analysis of the Compact;
Related Agreements.
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SECTION-BY-SECTION ANALYSIS
OF
THE COMPACT OF FREE ASSOCIATION
AND
DESCRIPTION OF ITS TERMS
The Compact of Free Association is divided into a preamble
and four titles: Governmental Relations; Economic Relations;
Security and Defense Relations; and General Provisions.
PREAMBLE
The Preamble states that the relationship which will exist
between the United States and the three states emergent from the
Trust Territory of the Pacific Islands is "Free Association."
The Preamble recognizes that the agreement is concluded on a
government-to-government basis; that the peoples of the Trust
Territory have and retain their sovereignty and their sovereign
right to self-determination; that the Freely Associated States
(FAS) are self-governing under their own constitutions; and that
the political and legal relationship between the FAS and the
United States is fully described and governed by the Compact. The
Preamble recognizes the competence of the constitutional govern-
ments with the Trust Territory to enter into the Compact and
supports the legitimacy of the new political status as consistent
with the goals of the United Nations trusteeship system and
consequently as a basis for termination of the Trusteeship.
TITLE ONE
GOVERNMENTAL RELATIONS
Article I, Self-Government
Section 111. This section recognizes that the peoples of the, FAS,
acting through their constitutional governments, are self-gover-
ning. This recognition is the foundation of the government-to-
government agreement and is consistent with the international
political status of free association.
Article II, Foreign Affairs
Section 121. The United States, in this section, recognizes the
capacity of the FAS to conduct foreign affairs in their own name
and right. This includes the capacity to enter into treaties and
other international,agreements with other governments or interna-
tional organizations, as appropriate. This recognition of foreign
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affairs capacity by the United States acknowledges the interna-
tional legal personalities of the FAS. Thus, for example, while
the United States will provide certain services under the Compact,
these activities will take place on a government-to-government
basis through an international agreement and the exercise by the
FAS of foreign affairs authority, rather than by the direct
extension of U.S. domestic programs as was done during the
Trusteeship pursuant to Article 3 of the Trusteeship Agreement.
The FAS agree in this section to conduct their affairs of
state in accordance with international law and settle disputes by
peaceful means.
Section 122. In this section, the United States agrees to support
FAS participation and membership in regional and international
organizations as may be mutually agreed from time to time.
This section also obligates the United States to accept
qualified FAS citizens for training in the Foreign Service
Institute. This program will contribute to FAS capabilities to
meet the demands of their new political status and promote
intergovernmental cooperation between the FAS and the United
States.
Section 123. In this section, the FAS agree to consult with the
United States in foreign affairs matters in recognition of the
authority and responsibility of the United States under Title
Three.
This section also provides that the United States will
consult with the FAS on foreign affairs matters which relate to or
affect the FAS. This arrangement reflects reciprocal obligations
of the parties for consultation, given the overall allocation of
authority and responsiblity under the Compact.
Section 124. This section authorizes the United States, upon
request, to assist the FAS in foreign affairs matters, and
includes a disclaimer of responsiblity for actions of the FAS
taken with the assistance or through the agency of the United
Statees Government.
Section 125. This section is a disclaimer by the United States of
responsiblity for FAS actions in their exercise of their foreign
affairs capacity.
Section 126. Under this section, the United States will provide,
upon request, consular services to FAS citizens abroad as if they
were United States citizens.
Section 127. This section provides for termination of all
obligations, responsiblities, rights and benefits of the United
States under any treaty made applicable to the Trust Territory
during the Trusteeship. The continued application of such
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treaties to the FAS will be determined in accordance with
international law, and will thus depend upon the relations between
the FAS and other signatories of such agreements. However, under
Title III and the separate agreements concluded pursuant thereto,
defense treaties and international security agreements will
continue in force.
Article III, Communication
Section 131. This section recognizes FAS authority and responsi-
bility to control domestic and foreign communications, and enables
the United States to represent the FAS before the International
Telecommunications Union with respect to frequency registration
and broadcast scheduling until the FAS choose to undertake that
function themselves. This section also extends Federal Communica-
tions Commission jurisdiction to the FAS as regards the operations
of satellite earth terminal stations operated by U.S. common
carriers. Under this arrangement, the details of which are set
forth in separate agreements, the FAS will be included in the
United States telecommunications system for rate-making and other
operational aspects relating to United States common carriers.
Section 132. This section ensures United States ability to
operate telecommunications systems in the FAS in connection with
its obligations under the Compact.
Article-IV, Immigration
Section 141. This section effectively exempts FAS citizens
meeting specified criteria from certain United States visa and
work permit requirements and enables FAS citizens to enter,
reside, be employed, attend school or remain as visitors in the
United States. Section 141 also recognizes the ability of the
United States Congress to promulgate, or authorize the legisla-
tures of United States territories to promulgate, non-discri-
minatory immigration laws or regulations applicable to FAS
citizens who wish to establish "habitual residence" in those U.S.
territories. Habitual residence is defined as establishment of a
place of general abode or principal, actual dwelling place of a
continuing or lasting nature and of at least one year duration.
Finally, Section 141 does not confer or deny the right of FAS
citizens to establish residency necessary for naturalization or
entitlement to benefits for alien relatives.
Section 142. FAS reciprocity for the open immigration arrangement
provided under Section 141 is set forth in this section, under
which United States citizens will be able to enter, reside and be
employed in the FAS, subject only to FAS law providing for exclu-
sion of undesirable aliens. Establishment of "habitual residence"
in the FAS by United States citizens would also be subject to FAS
law.
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Section 143. The privileges set forth in Sections 141 and 142
will be lost to a citizen of an FAS or the United States who takes
an affirmative step to preserve or acquire a citizenship or
nationality other than that of an FAS or the United States or
fails to renounce such an existing citizenship or nationality
within two years after the effective date of the Compact. Section
143 does not deny the privileges conferred by Sections 141 and 142
where citizenship is held in both an FAS and the United States or
in more than one FAS.
Section 144. This section enables United States citizens to enter
and remain in FAS government service without losing their U.S.
citizenship.
Article V, Representation
Section 151-152. These sections provide for the establishment of
resident representatives in the capitals of the United States and
the FAS. Designated representatives are entitled to limited or
functional immunity, exemptions and privileges in connection with
the performance of official duties.
Section 153. This section exempts United States citizens who are
employed by or represent an FAS from the provision of the Foreign
Agents Registration Act and the Logan Act.
Article-VI, Environmental Protection
Sections 161-163. The sections within this article establish a
regulatory structure for United States governmental activities in
the FAS. The United States agrees that it will adhere to the
National Environmental Policy Act in its activities in the FAS,
and that it will also comply with standards substantively similar
to those required by other specified United States environmental
laws. The United States and the FAS agree to develop additional
environmental protection standards suited to unique conditions in
the FAS. Under this structure, the FAS governments, but not
individual citizens, will be able to seek judicial review of
United States compliance in designated federal courts. Finally,
as a reciprocal obligation the FAS agree to develop and enforce
substantively similar standards for environmental protection with
respect to its activities which are substantively similar to
United States activities. The President of the United States may,
after appropriate consultations in the FAS, exempt federal
agencies from compliance where such exemption is determined to be
in the "paramount interest" of the United States, consistent with
Title Three of the Compact and the obligations of the Government
of the United States under international law.
This article was negotiated to address a fundamental FAS
concern about preservation of the fragile ecology of their islands
and their resultant desire that a commitment to adhere to the high
standards of environmental care and protection embodied in United
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States law be articulated in the Compact.
Article VII, General Legal Provisions
Section 171. This section terminates the application to the FAS
of any laws of the United States made applicable to the Trust
Territory of the Pacific Islands or any part thereof pursuant to
the Trusteeship Agremeent, unless they are specifically made
applicable by the Compact.
Section 172. This section provides that citizens of the FAS not
residing in the United States shall be entitled to the same rights
and privileges as any other non-resident aliens and that they
shall be treated as "persons" within the meaning of the Administra-
tive Procedures Act and of the Freedom of Information Act. A
United States citizen who becomes a citizen of an FAS and who does
not renounce his United States citizenship would retain his United
States citizenship and continue to be entitled to the same rights
and privileges as any other United States citizen.
Section 173. The United States and the FAS undertake positive
obligations to protect the programs, personnel, property and
facilities of the other which are connected with public and
official functions specified in the Compact or its related
agreements.
Section 174. Subsections (a) and (d), taken together, provide
that the FAS governments will be immune from jurisdiction of the
courts of the United States, and vice versa, except when the
defendant government is sued in connection with commercial
activities, personal injury, death or damage to or loss of
property.
Subsections (b) and (c) of this section set forth the
procedure for payment of claims against the Trust Territory
Government or the United States arising from acts or omissions of
either such government prior to the effective date of the Compact.
All unpaid judgments against the Trust Territory Government or the
United States entered prior to the effective date of the Compact,
or settlements reached, will be paid by the United States. All
claims against the Trust Territory or United States which are not
resolved prior to the effective date of the Compact or which arise
afterwards, will be adjudicated in the courts of the FAS, but any
judgment of those courts will be presented for certification to
the United States Court of Appeals for the Federal Circuit which
shall order payment of such judgment, unless it is manifestly
erroneous in law or fact, or is manifestly excessive. In this
latter situation, that court shall have jurisdiction to modify the
judgment.
Section 175. This section provides for the negotiation of
separate agreements regarding extradition, mutual assistance in
law enforcement and transfer of prisoners. These agreements shall
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have the force of law and shall be similar to arrangements which
the United States has with other nations.
Section 176. This section preserves the decisional law estab-
lished in civil litigation during the Trusteeship by the courts of
the Trust Territory, subject to the power of the courts of the FAS
derived from their respective constitutions to modify judgments in
appropriate cases.
Section 177. In this section, the United States accepts
responsibliity for compensation owing to citizens of the FAS for
loss or damage to person and property resulting from the nuclear
testing program conducted by the United States in the Northern
Marshall Islands between 1946 and 1958. This section also
provides that the United States Government and the Government of
the Marshall Islnads shall set forth in a separate agreement
provisions for a full and complete settlement of all uncompensated
claims which have arisen as to the Marshall Islands and its
citizens. The separate agreement is also to contain agreed
provisions for medical services and radiological monitoring as
well as utilization of affected lands. This agreement has been
concluded, is incorporated into the Compact, and provides for the
establishment of a $150 million fund to finance the purposes of
this agreement. This agreement settles all Marshall Islands
claims arising from the nuclear testing program.
Section 178. This section enables federal agencies providing
services and programs in the FAS to settle and pay tort claims
arising from their activities in the FAS pursuant to the admini-
strative procedures set forth at 28 U.S.C. 2672. Claims not
resolved through that procedure will be referred to arbitration
under the conference and dispute resolution process set forth in
Title Four, Article II, of the Compact, and paid in accordance
with the arbitration award payment provisions of 31 U.S.C. 1304.
The United States will be immune from suits based on claims
arising under the provisions of this section.
TITLE TWO
ECONOMIC RELATIONS
(The chart attached at Appendix A displays the amounts and
schedule for payment of grant funding and assistance set forth in
the Compact and discussed in the following analysis.)
Article I, Grant Assistance
Section 211. This section sets forth the basic grant assistance
constituting the economic foundation of free association. The
fundamental concept underlying the grant assistance is that the
FAS will be provided with the resources to implement development
programs and provide public services appropriate to conditions and
needs as determined by the FAS. A capital account and a current
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account will be established from grant funds, to be used for
economic development and government operations, repectively.
In order to enable the FAS to undertake economic development
programs at the outset of the initial fifteen year term of free
association, the grant assistance package was structured to
provide maximum "front-end loading" of grant funding, while at the
same time spreading out funding levels over the entire fifteen-
year period to ensure that minimum needs can be satisfied and that
economic stability can be preserved throughout the initial period
of free association. Thus, at the fifth and again at the tenth
anniversary of the effective date of the Compact, the amounts of
grants will be reduced from the higher levels provided during the
first five years.
This section also calls for each of the FAS to establish
official development plans and each FAS agrees that during the
term of the Compact an average of no less than 40 percent of
designated grant funding will have been dedicated to capital
account activities as set forth specifically in the plans. This
section recognizes that achievement of the goals of the economic
development plans may be affected by the impact of exceptional,
economically adverse circumstances. Each FAS is to report
annually to the President and the Congress on the implementation
of the plans and the use of grant money.
Section 212. The section provides for fourteen annual payments to
the FSM, commencing on the first anniversary of free association,
for development, which may be used to pay certain account
expenditures for the operations of United States military Civic
Action Teams made available to the FSM under Section 227.
Section 213. This section provides that the specified scheduled
amounts provided therein to the Governments of the Marshall
Islands and the Federated States of Micronesia shall be used by
them to offset the impact of any United States military activities
conducted pursuant to Section 321(a) and its separate agreements.
Section 214. This section provides for fourteen annual payments,
commencing on the first anniversary of free association, for
energy production in the FAS. These grants are provided with the
goal of increasing FAS energy self-sufficiency.
Section 215. This section provides annual grants in support of
current account communications operations and for other current or
capital account activities which may include purchase of communica-
tions facilities and equipment now located in the Trust Territory,
including the new COMSAT earth stations.
Section 216. This section provides annual grants for maritime
zone surveillance and enforcement, medical referral transportation
and other health services, and post-secondary educational scholar-
ship programs. This funding is augmented by a United States
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"start-up" contribution for surveillance, and is to be divided
among the FAS as agreed among those governments.
Section 217. This section provides for an annual adjustment of
the grants provided under Sections 211, 212, 214, 215 and 231
(including Sections 212, 213 and 216 funds as referenced therein)
by two-thirds of the percentage annual change in the United States
Gross National Product Implicit Price Deflator, or seven percent,
whichever is less.
Section 218. This section provides that grant funds appropriated
for any year will survive beyond the expiration of that year and
remain available for expenditure without reducing subsequent grant
payments.
Section 219. This section provides that unobligated Trust
Territory Government funds will remain available to the FAS Govern-
ments according to the purposes of the act appropriating such
funds.
Article II, Program Assistance
Section 221. While the FAS will fund the basic functions of
government from grant assistance and FAS revenues, performance of
certain activities may be beyond the capability of the new
governments at the outset of free association. Thus, the United
States has agreed in Section 221(a) to continue to provide
services of the United States Weather Service, the United States
Federal Emergency Management Agency, the United States Postal
Service, the Federal Aviation Administration and the Civil
Aeronautics Board. Enactment of Section 221(a) by Congress
provides the legislative authority for provision of these
services. The specific arangements for provisions of these
services are set forth in a separate agreement. The United States
commitment is expressly limited to continuation of the essential
services specified at levels equivalent to the last year prior to
the effective date of the Compact. This will establish a ceiling
on the nature and extent of United States programs.
Subsection (b) provides a $10 million annual grant to be
shared by the FAS as follows: Marshall Islands $3 million; and
FSM $7 million. This grant funding, coupled with the scholarship
and health service funding set forth in Section 216, will enable
the FAS to augment current account expenditures in the field of
education and health services and tailor such activities as
scholarship programs and medical referral activities to FAS needs.
Subsection (c) provides that alternate energy development
programs which were extended to the Trust Territory will continue
after the effective date of the Compact and be available to the
FAS subject to the terms set forth in United States law with
respect to the scope and duration of such programs.
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Subsection (d) defines United States authority incident to
implementing program assistance.
Section 222. This section acknowledges that continuing consulta-
tion may be called for in order to ensure that the federal
services provided under Section 221(a) are appropriate to the
evolving developmental needs of the FAS.
Section 223. This section ensures that those Trust Territory
students embarked upon a post-secondary course of study relying
upon a particular United States assistance program, e.g. the Basic
Educational Opportunity Grant, will be able to continue to receive
such assistance for the duration of the individual academic
programs up to four years following the effective date of the
Compact.
Section 224. This section provides that the United States and the
FAS may agree on the extension of federal programs, assistance, or
services to the FAS in addition to those specified in the Compact.
While the grant assistance and services provided by Title Two
constitute a comprehensive negotiated package, this section
enables the United States and the FAS to adjust to changing
conditions and needs by establishing such additional programs as
may be authorized by United States law.
Section 225. In order to enable the United States to fulfill its
commitment to provide programs and services in support of FAS
development efforts, the FAS will be obligated under this section
to provide at no cost land required for federal agency activities,
and to allow agencies already present in the Trust Territory to
continue use of existing facilities at no cost, or make mutually
agreeable alternative arrangements.
Section 226. Under this section, United States Government
agencies which have statutory authority to provide technical
assistance on an intergovernmental or international basis, or to
territories or possessions of the United States, will be able to
provide such technical assistance to the FAS upon request. In
light of the free association relationship, FAS requests for
technical assistance will be given priority consideration over
requests of other nations eligible for such assistance.
Section 227. This section provides that United States military
Civic Action Teams (CAT) will be provided to the Federated States
of Micronesia under the terms set forth in a separate agreement
which, among other things, defines FSM obligations to provide
land, building materials and other support for CAT projects.
Article III, Administrative Provisions
Section 231. This section provides for negotiations commencing on
the thirteenth anniversary of the Compact regarding the future
political relationship between the United States and the Marshall
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If these negotiations are not concluded by the fifteenth
anniversary, all of the provisions of the Compact, including U.S.
defense rights under Title Three, will remain in effect for an
additional two years and continue to be implemented according to
their original terms. However, the United States will provide the
average of annual amounts of the assistance which had been
provided during the initial fifteen year period under Sections 211
(grant assistance); 212 (FSM Civic Action Teams funding); 213
(United States payments for military operating rights in FAS); 214
(FAS energy production funds); 215 (communications grants); and
216 (FAS marine surveillance, medical service and scholarship
funding). The inflation adjustment provided under Section 217
will apply to these averaged annual amounts (excluding Sections
212, 213 and 216 funding). This continuation of support during
the sixteenth and seventeenth years will ensure the preservation
of the economic stability of the FAS and United States defense
rights while the United States and the state concerned negotiate a
continuation of free association or a different political relation-
ship. Free association will not terminate automatically, but may
be terminated by unilateral action of any signatory or mutual
agreement between the United States and any or all of the FAS.
Section 232. This section provides that the program assistance to
be made available under Section 221 be defined in separate agree-
ments. The levels and duration of such assistance, and the legal
parameters within which federal agencies will operate -- including
the legal status of their employees, payment of claims, entry and
departure of employees and other similar matters -- are dealt with
in the comprehensive agreement negotiated pursuant to this
section. Under that agreement, federal agency civilian employees
will enjoy certain privileges, exemptions and limited immunity
from FAS laws, including tax laws, and federal agencies are
assured the operational freedom necessary to carry out their
responsibilities.
Section 233. This section authorizes the United States to conduct
audits of grant and program assistance provided to the FAS under
Articles I and II of Title Two. These audits will enable the
United States to determine if the FAS have met the requirements
set forth in the Compact and its separate agreements regarding the
purposes for which funds and program assistance are to be used and
the propriety of their financial transactions. The procedures for
conduct of the audits will be the subject of consultation to
ensure that institutional integrity is preserved, and that the
United States will have full access to financial information
relating to Compact funding. The procedures for conducting the
audit and obtaining annual reports and other financial information
as required by the Compact are the subject of a separate agreement
on fiscal procedures between the United States and the FAS.
Section 234. This'section provides for the transfer to the FAS at
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no cost United States property located in the Trust Territory for
which there is no continuing U.S. need. This transfer process is
largely complete. Transfer of federal property began in the Trust
Territory in 1980, pursuant to Section 402 of United States Public
Law 96-597.
Section 235. During the Trusteeship, trust funds have been
established for the benefit of various groups of Trust Territory
citizens, such as those affected by the United States nuclear
testing programs in the Marshall Islands. This section provides
for appointment by the United States of a new trustee to replace
the High Commissioner as trustee of such funds, so that the
initial legislative intent in creating the funds can be carried
out. The United States also agrees to carry out such functions of
government formerly exercised by the High Commissioner as are
necessary to implement the provisions of a particular trust. For
instance, the High Commissioner is currently required to make
certain determinations and exercise certain administrative
functions in connection with trust funds. Under the Compact, this
will now be undertaken by the United States.
Section 236. This section pledges the full faith and credit of
the United States for payment of the amounts provided for under
Articles I and III of Title Two. A similar pledge is contained in
the Covenant to Establish a Commonwealth of the Northern Mariana
Islands in Political Union with the United States. This pledge is
intended to create an enforceable obligation of the United States
to pay the amounts provided for in Articles I and III. While this
obligation will be discharged in the same manner as other
financial obligations incurred through international agreements
requiring an act of appropriation, the FAS are provided with a
judicial remedy before the United States Claims Court in the event
payments owing under the Compact are not made. Because the
Compact will be both an international agreement and public law,
this is a valid grant of jurisdiction which makes an express
exception for the FAS from the restriction contained in 28 U.S.C.
1502 relating to actions arising from treaties with foreign
nations. Any judgments resulting from an action by the FAS under
this section would be paid under 31 U.S.C. 1304.
Article IV, Trade
Section 241-243. These sections provide that the FAS will not be
within the customs territory of the United States, and will be
able to export products to the United States duty free, provided
that less than 70% of the products' value derives from foreign
sources. This is the same treatment which United States insular
possessions receive under General Headnote 3(a) of the United
States Tariff Schedule. Articles not covered by General Headnote
(3) will be entitled to most favored treatment.
Article V, Finance and Taxation
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Section 251. This section establishes United States currency as
the legal tender of the FAS, but gives each FAS the option to
issue its own currency; in which case appropriate transitional
arrangements would be agreed upon.
Section 252. This section recognizes the jurisdiction of the FAS
to tax any United States persons income which is derived from FAS
sources, and applies United States tax laws to determine income
source.
Section 253. All FAS citizens domiciled in the FAS will be exempt
from United States income tax on fixed and determinable income and
inheritance and gift taxes. It is intended that questions of
citizenship and domicile for individual persons in the FAS will be
determined under the laws of the respective FAS (See Section
142(a) of the Compact).
Section 254. Persons who reside in the FAS will not have to pay
any otherwise applicable United States tax on income which is
taxed by the FAS, even where such income is derived from sources
outside the FAS.
Section 255. While Sections 253 and 254 are intended to provide
incentives for immigration to and investmennt in the FAS for
individuals, this Section provides tax incentives for investments
primarily by corporations. The tax incentives provided are those
long-standing provisions of the United States Internal Revenue
Code applicable to possessions of the United States that were
designed, like the tax provisions of the Compact, to generate
United States investment in developing areas that enjoy a special
relationship with the United States. These incentives, as in
effect on January 1, 1980, will apply to the FAS to the extent not
in conflict with Compact Sections 253 and 254. If the provisions
of the Internal Revenue Code applicable to the FAS under this
Section are amended after January 1, 1980, the prior law will
continue to apply for two years after the effective date of such
amendment while alternative but equivalently beneficial tax
arrangements are negotiated.
TITLE THREE
SECURITY AND DEFENSE RELATIONS
Article I, Authority and Responsibility
Section 311. This section establishes as part of the free
association relationship defined in the Compact the full authority
and responsibility of the United States for security and defense
matters in or relating to the Marshall Islands and the Federated
States of Micronesia. This United States authority and responsi-
blity includes the foreclosure of any third country access to the
FAS for military purposes, and the ability to establish military
facilities and thee exercise of military operating rights in
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accordance with separate agreements authorized by this section.
Of fundamental significance is the undertaking of the United
States during the free association relationship to defend the FAS
and their citizens as the United States and its citizens are
defended.
Section 312. This section gives the United States the right to
conduct military operations and activities in the FAS necessary
for the exercise of its authority and responsiblity for security
and defense matters under the Compact. Such operations and
activities are to be undertaken in accordance with separate
agreements on military use and operating rights and status of
forces.
Section 313. To ensure that the actions of the FAS governments do
not impair the ability of the United States to exercise its
authority and fulfill its responsiblity in security and defense
matters, the FAS agree in this section to refrain from actions
which the United States determines to be incompatible with the
United States security and defense role defined in the Compact.
The purpose of this provision is to preserve the allocation of
authority and responsiblity for domestic and foreign affairs to
the FAS, and for security and defense to the United States.
To ensure that any U.S. determination requiring the FAS to
refrain from a particular action is made on the basis of full
information, the United States will consult with the FAS prior to
making any final determination. The FAS are entitled to raise
with the Secretaries of State and Defense, personally and on an
expeditious basis, any concerns which might arise for a United
States action under this provision.
Section 314. This section provides that unless otherwise agreed
the United States will not test by detonation, dispose or dis-
charge within the FAS certain harmful substances or weapons, and
will not store substances intended for use in such weapons except
in the event of war declared by Congress, a national emergency
declared by the President or to defend against actual or impending
attack.
This section requires any storage by the United States of
substances or materials referenced in this section in the FAS to
be in a manner consistent with applicable international guidelines
to which the United States adheres, as well as applicable United
States laws, in order to protect public health and safety in the
FAS.
Section 315. This section enables the United States to permit
third countries to have access to United States military areas and
facilities in the FAS. Except in the case of transit and over-
flight, the United States is required to consult with the FAS on
third country access, and in the case of major units to obtain
approval.
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Section 316. This section prohibits assignment or transfer of
United States authority and responsibility for security and
defense of the FAS to another country.
Article II, Defense Facilities and Operating Rights
Section 321. This section provides for separate agreements to be
concluded between the United States and the FAS for the
establishment and use of military areas and faciltiies of the
United States in the FAS in connection with United States security
and defense authority and responsibility. This section also sets
forth the framework for agreement between the United States and
the FAS for additional military areas and facilities should they
be required in the future, and acknowledges that the United States
will seek minimum areas necessary to carry out its security and
defense responsiblities.
Section 322. In connection with its security and defense
activities, the United States will provide and maintain certain
fixed and floating aids to navigation in the FAS. This activity
will also promote civilian shipping in the islands, which will
continue to benefit from U.S. Coast Guard assistance with
navigational aids.
Section 323. Pursuant to this section, the United States and the
FAS have 'concluded comprehensive agreements on military use and
operating rights (MUORA) and status of forces (SOFA). These
agreements are modeled on similar arrangements the United States
has entered into with other countries. Bilateral MUORAs have been
concluded with each of the member states of the FAS addressing the
specific needs and requirements of the United States in each of
these states. The MUORAs make available to the United States
certain defense sites and facilities for its use in the FAS and
detail the operating rights that may be exercised in the use of
such areas.
The SOFA is a multilateral agreement which defines the rights
and obligations of United States Armed Forces and their personnel
in the FAS. Specifically, the SOFA defines the personnel afforded
the protections under the SOFA and addresses such issues as entry
and exit requirements, use of contractors and employment of labor,
tax and customs relief, criminal jurisdiction, applicability of
local law, payment of claims, medical and postal services,
telecommunications, and other related matters.
Article III, Defense Treaties and International Security
Agreements
Section 331. In keeping with United States responsiblity and
authority for security and defense matters in the FAS, this
section provides that security and defense agreements or treaties
to which the United States is a party, and which have applied to
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the Trust Territory during the Trusteeship, will continue in force
and be applied by the United States in the exercise of its
security and defense role in the FAS. In addition, the United
States retains the authority to extend to the FAS any security or
defense agreements or treaties it may determine to be applicable,
after appropriate consultation with the FAS governments. This
arrangement is necessary in light of United States treaty
obligations in the region.
Article IV, Service in the Armed Forces
Section 341 and 342. FAS citizens will be entitled under these
sections to serve voluntarily in the armed forces of the United
States, but cannot involuntarily be inducted into such service
unless habitual residence in the United States is established. In
addition, upon nomination by their governments and qualification,
FAS citizens will be enrolled in the United States Coast Guard
Academy and in the United States Merchant Marine Academy. The
service and training available in the armed forces and the
designated academies will provide educational opportunities not
available in the FAS.
Article V, General Provisions
Section 351. Under this section, two bilateral Joint Committees
are established for the purpose of resolving disputes arising from
implementation of Title Three and the separate agreements
concluded pursuant to sections within Title Three. The senior
United States military commander in the Pacific will represent the
United States on each committee, and the FAS will designate
appropriate senior officials as representatives. The purpose of
the Joint Committee is to provide a forum for consultation
regarding issues related to Title Three. Any matter which the
Committee cannot resolve is referred back to the governments
concerned for resolution. The FAS concerned may also raise the
matter with the Secretary of Defense, if desired. It is
contemplated that the Joint Committee system will enable the FAS
and the United States to consult, and by consensus resolve
problems arising under Title Three.
Section 352. This section contains a U.S. assurance that in
fulfilling its security and defense role, and in making the
specific determinations incident to its authority under Title
Three of the Compact, the United States will accord due respect to
the authority and responbility as defined in the Compact.
Section 353. This section addresses FAS concerns arising in large
part from the experience of World War II. Under this provision,
the United States agrees not to include the FAS in a formal
declaration of war without the consent of their governments.
In the absence of FAS consent to be named as parties in a
declaration of war, this section preserves claims of FAS citizens
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arising from armed conflict incident to belligerence or war.
Claims will be preserved under this provision which are in the
form of petitions for redress to the Government of the United
States, and in the case of third countries all types of claims
will be unimpaired by this section. Where FAS citizens petition
the United States for redress under this section, their claims
will be treated as if they were the claims of United States
citizens.
Section 354. Under subsection (a) of this section, the provisions
of Title Three will survive and apply for a period of fifteen
years in the Marshall Islands and the FSM, even if the Compact is
unilaterally terminated earlier by any signatory government. In
other words, the security and defense relationship established by
Title Three will continue as agreed upon even if the political
relationship of free association is terminated. Only by mutual
agreement to terminate or amend Title Three can the security and
defense relationship be altered.
In conjunction with Articles IV and V of Title Four (which
provide for continuation of certain Compact sections, including
economic assistance, in the event of Compact termination),
subsection (a) represents United States and FAS agreement that
their mutual interests will be served by maintaining, for an
agreed minimum period, the security, defense and economic sta-
bility provided for in the Compact even if the free association
relationship is terminated.
Subsection (b) provides that even if Title Three were to
expire or be terminated, the United States will provide protection
to the Marshall Islands or the Federated States of Micronesia for
the period in which separate agreements concluded pursuant to
Sections 321 and 323 are in effect. Under those separate agree-
ments, the military use and operating rights of the United States
(except those with the FSM) as well as U.S. authority to deny
third country military access, have a duration which exceeds the
initial term of the Compact (see analysis of Section 454) and the
defense guarantee by the United States set forth in this provision
will continue, consequently, for those longer periods. That
United States commitment requires that a threat to the peace and
security of the Marshall Islands or the Federated States of
Micronesia be treated as a threat to the peace and security of the
entire region and a danger to the United States. In the face of
such a threat, the United States would take action to meet that
danger in accordance with its constitutional processes.
TITLE FOUR
GENERAL PROVISIONS
Article I, Approval and Effective Date
Sections 411-412. Under these sections there is established a
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four-step process for approval and entry into force of the Com-
pact. This process includes approval by the FAS governments in
accordance with their constitutional processes and approval of the
Compact by the peoples of the Marshall Islands and the Federated
States of Micronesia. The procedure for popular approval is set
forth in Section 412, which calls for a plebiscite on future
political status constituting a free and informed act of
self-determination.
The approval process also requires approval of the Compact by
the United States, and agreement between the United States and the
governments concerned on its effective date. Once so approved,
the United States, as administering authority of the Trusteeship,
will make appropriate arrangements for termination of the
Trusteeship Agreement with the United States.
Article II, Conference and Dispute Resolution
Section 421-424. These sections establish the method for settle-
ment of disputes arising in connection with the implementation and
enforcement of the provisions of the Compact except for matters
arising out of Title Three, which will be handled as provided for
in Section 351. The procedure for dispute resolution requires
that upon notification of a dispute, the parties confer on the
matter. After a 90-day period, if the issue has not been
resolved, the matter is referred to a three-person Arbitration
Board consisting of one member appointed by each of the parties
and a chairman jointly appointed by the parties or selected by lot
from standing lists if mutual agreement cannot be reached.
Decisions will be by majority vote and shall be binding on the
parties unless it is agreed that the decision shall be advisory.
The Board will also not have jurisdiction in matters arising under
the environmental protection provisions of Article VI, Title One,
and the general legal provisions of Article VII, Title One.
Article III, Amendment
Sections 431-432. These sections provide for bilateral and multi-
lateral amendment of the Compact by mutual agreement of the
parties affected by such amendments.
Article IV, Termination
Sections 441-443. The Compact provides three avenues for its
termination. Under Section 441, the Compact may be terminated by
mutual agreement of the United States and one, or all, of the FAS.
Section 441 requires United States and FAS approval of the terms
and conditions of termination, and contemplates termination only
if the United States and the FAS are fully satisfied with the
post-termination arrangements.
Section 442 provides for unilateral termination initiated by
the United States,'in which case prior notice of no less than six
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months is required before termination is effective.
Termination by unilateral action of the FAS is provided for
in Section 443, which requires an FAS government which intends to
terminate to conduct a plebiscite on termination in accordance
with its constitutional processes. A majority vote in favor of
termination is required for termination to occur. The plebiscite
can be conducted only upon three months' prior notice to the
United States, and termination pursuant to an affirmative vote to
end the agreement would not become effective until at least three
months after certification of the results to the United States and
notification that termination will occur.
Article V, Survivability
Sections 451-453. These sections identify which portions of the
Compact would survive, and for how long, under the different
termination procedures described in Article IV of Title Four.
Should the Compact be terminated by mutual agreement pursuant
to Section 441, the continuation of economic relations between the
United States and the FAS would be as mutually agreed.
Should termination occur at United States initiative under
Section 442, provisions of the Compact relating to the following
subjects would remain in effect until the fifteenth anniversary of
the effective date of the Compact, or longer if mutually agreed:
immigration, environmental protection, legal relations, the
nuclear claims settlement with the Marshall Islands, grant assis-
tance, audits, security and defense relations, dispute resolution,
amendment, survivability and definitions of terms. In addition,
the United States would continue to provide all grant assistance
and either the Federal programs and services specified in Article
II of Title Two, or their equivalent in funds -- as determined by
the U.S. -- until the fifteenth anniversary of the effective date
of the Compact.
Should termination result from unilateral FAS action under
Section 443, provisions of the Compact relating to the following
subjects would remain in effect until the fifteenth anniversary of
the effective date of the Compact, or longer if mutually agreed:
immigration, environmental protection, legal relations, the
nuclear claims settlement with the Marshall Islands, security and
defense relations and dispute resolution. In addition, the United
States would consult with the FAS terminating the Compact to deter-
mine what economic assistance the United States would provide,
after termination, until the fifteenth anniversary of the effec-
tive date of the Compact with the proviso that the grant assis-
tance provided in Sections 211, 212(b), 214, 215 -- as adjusted
pursuant to Section 217 -- and 216 would continue without
diminution.
Section 454. Under subsection (a) of this section, the united
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States acknowledges its interest in promoting the long-term
economic advancement and self-sufficiency of the peoples of the
Marshall Islands and the Federated States of Micronesia.
Subsection (b) of this section provides that the separate
agreements concluded pursuant to Article II of Title Three will
remain in effect according to their terms notwithstanding termin-
ation of the Compact or the application of any other provision of
the Compact. This provision will continue the SOFA and the
following agreements in effect for these terms:
- Marshall Islands:
-- Military Use and Operating Rights -- up to thirty
-- Mutual Security -- until terminated or otherwise
amended by mutual agreement.
- Federated States of Micronesia:
-- Military Use and Operating Rights -- fifteen years.
-- Mutual Security -- until terminated or otherwise
amended by mutual agreement.
Section 454 also preserves, for the duration of the military
use and operating rights agreements, the grant assistance obliga-
tions contained in Section 213, which relate to payments to offset
the impact of U.S. defense activities in the FAS.
Article VI, Definition of Terms
Sections 461-462. These sections define various terms used in the
Compact, and list the separate agreements concluded pursuant to
the Compact.
Section 463. This section incorporates by references certain
United States statutes, differentiating between those laws which,
for purposes of the Compact, will remain as they were on January
1, 1980, and those which will change consistent with amendments of
a general nature enacted thereafter.
Article VII, Concluding Provisions
Section 471. Under this section, all signatory governments agree
that they are authorized by their constitutions and laws to enter
into and implement the Compact and its related agreements. This
section also provides that the FAS will conform their laws to the
Compact prior to its effective date, so that they will be able to
implement the Compact in a manner consistent with their domestic
laws. Finally, in fulfillment of the obligation of the Government
of the United States under paragraph (b) of this section to ensure
that its laws conform with the provisions of the Compact,
paragraph (c) of this section provides that the Compact will have
the force and effect of a statute under the laws of the United
States.
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-20-
Section 472. This section provides for acceptance of the Compact
by the signature of each government party to the agreement.
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Current Account
Capital Account
Kwajalein Impact
FEDERATED STATES
OF MICRONESIA
Current Account
Capital Account
Program Grants
Sec. 177(b)
Sec. 213(b)
Sec. 216
Sec. 221(b)
Federal Services
Sec. 122
Sec. 223
Sec. 232
COMPACT OF FREE ASSOCIATION
United States economic assistance to the Marshall Islands and the Federated States of Micronesia
18.90 17.90 17.90 17.90 17.90 15.60 15.68 15.60 15.60 15.60 13.80 13.80 13..80 13.80 13.80 237.50
10.50 10.50 10.50 10.50 10.50 8.80 8.80 8.80 8.80 8.80 7.60 7.60 7.60 7.60 7.60 134.50
1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 28.50
42.60 39.60 39.60 39.60 39.60 34.60 34%60 34.60 34.60 34.60 27.60 27.60 27.60 27.60 27.60 512.00
24.00 25.00 28.00 25.00 25.00 21.00 21.00 21.00 21.00 21.00 17.00 17.00 17.00 17.00 17.00 314.00
66.60 64.60 64.60 64.60 64.60 55:60 55.60 55.60 55.60 55.60 44.60 44.60 44.60 44.60 44.60 R26.00
IS0.00 150.00
0.16 0.16
6.70 5.37 5.37 5.37 5.37 5.37 5.37 5.37 5.37 5.37 5.37 5.37 5.37 5.37 5.37 81.87
10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 150.00
0.28 0.28 0.28 ' 0.28 0.28 0.26 0.28 0.28 0.28 0.28 0.28 0.28 0.28 0.28 0.24 4.26
8.30 6.30 4.88 2.46 21.94
8.90 10.10 11.30 12.60 13.60 14.90 16.10 17.60 18.90 20.20 21.40 22.70 23.90 25.20 26.50 263.90
282.25 126.95 126.73 125.61 124.15 112.45 113.65 115.15 116.45 117.75 104.95 106.25 107.45 108.75 110.05 1898.63
Current Account and Capital Account amounts will be adjusted for inflation using the formula set
forth in Compact Section 217.
Funding provided by Compact Sections 122, 177, 221, 223, and 232 is not subject to the full faith
and credit provisions of Compact Section 236.
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H. J. Resolution S. J. Resolution
In the House of Representatives In the United States Senate
JOINT RESOLUTION
To approve the "Compact of Free Association", and for other
purposes.
Whereas the United States is the administering authority of
the Trust Territory of the Pacific Islands under the terms of the
Trusteeship Agreement for the former Japanese Mandated Islands
entered into by the United States with the Security Council of the
United Nations on April 2, 1947, and approved by the United States
on July 18, 1947; and
Whereas the United States, in accordance with the Trusteeship
Agreement, the Charter of the United Nations and the objectives of
the international Trusteeship system, has promoted the development
of the peoples of the Trust Territory toward self-government or
independence as appropriate to the particular circumstances of the
Trust Territory and its peoples and the freely expressed wishes of
the peoples concerned; and
Whereas the United States, in response to the desires of the
peoples of the Federated States of Micronesia and the Marshall
Islands expressed through their freely-elected representatives and
by the official pronouncements and enactments of their lawfully
constituted governments, and in consideration of its own obliga-
tions under the Trusteeship Agreement to promote self-deter-
mination, entered into political status negotiations with repre-
sentatives of the peoples of the Federated States of Micronesia,
and the Marshall Islands; and
Whereas these negotiations resulted in the "Compact of Free
Association" which, together with its related agreements, was
signed by the United States and by the the Federated States of
Micronesia and the Republic of the Marshall Islands on October 1,
1982 and June 25, 1983, respectively; and
Whereas the Compact of Free Association was approved by
majorities of the peoples of the Federated States of Micronesia
and the Marshall Islands in United Nations-observed plebiscites
conducted on June 21, 1983 and September 7, 1983, respectively;
and
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Whereas the Compact of Free Association has been approved by
the Governments of the Federated States of Micronesia and the
Marshall Islands in accordance with their respective consti-
tutional processes, thus completing fully for the Federated States
of Micronesia and the Marshall Islands their domestic approval
processes with respect to the Compact as contemplated in Compact
Section 411: Now be it
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That the Compact
of Free Association, the text of which follows, is hereby approved
with respect to the Federated States of Micronesia and the
Marshall Islands and that the President is authorized to agree to
an effective date for and thereafter to implement the Compact of
Free Association in accordance with the terms of this approval,
having taken into account any procedures with respect to the
United Nations for termination of the Trusteeship Agreement.
COMPACT OF FREE ASSOCIATION
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
? AND THE GOVERNMENTS THE MARSHALL ISLANDS
AND THE FEDERATED STATES OF MICRONESIA
Affirming that their Governments and their relationships as
Governments are founded upon respect for human rights and
fundamental freedoms for all, and that the peoples of the Trust
Territory of the Pacific Islands have the right to enjoy
self-government; and
Affirming the common interests of the United States of
America and the peoples of the Trust Territory of the Pacific
Islands in creating close and mutually beneficial relationships
through three free and voluntary associations of their respective
Governments; and
Affirming the interest of the Government of the United States
in promoting the economic advancement and self-sufficiency of the
peoples of the Trust Territory of the Pacific Islands; and
Recognizing that their previous relationship has been based
upon t e International Trusteeship System of the United Nations
Charter, and in particular Article 76 of the Charter; and that
pursuant to Article 76 of the Charter, the peoples of the Trust
Territory have progressively developed their institutions of
self-government, and that in the exercise of their sovereign right
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to self-determination they have, through their freely-expressed
wishes, adopted Constitutions appropriate to their particular
circumstances; and
Recognizing their common desire to terminate the Trusteeship
and establish three new government-to-government relationships
each of which is in accordance with a new political status based
on the freely-expressed wishes of peoples of the Trust Territory
of the Pacific Islands and appropriate to their particular
circumstances; and
Recognizing that the peoples of the Trust Territory of the
Pacific Islands have and retain their sovereignty and their
sovereign right to self-determination and the inherent right to
adopt and amend their own Constitutions and forms of government
and that the approval of the entry of their respective Governments
into this Compact of Free Association by the peoples of the Trust
Territory of the Pacific Islands constitutes an exercise of their
sovereign right to self-determination;
NOW, THEREFORE, AGREE to enter into relationships of free
association which provide a full measure of self-government for
the peoples of the Marshall Islands and the Federated States of
Micronesia; and
FURTHER AGREE that the relationships of free association
derive from and are as set forth in this Compact; and that, during
such relationships of free association, the respective rights and
responsibilities of the Government of the United States and the
Governments of the freely associated states of the Marshall
Islands and the Federated States of Micronesia in regard to these
relationships of free association derive from and are as set forth
in this Compact.
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i
COMPACT OF FREE ASSOCIATION
TABLE OF CONTENTS
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . iii - iv
TITLE ONE - - - - - - GOVERNMENTAL RELATIONS - - - - - 1-1 - 1-20
Article I......... Self-Government ...................1-1
Article II........ Foreign Affairs ...................1-2 - 1-4
Article III....... Communications ....................1-5 - 1-6
Article IV........ Immigration .......................1-7 - 1-9
Article V......... Representation ....................1-10 -'1-11
Article VI........ Environmental Protection .......... 1-12 - 1-15
Article VII....... General Legal Provisions .......... 1-16 - 1-20
TITLE TWO - - - - - - ECONOMIC RELATIONS - - - - - - - 2-1 - 2-13
Article .I......... Grant Assistance ..................2-1 - 2-5
Article II........ Program Assistance ................2-6 - 2-8
Article III....... Administrative Provisions.........2-9 - 2-10
Article IV........ Trade .............................2-11
Article V......... Finance and Taxation ..............2-12 - 2-13
TITLE THREE - - - - - SECURITY AND DEFENSE RELATIONS - 3-1 - 3-8
Article I......... Authority and Responsibility......3-1 - 3-3
Article II........ Defense Facilities and
Operating Rights ..................3-4
Article III....... Defense Treaties and
International Security Agreements.3-5
Article IV........ Service in Armed Forces of the
United States .....................3-6
Article V......... General Provisions ................3-7 - 3-8
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TITLE FOUR- - - - - - GENERAL PROVISIONS- - - - - - - - 4-1 - 4-13
Article I......... Approval and Effective Date ....... 4-1
Article 'II........ Conference and Dispute Resolution.4-2 - 4-3
Article III....... Amendment .........................4-4
Article IV........ Termination .......................4-5
Article V......... Survivability .....................4-6 - 4-7
Article VI........ Definition of Terms ...............4-8 - 4-12
Article VII....... Concluding Provisions .............4-13
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GOVERNMENTAL RELATIONS
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1-1
Article I
Self-Government
Section 111
The peoples of the Marshall Islands and the Federated States
of Micronesia, acting through the Governments established under
their respective Constitutions, are self-governing.
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1-2
Article II
Foreign Affairs
Section 121
(a) The Governments of the Marshall Islands and the Federated
States of Micronesia have the capacity to'conduct foreign affairs
and shall do so in their own name and right, except as otherwise
provided in this Compact.
(b) The foreign affairs capacity of the Governments of the
Marshall Islands and the Federated States of Micronesia includes:
(1) the conduct of foreign affairs relating to law of the
sea and marine resources matters, including the
harvesting, conservation, exploration or exploitation
of living and non-living resources from the sea,
seabed or subsoil to the full extent recognized under
international law;
(2) the conduct of their commercial, diplomatic, consular,
economic, trade, banking, postal, civil aviation, com-
munications, and cultural relations, including nego-
tiations for the receipt of developmental loans and
grants and the conclusion of arrangements with other
governments and international and intergovernmental
organizations, including any matters specially bene-
fiting their individual citizens.
(c) The Government of the United States recognizes that the
Governments of the Marshall Islands and the Federated States of
Micronesia have the capacity to enter into, in their own name and
right, treaties and other international agreements with
governments and regional and international organizations.
(d) In the conduct of their foreign affairs, the Governments
of the Marshall Islands and the Federated States of Micronesia
confirm that they shall act in accordance with principles of
international law and shall settle their international disputes by
peaceful means.
Section 122
The Government of the United States shall support applications
by the Governments of the Marshall Islands and the Federated
States of Micronesia for membership or other participation in
regional or international organizations as may be mutually agreed.
The Government of the United States agrees to accept for training
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and instruction at the Foreign Service Institute, established
under 22 U.S.C. 4021, citizens of the Marshall Islands and the
Federated States of Micronesia. The qualifications of candidates
for such training and instruction and all other terms and condi-
tions of participation by citizens of the Marshall Islands and the
Federated States of Micronesia in Foreign Service Institute pro-
grams shall be as mutually agreed between the Government of the
United States and the Governments of the Marshall Islands and the
Federated States of Micronesia.
Section 123
(a) In recognition of the authority and responsibility of the
Government of the United States under Title Three, the Governments
of the Marshall Islands and the Federated States of Micronesia
shall consult, in the conduct of their foreign affairs, with the
Government of the United States.
(b) In recognition of the respective foreign affairs capaci-
ties of the Governments of the Marshall Islands and the Federated
States of Micronesia, the Government of the United States, in the
conduct of its foreign affairs, shall consult with the Government
of the Marshall Islands or the Federated States of Micronesia on
matters which the Government of the United States regards as
relating to or affecting any such Government.
Section 124.
The Government of the United States may assist or act on
behalf of the Government of the Marshall Islands or the Federated
States of Micronesia in the area of foreign affairs as may be
requested and mutually agreed from time to time. The Government
of the United States shall not be responsible to third parties for
the actions of the Government of the Marshall Islands or the
Federated States of Micronesia undertaken with the assistance or
through the agency of the Government of the United States pursuant
to this Section unless expressly agreed.
Section 125
The Government of the United States shall not be responsible
for nor obligated by any actions taken by the Government of the
Marshall Islands or the Federated States of Micronesia in the area
of foreign affairs, except as may from time to time be expressly
agreed.
Section 126
At the request of the Government of the Marshall Islands or
the Federated States of Micronesia and subject to the consent of
the receiving state, the Government of the United States shall
extend consular assistance on the same basis as for citizens of
the United States to,'citizens of the Marshall Islands and the
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Federated States of Micronesia for travel outside the Marshall
Islands and the Federated States of Micronesia, the United States
and its territories and possessions.
Section 127
Except as otherwise provided in this Compact or its related
agreements, all obligations, responsibilities, rights and benefits
of the Government of the United States as Administering Authority
which have resulted from the application pursuant to the Trustee-
ship Agreement of any treaty or other international agreement to
the Trust Territory of the Pacific Islands on the day preceding
the effective date of this Compact are no longer assumed and
enjoyed by the Government of the United States.
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1-5
Article III
Communications
Section 131
(a) The Governments of the Marshall Islands and the Federated
States of Micronesia have full authority and responsibility to
regulate their respective domestic and foreign communications, and
the Government of the United States shall provide communication
assistance in accordance with the terms of a separate agreement
which shall come into effect simultaneously with this Compact, and
such agreement shall remain in effect until such time as any
election is made pursuant to Section 131(b) and which shall
provide for the following:
(1) the Government of the United States remains the sole
administration entitled to make notification to the
International Frequency Registration Board of the
International Telecommunications Union of frequency
assignments to radio communications stations respec-
tively in the Marshall Islands and the Federated
States of Micronesia; and to submit to the Inter-
national Frequency Registration Board seasonal sched-
ules for the broadcasting stations respectively in
the Marshall Islands and the Federated States of
Micronesia in the bands allocated exclusively to the
broadcasting service between 5,950 and 26,100 kHz and
in any other additional frequency bands that may be
allocated to use by high frequency broadcasting
stations; and
(2) the United States Federal Communications Commission
has jurisdiction, pursuant to the Communications Act
of 1934, 47 U.S.C. 151 et. seq., and the Communica-
tions Satellite Act of 1962, 47 U.S.C. 721 et. se g.,
over all domestic and foreign communications services
furnished by means of satellite earth terminal sta-
tions where such stations are owned or operated by
United States common carriers and are located in the
Marshall Islands or the Federated States of Micronesia.
(b) The Government of the Marshall Islands or the Federated
States of Micronesia may elect at any time to undertake the func-
tions enumerated in Section 131(a) and previously performed by the
Government of the United States. Upon such election, the Govern-
ment of the United States shall so notify the International Fre-
quency Registration Board and shall take such other actions as may
be necessary to transfer to the electing Government the notifica-
tion authority referred to in Section 131(a) and all rights deriv-
ing from the previous exercise of any such notification authority
by the Government of the United States.
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Section 132
The Governments of the Marshall Islands and the Federated
States of Micronesia shall permit the Government of the United
States to operate telecommunications services in the Marshall
Islands and the Federated States of Micronesia to the extent
necessary to fulfill the obligations of the Government of the
United States under this Compact in accordance with the terms of
separate agreements which shall come into effect simultaneously
with this Compact.
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1-7
Article IV
Immigration
Section 141
(a) Any person in the following categories may enter into,
lawfully engage in occupations, and establish residence as a
non-immigrant in the United States and its territories and
possessions without regard to paragraphs (14), (20), and (26) of
section 212(a) of the Immigration and Nationality Act, 8 U.S.C.
1182(a) (14), (20), and (26):
(1) a person who, on the day preceding the effective date
of this Compact, is a citizen of the Trust Territory
of the Pacific Islands, as defined in Title 53 of the
Trust Territory Code in force on January 1, 1979, and
has become a citizen of the Marshall Islands or the
Federated States of Micronesia;
(2) a person who acquires the citizenship of the Marshall
Islands or the Federated States of Micronesia at
birth, on or after the effective date of the
respective Constitution;
(3) a naturalized citizen of the Marshall Islands or the
Federated States of Micronesia who has been an actual
resident there for not less than five years after
attaining such naturalization and who holds a
certificate of actual residence; or
(4) a person entitled to citizenship in the Marshall
Islands by lineal descent whose name is included in a
list to be furnished by the Government of the Mar-
shall Islands to the United States Immigration and
Naturalization Service and any descendants of such
persons, provided that such person holds a certifi-
cate of lineal descent issued by the Government of
the Marshall Islands.
Such persons shall be considered to have the permission of the
Attorney General of the United States to accept employment in the
United States.
(b) The right of such persons to establish habitual residence
in a territory or possession of the United States may, however, be
subjected to non-discriminatory limitations provided for:
(1) in statutes or regulations of the United States; or
(2) in those statutes or regulations of the territory or
possession concerned which are authorized by the laws
of the jlnited States.
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(c) Section 141(a) does not confer on a citizen of the
Marshall Islands or the Federated States of Micronesia the right
to establish the residence necessary for naturalization under the
Immigration and Nationality Act, or to petition for benefits for
alien relatives under that Act. Section 141(a),- however, shall
not prevent a citizen of the Marshall Islands or the Federated
States of Micronesia from otherwise acquiring such rights or
lawful permanent resident alien status in the United States.
Section 142
(a) Any citizen or national of the United States may enter
into, lawfully engage in occupations, and reside in the Marshall
Islands or the Federated States of Micronesia, subject to the
rights of those Governments to deny entry to or deport any such
citizen or national as an undesirable alien. A citizen or
national of the United States may establish habitual residence or
domicile in the Marshall Islands or the Federated States of
Micronesia only in accordance with the laws of the jurisdiction in
which habitual residence or domicile is sought.
(b) With respect to the subject matter of this Section, the
Government of the Marshall Islands or the Federated States of
Micronesia shall accord to citizens and nationals of the United
States treatment no less favorable than that accorded to citizens
of other countries; any denial of entry to or deportation of a
citizen or national of the United States as an undesirable alien
must be pursuant to reasonable statutory grounds.
Section 143
(a) The privileges set forth in Sections 141 and 142 shall not
apply to any person who takes an affirmative step to preserve or
acquire a citizenship or nationality other than that of the Marshall
Islands, the Federated States of Micronesia or the United States.
(b) Every person having the privileges set forth in Sections
141 and 142 who possesses a citizenship or nationality other than
that of the Marshall Islands, the Federated States of Micronesia
or the United States ceases to have these privileges two years
after the effective date of this Compact, or within six months
after becoming 21 years of age, whichever comes later, unless such
person executes an oath of renunciation of that other citizenship
or nationality.
Section 144
(a) A citizen or national of the United States who, after
notification to the Government of the United States of an inten-
tion to employ such person by the Government of the Marshall
Islands or the Federated States of Micronesia, commences
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employment with such Government shall not be deprived of his
United States nationality pursuant to Section 349(a)(2) and (a)(4)
of the Immigration and Nationality Act, 8 U.S.C. 1481 (a)(2) and
(a)(4).
(b) Upon such notification by the Government of the
Marshall Islands or the Federated States of Micronesia, the Gov-
ernment of the United States may consult with or provide informa-
tion to the notifying Government concerning the prospective em-
ployee, subject to the provisions of the Privacy Act, 5 U.S.C.
552a.
(c) The requirement of prior notification shall not apply
to those citizens or nationals of the United States who are
employed by the Government of the Marshall Islands or the
Federated States of Micronesia on the effective date of this
Compact with respect to the positions held by them at that time.
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1-10
Article V
Representation
Section 151
The Government of the United States and the Government of the
Marshall Islands or the Federated States of Micronesia may
establish and maintain representative offices in the capital of
the other for the purpose of maintaining close and regular
consultations on matters arising in the course of the relationship
of free association and conducting other government business. The
Governments may establish and maintain additional offices on terms
and in locations as may be mutually agreed.
Section 152
(a) The premises of such representative offices, and-their
archives wherever located, shall be inviolable. The property and
assets of such representative offices shall be immune from search,
requisition, attachment and any form of seizure unless such
immunity is expressly waived. Official communications in transit
shall be inviolable and accorded the freedom and protections
accorded by recognized principles of international law to official
communications of a diplomatic mission.
(b) Persons designated by the sending Government may serve in
the capacity of its resident representatives with the consent of
the receiving Government. Such designated persons shall be immune
from civil and criminal process relating to words spoken or
written and all acts performed by them in their official capacity
and falling within their functions as such representatives, except
insofar as such immunity may be expressly waived by the sending
Government. While serving in a resident representative capacity,
such designated persons shall not be liable to arrest or detention
pending trial, except in the case of a grave crime and pursuant to
a decision by a competent judicial authority, and such persons
shall enjoy immunity from seizure of personal property,
immigration restrictions, and laws relating to alien registration,
fingerprinting, and the registration of foreign agents.
(c) The sending Governments and their respective assets,
income and other property shall be exempt from all direct taxes,
except those direct taxes representing payment for specific goods
and services, and shall be exempt from all customs duties and
restrictions on the import or export of articles required for the
official functions and personal use of their representatives and
representative offices.
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(d) Persons designated by the sending Government to serve in
the capacity of its resident representatives shall enjoy the same
taxation exemptions as are set forth in Article 34 of the Vienna
Convention on Diplomatic Relations.
(e) The privileges, exemptions and immunities accorded under
this Section are not for the personal. benefit of the individuals
concerned but are to safeguard the independent exercise of their
official functions. Without prejudice to those privileges,
exemptions and immunities, it is the duty of all such persons to
respect the laws and regulations of the Government to which they
are assigned.
Section 153
(a) Any citizen or national of the United States who, after
consultation between the designating Government and the Government
of the United States, is designated by-the Government of the
Marshall Islands or the Federated States of Micronesia as its
agent, shall enjoy exemption from the requirements of the laws of
the United States relating to the registration of foreign agents.
The Government of the United States shall promptly comply with a
request for consultation made by the prospective designating Gov-
ernment. During the course of the consultation, the Government of
the United States may, in its discretion, and subject to the pro-
visions of the Privacy Act, 5 U.S.C. 552a, transmit such informa-
tion concerning the prospective designee as may be available to it
to the prospective designating Government.
(b) Any citizen or national of the United States may be
employed by the Government of the Marshall Islands or the
Federated States of Micronesia to represent to foreign govern-
ments, officers or agents thereof the positions of the Government
of the Marshall Islands or the Federated States of Micronesia,
without regard to the provisions of 18 U.S.C. 953.
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1-12
Article VI
Environmental Protection
Section 161
The Governments of the United States, the Marshall Islands and
the Federated States of Micronesia declare that it is their policy
to promote efforts to prevent or eliminate damage to the environ-
ment and biosphere and to enrich understanding of the natural
resources of the Marshall Islands and the Federated States of
Micronesia. In order to carry out this policy, the Government of
the United States and the Governments of the Marshall Islands and
the Federated States of Micronesia agree to the following mutual
and reciprocal undertakings.
(a) The Government of the United States:
(1) shall continue to apply the environmental controls
in effect on the day preceding the effective date of
this Compact to those of its continuing activities
subject to Section 161(a)(2), unless and until those
controls are modified under Sections 161(a)(3) and
161(a)(4);
(2) shall apply the National Environmental Policy Act of
1969, 83 Stat. 852, 42 U.S.C. 4321 et se q., to its
activities under the Compact and its related agree-
ments as if the Marshall Islands and the Federated
States of Micronesia were the United States;
(3) shall comply also, in the conduct of any activity
requiring the preparation of an Environmental Impact
Statement under Section 161(a)(2), with standards
substantively similar to those required by the fol-
lowing laws of the United States, taking into account
the particular environments of the Marshall Islands
and the Federated States of Micronesia: the
Endangered Species Act of 1973, 87 Stat. 884, 16
U.S.C. 1531 et sec.; the Clean Air Act, 77 Stat. 392,
42 U.S.C. Supp. 7401 et se q.; the Clean Water Act
(Federal Water Pollution Control Act), 86 Stat. 896,
33 U.S.C. 1251 et seg.; the Ocean Dumping Act (Title
I of the Marine Protection, Research and Sanctuaries
Act of 1972), 86 Stat. 1053, 33 U.S.C. 1411 et seg.;
the Toxic Substances Control Act, 90 Stat. 2003, 15
U.S.C. 2601 et sec.; the Resources Conservation and
Recovery Act of 1976, 90 Stat. 2796, 42 U.S.C. 6901
et se q.; and such other environmental protection laws
of the United States as may be mutually agreed from
time to time with the Government of the Marshall
Islands or the Federated States of Micronesia; and
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(4) shall develop, prior to conducting any activity
requiring the preparation of an Environmental Impact
Statement under Section 161(a)(2), appropriate mech-
anisms, including regulations or other judicially
reviewable standards and procedures, to regulate its
activities governed by Section 161(a)(3) in the
Marshall Islands and the Federated States of Micro-
nesia in a manner appropriate to the special govern-
mental relationship set forth in this Compact. The
agencies of the Government of the United States desig-
nated by law to administer the laws set forth in
Section 161(a)(3) shall participate as appropriate in
the development of any regulation, standard or pro-
cedure under this Section, and the Government of the
United States shall provide the affected Government
of the Marshall Islands or the Federated States of
Micronesia with the opportunity to comment during
such development.
(b) The Governments of the Marshall Islands and the Federated
States of Micronesia shall develop standards and procedures to
protect their environments. As a reciprocal obligation to the
undertakings of the Government of the United States under this
Article, the Governments of the Marshall Islands and the Federated
States of Micronesia, taking into account their particular environ-
ments, shall develop standards for environmental protection sub-
stantively similar to those required of the Government of the
United States by Section 161(a)(3) prior to their conducting
activities in the Marshall Islands and the Federated States of
Micronesia, respectively, substantively equivalent to activities
conducted there by the Government of the United States and, as a
further reciprocal obligation, shall enforce those standards.
(c) Section 161(a), including any standard or procedure
applicable thereunder, and Section 161(b) may be modified or super-
seded in whole or in part by agreement of the Government of the
United States and the Government of the Marshall Islands or the
Federated States of Micronesia.
(d) In the event that an Environmental Impact Statement is no
longer required under the laws of the United States for major fed-
eral actions significantly affecting the quality of the human
environment, the regulatory regime established under Sections
161(a)(3) and 161(a)(4) shall continue to apply to such activities
of the Government of the United States until amended by mutual
agreement.
(e) The President of the United States may exempt any of the
activities of the Government of the United States under this Com-
pact and its related agreements from any environmental standard or
procedure which may be applicable under Sections 161(a)(3) and
161(a)(4) if the President determines it to be in the paramount
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interest of the Government of the United States to do so, consis-
tent with Title Three of this Compact and the obligations of the
Government of the United States under international law. Prior to
any decision pursuant to this subsection, the views of the affect-
ed Government of the Marshall Islands or the Federated States of
Micronesia shall be sought and considered to the extent practic-
able. If the President grants such an exemption, to the extent
practicable, a report with his reasons for granting such exemption
shall be given promptly to the affected Government.
(f) The laws of the United States referred to in Section
161(a)(3) shall apply to the activities of the Government of the
United States under this Compact and its related agreements only
to the extent provided for in this Section.
Section 162
The Government of the Marshall Islands or the Federated States
of Micronesia may bring an action for judicial review of any admin-
istrative agency action or any activity of the Government of the
United States pursuant to Sections 161(a), 161(d) or 161(e) or for
enforcement of the obligations of the Government of the United
States arising thereunder. The United States District Court for
the District of Hawaii and the United States District Court for
the District of Columbia shall have jurisdiction over such action
or activity, and over actions brought under Section 172(b) which
relate to the activities of the Government of the United States
and its officers and employees, governed by Section 161, provided
that:
(a) Such actions may only be civil actions for any appropriate
civil relief other than punitive damages against the Government of
the United States or, where required by law, its officers in their
official capacity; no criminal actions may arise under this
Section;
(b) Actions brought pursuant to this Section may be initiated
only by the Government concerned;
(c) Administrative agency actions arising under Section 161
shall be reviewed pursuant to the standard of judicial review set
forth in 5 U.S.C. 706;
(d) The District Court shall have jurisdiction to issue all
necessary processes, and the Government of the United States
agrees to submit itself to the jurisdiction of the court; deci-
sions of the District Court shall be reviewable in the United
States Court of Appeals for the Ninth Circuit or the United States
Court of Appeals for the District of Columbia, respectively, or in
the United States Supreme Court as provided by the laws of the
United States;
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(e) The judicial remedy provided for in this Section shall be
the exclusive remedy for the judicial review or enforcement of the
obligations of the Government of the United States under this
Article and actions brought under Section 172(b) which relate to
the activities of the Government of the United States and its
officers and employees governed by Section 161; and
(f) In actions pursuant to this Section, the Governments of
the Marshall Islands and the Federated States of Micronesia shall
be treated as if they were United States citizens.
Section 163
(a) For the purpose of gathering data necessary to study the
environmental effects of activities of the Government of the
United States subject to the requirements of this Article, the
Governments of the Marshall Islands and the Federated States of
Micronesia shall be granted access to facilities operated by the
Government of the United States in the Marshall Islands and the
Federated States of Micronesia, to the extent necessary for this
purpose, except to the extent such access would unreasonably
interfere with the exercise of the authority and responsibility of
the Government of the United States under Title Three.
(b) The Government of the United States, in turn, shall be
granted access to the Marshall Islands or the Federated States of
Micronesia for the purpose of gathering data necessary to
discharge its obligations under this Article, except to the extent
such access would unreasonably interfere with the exercise of the
authority and responsibility of the Government of the Marshall
Islands or the Federated States of Micronesia under Title One, and
to the extent necessary for this purpose shall be granted access
to documents and other information to the same extent similar
access is provided those Governments under the Freedom of
Information Act, 5 U.S.C. 552.
(c) The Governments of the Marshall Islands and the
Federated States of Micronesia shall not impede efforts by the
Government of the United States to comply with applicable
standards and procedures.
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1-16
Article VII
General Legal Provisions
Section 171
Except as provided in this Compact or its related agreements,
the application of the laws of the United States to the Trust
Territory of the Pacific Islands by virtue of the Trusteeship
Agreement ceases with respect to the Marshall Islands and the
Federated States of Micronesia as of the effective date of this
Compact.
Section 172
(a) Every citizen of the. Marshall Islands or the Federated
States of Micronesia who is not a resident of the United States
shall enjoy the rights and remedies under the laws of the United
States enjoyed by any non-resident alien.
(b) The Governments of the Marshall Islands and the
Federated States of Micronesia and every citizen of the Marshall
Islands or the Federated States of Micronesia shall be considered
a "person" within the meaning of the Freedom of Information Act, 5
U.S.C. 552, and of the judicial review provisions of the Adminis-
trative Procedure Act, 5 U.S.C. 701-706, except that only the
Government of the Marshall Islands or the Federated States of
Micronesia may seek judicial review under the Administrative
Procedure Act or judicial enforcement under the Freedom of Infor-
mation Act when such judicial review or enforcement relates to the
activities of the Government of the United States governed by
Sections 161 and 162.
Section 173
The Governments of the United States, the Marshall Islands and
the Federated States of Micronesia agree to adopt and enforce such
measures, consistent with this Compact and its related agreements,
as may be necessary to protect the personnel, property, installa-
tions, services, programs and official archives and documents
maintained by the Government of the United States in the Marshall
Islands and the Federated States of Micronesia pursuant to this'
Compact and its related agreements and by those Governments in the
United States pursuant to this Compact and its related agreements.
Section 174
Except as otherwise provided in this Compact and its related
agreements:
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(a) The Governments of the Marshall Islands and the Federated
States of Micronesia shall be immune from the jurisdiction of the
courts of the United States, and the Government of the United
States shall be immune from the jurisdiction of the courts of the
Marshall Islands and the Federated States of Micronesia.
(b) The Government of the United States accepts responsibility
for and shall pay:
(1) any unpaid-money judgment rendered by the High Court
of the Trust Territory of the Pacific Islands against
the Government of the Trust Territory of the Pacific
Islands or the Government of the United States with
regard to any cause of action arising as a result of
acts or omissions of the Government of the Trust Ter-
ritory of the Pacific Islands or the Government of the
United States prior to the effective date of this
Compact;
(2) any claim settled by the claimant and the Government
of the Trust Territory of the Pacific Islands but not
paid as of the effective date of this Compact; and
(3) settlement of any administrative claim or of any
action before a court of the Trust Territory of the
Pacific Islands, pending as of the effective date of
this Compact, against the Government of the Trust Ter-
ritory of the Pacific Islands or the Government of the
United States, arising as a result of acts or omis-
sions of the Government of the Trust Territory of the
Pacific Islands or the Government of the United States.
(c) Any claim not referred to in Section 174(b) and arising from
an act or omission of the Government of the Trust Territory of the
Pacific Islands or the Government of the United States prior to the
effective date of this Compact shall be adjudicated in the same man-
ner as a claim adjudicated according to Section 174(d). In any claim
against the Government of the Trust Territory of the Pacific Islands,
the Government of the United States shall stand in the place of the
Government of the Trust Territory of the Pacific Islands. A judgment
on any claim referred to in Section 174(b) or this subsection, not
otherwise satisfied by the Government of the United States, may"be
presented for certification to the United States Court of Appeals
for the Federal Circuit, or its successor court, which shall have
jurisdiction therefor, notwithstanding the provisions of 28 U.S.C.
1502, and which court's decisions shall be reviewable as provided
by the laws of the United States. The United States Court of
Appeals for the Federal Circuit shall certify such judgment, and
order payment thereof, unless it finds, after a hearing, that such
judgment is manifestly erroneous as to law or fact, or manifestly
excessive. In either of such cases the United States Court of
Appeals for the Federal Circuit shall have jurisdiction to modify
such judgment.
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(d) The Governments of the Marshall Islands and the Federated
States of Micronesia shall not be immune from the jurisdiction of
the courts of the United States, and the Government of the United
States shall not be immune from the jurisdiction of the courts of
the Marshall Islands and the Federated States of Micronesia in any
case in which the action is based on a commercial activity of the
defendant Government where the action is brought, or in a case in
which damages are sought for personal injury or death or damage to
or loss of property occurring where the action is brought.
Section 175
A separate agreement, which shall come into effect simulta-
neously with this Compact, shall be concluded between the Govern-
ment of the United States and the Governments of the Marshall
Islands and the Federated States of Micronesia regarding mutual
assistance and cooperation in law enforcement matters including
the pursuit, capture, imprisonment and extradition of fugitives
from justice and the transfer of prisoners. The separate agree-
ment shall have the force of law. In the United States, the laws
of the United States governing international extradition, includ-
ing 18 U.S.C. 3184, 3186 and 3188-3195, shall be applicable to the
extradition of fugitives under the separate agreement, and the
laws of the United States governing the transfer of prisoners,
including 18 U.S.C. 4100-4115, shall be applicable to the transfer
of prisoners under the separate agreement.
Section 176
The Governments of the Marshall Islands and the Federated
States of Micronesia confirm that final judgments in civil cases
rendered by any court of the Trust Territory of the Pacific
Islands shall continue in full force and effect, subject to the
constitutional power of the courts of the Marshall Islands and the
Federated States of Micronesia to grant relief from judgments in
appropriate cases.
Section 177
(a) The Government of the United States accepts the respon-
sibility for compensation owing to citizens of the Marshall
Islands, or the Federated States of Micronesia for loss or damage
to property and person of the citizens of the Marshall Islands, or
the Federated States of Micronesia, resulting from the nuclear
testing program which the Government of the United States conducted
in the Northern Marshall Islands between June 30, 1946, and August
18, 1958.
(b) The Government of the United States and the Government
of the Marshall Islands shall set forth in a separate agreement
provisions for the just and adequate settlement of all such claims
which have arisen in regard to the Marshall Islands and its
citizens and which h4ve not as yet been compensated or which in
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the future may arise, for the continued administration by the Gov-
ernment of the United States of direct radiation related medical
surveillance and treatment programs and radiological monitoring
activities and for such additional programs and activities as may
be mutually agreed, and for the assumption by the Government of
the Marshall Islands of responsibility for enforcement of limita-
tions on the utilization of affected areas developed in cooperation
with the Government of the United States and for the assistance by
the Government of the United States in the exercise of such respon-
sibility as may be mutually agreed. This separate agreement shall
come into effect simultaneously with this Compact and shall remain
in effect in accordance with its own terms.
(c) The Government of the United States shall provide to the
Government of the Marshall Islands, on a grant basis, the amount
of $150 million to be paid and distributed in accordance with the
separate agreement referred to in this Section, and shall provide
the services and programs set forth in this separate agreement,
the language of which is incorporated into this Compact.
Section 178
(a) The federal agencies of the Government of the United States
which provide the services and related programs in the Marshall
Islands or the Federated States of Micronesia pursuant to Articles
II and III of Title Two are authorized to settle and pay tort
claims arising in the Marshall Islands or the Federated States of
Micronesia from the activities of such agencies or from the acts
or omissions of the employees of such agencies. Except as provided
in Section 178(b), the provisions of 28 U.S.C. 2672 and 31 U.S.C.
1304 shall apply exclusively to such administrative settlements
and payments.
(b) Claims under Section 178(a) which cannot be settled under
Section 178(a) shall be disposed of exclusively in accordance with
Article II of Title Four. Arbitration awards rendered pursuant to
this subsection shall be paid out of funds under 31 U.S.C. 1304.
(c) The Government of the United States and the Government of
the Marshall Islands or the Federated States of Micronesia shall,
in the separate agreements referred to in Section 232, provide
for:
(1) the administrative settlement of claims referred to
in Section 178(a), including designation of local
agents in the Marshall Islands and each State of the
Federated States of Micronesia; such agents to be
empowered to accept, investigate and settle such
claims, in a timely manner, as provided in such
separate agreements; and
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(2) arbitration, referred to in Section 178(b), in a
timely manner, at a site convenient to the claimant,
in the event a claim is not otherwise settled
pursuant to Section 178(a).
(d) The provisions of Section 174(d) shall not apply to claims
covered by this Section.
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ECONOMIC RELATIONS
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2-1
Article I
Grant Assistance
Section 211
(a) In order to assist the Governments of the Marshall
Islands and the Federated States of Micronesia in their efforts to
advance the economic self-sufficiency of their peoples and in
recognition of the special relationship that exists between them
and the United States, the Government of the United States shall
provide on a grant basis the following amounts:
(1) to the Government of the Marshall Islands, $26.1 mil-
lion annually for five years commencing on the effec-
tive date of this Compact, $22.1 million annually for
five years commencing on the fifth anniversary of the
effective date of this Compact, and $19.1 million
annually for five years commencing on the tenth anni-
versary of this Compact. Over this fifteen-year
period, the Government of the Marshall Islands shall
dedicate an average of no less than 40 percent of
these amounts to the capital account subject to pro-
vision for revision of this percentage incorporated
into the plan referred to in Section 211(b).
(2.) to the Government of the Federated States of Micro-
nesia, $60 million annually for five years commencing
on the effective date of this Compact, $51 million
annually for five years commencing on the fifth anni-
versary of the effective date of this Compact, and
$40 million annually for five years commencing on the
tenth anniversary of the effective date of this Com-
pact. Over this fifteen year period, the Government
of the Federated States of Micronesia shall dedicate
an average of no less than 40 percent of these amounts
annually to the capital account subject to provision
for revision of this percentage incorporated into the
plan referred to in Section 211(b). To take into
account the special nature of the assistance, to be
provided under this paragraph and Sections 212(b),
213(c), 214(c), 215(a)(3), 215(b)(3), 216(a), 216(b),
221(a), and 221(b), the division of these amounts
among the national and. state governments of the
Federated States of Micronesia shall be certified to
the Government of the United States by the Government
of the Federated States of Micronesia.
(b) The annual expenditure of the grant amounts specified for
the capital account in Section 211(a) by the Governments of the
Marshall Islands and the Federated States of Micronesia shall be
in accordance with official overall economic development plans
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provided by those Governments and concurred in by the Government
of the United States prior to the effective date of this Compact.
These plans may be amended from time to time by the Government of
the Marshall Islands or the Federated States of Micronesia.
(c) The Government of the United States and the Governments
of the Marshall Islands and the Federated States of Micronesia
recognize that the achievement of the goals of the plans referred
to in Section 211(b) depends upon the availability of adequate
internal revenue as well as economic assistance from sources out-
side of the Marshall Islands and the Federated States of Micronesia,
including the Government of the United States, and may, in addition,
be affected by the impact of exceptional, economically adverse
circumstances. Each of the Governments of the Marshall Islands
and the Federated States of Micronesia shall therefore report
annually to the President of the United States and to the Congress
of the United States on the implementation of the plans and on
their use of the funds specified in this Article. These reports
shall outline the achievements of the plans to date and the need,
if any, for an additional authorization and appropriation of
economic assistance for that year to account for any exceptional,
economically adverse circumstances. It is understood that the
Government of the United States cannot be committed by this
Section to seek or support such additional economic assistance.
Section 212
In recognition of the special development needs of the Feder-
ated States of Micronesia, the Government of the United States
shall provide to the Government of the Federated States cf Micro-
nesia $1 million annually for fourteen years commencing on the
first anniversary of the effective date of this Compact. This
amount may be used by the Government of the Federated States of
Micronesia to defray current account expenditures attendant to the
operation of the United States military Civic Action Teams made
available in accordance with the separate agreement referred to in
Section 227.
Section 213
(a) The Government of the United States shall provide on a
grant basis $1.9 million annually to the Government of the Marshall
Islands in conjunction with Section 321(a). The Government of the
Marshall Islands, in its use of such funds, shall take into account
the impact of the activities of the Government of the United States
in the Kwajalein Atoll area of the Marshall Islands.
(b) The Government of the United States shall provide on a
grant basis to the Government of the Federated States of Micronesia
the sum of $160,000 in conjunction with Section 321(a). This sum
shall be made available concurrently with the grant assistance
provided pursuant to this Article during the first year after the
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effective date of this Compact. The Government of the Federated
States of Micronesia, in its use of such funds, shall take into
account the impact of the activities of the Government of the
United States in Yap State, Federated States of Micronesia.
Section 214
As a contribution to efforts aimed at achieving increased
self-sufficiency in energy production, the Government of the United
States shall provide on a current account grant basis for fourteen
years commencing on the first anniversary of the effective date of
this Compact the following amounts:
(a) To the Government of the Marshall Islands, $2 million
annually; and
(b) To the Government of the Federated States of Micronesia,
$3 million annually.
Section 215
(a) As a contribution to the current account operations and
maintenance of communications systems, the Government of the United
States shall provide on a grant basis for fifteen years commencing
on the effective date of this Compact the following amounts:
(1) to the Government of the Marshall Islands, $300,000
annually; and
(2) to the Government of the Federated States of Micro-
nesia, $600,000 annually.
(b) For the purpose of acquiring such communications hardware
as may be located within the Marshall Islands and the Federated
States of Micronesia or for such other current or capital account
activity as may be selected, the Government of the United States
shall provide, concurrently with the grant assistance provided
pursuant to this Article during the first year after the effective
date of this Compact, the sum of $9 million to be allocated as
follows:
(1) to the Government of the Marshall Islands, $3
million; and
(2) to the Government of the Federated States of
Micronesia, $6 million.
Section 216
(a) The Government of the United States shall provide on a
current account basis an annual grant of $5.369 million for
fifteen years commencing on the effective date of this Compact for
the purposes set forth below:
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(1) $890,000 annually for the surveillance and
enforcement by the Governments of the Marshall Islands
and the Federated States of Micronesia of their
respective maritime zones;
(2) $1.791 million annually for health and medical
programs, including referrals to hospital and
treatment centers; and
(3) $2.687 million annually for a scholarship fund or
funds to support the post-secondary education of
citizens of the Marshall Islands and the Federated
States of Micronesia attending United States accred-
ited, post-secondary institutions in the United
States, its territories and possessions, the Marshall
Islands or the Federated States of Micronesia. The
curricular criteria for the award of scholarships
shall be designed to advance the purposes of the
plans referred to in Section 211(b).
(b) The Government of the United States shall provide the sum
of $1.333 million as a contribution to the commencement of
activities pursuant to Section 216(a)(1).
(c) The annual grants referred to in Section 216(a) and the
sum referred to in Section 216(b) shall be made available by the
Government.of the United States promptly after it receives instruc-
tion for their distribution agreed upon by the Governments of the
Marshall Islands and the Federated States of Micronesia.
Section 217
Except as otherwise provided, the amounts stated in Sections
211, 212, 214, 215 and 231 shall be adjusted for each Fiscal Year
by the percent which equals two-thirds of the percentage change in
the United States Gross National Product Implicit Price Deflator,
or seven percent, whichever is less in any one year, using the
beginning of Fiscal Year 1981 as the base.
Section 218
If in any year the funds made available by the Government of
the United States for that year pursuant to this Article or Sec-
tion 231 are not completely obligated by the recipient Government,
the unobligated balances shall remain available in addition to the
funds to be provided in subsequent years.
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Section 219
All funds previously appropriated to the Trust Territory of the
Pacific Islands which are unobligated by the Government of the Trust
Territory of the Pacific Islands as of the effective date of this
Compact shall accrue to the Governments of the Marshall Islands
and the Federated States of Micronesia for the purposes for which
such funds were originally appropriated as determined by the
Government of the United States.
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2-6
Article II
Program Assistance
Section 221
(a) The Government of the United States shall make available
to the Marshall Islands and the Federated States of Micronesia, in
accordance with and to the extent provided in the separate agree-
ments referred to in Section 232, without compensation and at the
levels equivalent to those available to the Trust Territory of the
Pacific Islands during the year prior to the effective date of
this Compact, the services and related programs:
(1) of the United States Weather Service;
(2) of the United States Federal Emergency Management
Agency;
(3) provided pursuant to the Postal Reorganization Act,
39 U.S.C. 101 et se q.;
(4) of the United States Federal Aviation Administration;
and
(5) of the United States Civil Aeronautics Board or its
? successor agencies which has the authority to
implement the provisions of paragraph 5 of Article IX
of such separate agreements, the language of which is
incorporated into this Compact.
(b) The Government of the United States, recognizing the
special needs of the Marshall Islands and the Federated States of
Micronesia particularly in the fields of education and health
care, shall make available, as provided by the laws of the United
States, the annual amount of $10 million which shall be allocated
in accordance with the provisions of the separate agreement
referred to in Section 232.
(c) The Government of the United States shall make available
to the Marshall Islands and the Federated States of Micronesia
such alternate energy development projects, studies and conserva-
tion measures as are applicable to the Trust Territory of the
Pacific Islands on the day preceding the effective date of this
Compact, for the purposes and duration provided in the laws of the
United States.
(d) The Government of the United States shall have and exer-
cise such authority as is necessary for the purposes of this
Article and as is set forth in the separate agreements referred to
in Section 232, which shall also set forth the extent to which
services and programs shall be provided to the Marshall Islands
and the Federated States of Micronesia.
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Section 222
The Government of the United States and the Government of the
Marshall Islands or the Federated States of Micronesia shall
consult regularly or upon request regarding:
(a) The economic development of the Marshall Islands or the
Federated States of Micronesia; or
(b) The services and programs referred to in this Article.
These services and programs shall continue to be provided by the
Government of the United States unless their modification is
provided by mutual agreement or their termination in whole or in
part is requested by any recipient Government.
Section 223
The citizens of the Marshall Islands and the Federated States
of Micronesia who are receiving post-secondary educational
assistance from the Government of the United States on the day pre-
ceding the effective date of this Compact shall continue to be
eligible, if otherwise qualified, to receive such assistance to
complete their academic programs for a maximum of four years after
the effective date of this Compact.
Section 224
The Government of the United States and the Government of the
Marshall Islands or the Federated States of Micronesia may agree
from time to time to the extension of additional United States
grant assistance, services and programs as provided by the laws of
the United States, to the Marshall Islands or the Federated States
of Micronesia, respectively.
Section 225
The Governments of the Marshall Islands and the Federated
States of Micronesia shall make available to the Government of the
United States at no cost such land as may be necessary for the
operations of the services and programs provided pursuant to this
Article, and such facilities as are provided by the Government of
the Marshall Islands or the Federated States of Micronesia at no
cost to the Government of the United States as of the effective
date of this Compact or as may be mutually agreed thereafter.
Section 226
The Governments of the Marshall Islands and the Federated
States of Micronesia may request, from time to time, technical
assistance from the federal agencies and institutions of the Gov-
ernment of the United States, which are authorized to grant such
technical assistance in accordance with its laws and which shall
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grant such technical assistance in a manner which-gives priority
consideration to the Marshall Islands and the Federated States of
Micronesia over other recipients not a part of the United States,
its territories or possessions. The Government of the United
States shall coordinate the provision of such technical assistance
in consultation with the respective recipient Government.
Section 227
In recognition of the special development needs of the
Federated States of Micronesia, the Government of the United
States shall make available United States military Civic Action
Teams for use in the Federated States of Micronesia under terms
and conditions specified in a separate agreement which shall come
into effect simultaneously with this Compact.
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Article III
Administrative Provisions
Section 231
Upon the thirteenth anniversary of the effective date of this
Compact, the Government of the United States and the Governments
of the Marshall Islands and the Federated States of Micronesia
shall commence negotiations regarding those provisions of this
Compact which expire on the fifteenth anniversary of its effec-
tive date. If these negotiations are not concluded by the fifteenth
anniversary of the effective date of this Compact, the period of
negotiations shall extend for not more than two additional years,
during which time the provisions of this Compact including Title
Three shall remain in full force and effect. During this additional
period of negotiations, the Government of the United States shall
continue its assitance to the Governments with which it is nego-
tiating pursuant to this Section at a level which is the average
of the annual amounts granted pursuant to Sections 211, 212, 213,
214, 215 and 216 during the first fifteen years of this Compact.
The average annual amount paid pursuant to Sections 211, 212, 214
and 215 shall be adjusted pursuant to Section 217.
Section 232
The specific nature, extent and contractual arrangements of the
services and programs provided for in Section 221 as well as the
legal status of agencies of the Government of the United States,
their civilian employees and contractors, and the dependents of
such personnel while present in the Marshall Islands or the
Federated States of Micronesia, and other arrangements in connec-
tion with a service or program furnished by the Government of the
United States, are set forth in separate agreements which shall
come into effect simultaneously with this Compact.
Section 233
The Government of the United States, in consultation with the
Governments of the Marshall Islands and the Federated States of
Micronesia, shall determine and implement procedures for the peri-
odic audit of all grants and other assistance made under Article I
of this Title and of all funds expended for the services and pro-
grams provided under Article II of this Title. Such audits shall
be conducted on an annual basis during the first five years follow-
ing the effective date of this Compact and shall be at no cost to
the Government of the Marshall Islands or the Federated States of
Micronesia.
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Section 234
Title to the property of the Government of the United States
situated in the Trust Territory of the Pacific Islands or acquired
ffor or used by the Government of the Trust Territory of the
Pacific Islands on or before the day preceding the effective date
of this Compact shall, without reimbursement or transfer of funds,
vest in the Governments of the Marshall Islands and the Federated
States of Micronesia as set forth in a separate agreement which
shall come into effect simultaneously with this Compact. The
provisions of this Section shall not apply to the property of the
Government of the United States for which the Government of the
United States determines a continuing requirement.
Section 235
(a) Funds held in trust by the High Commissioner of the Trust
Territory of the Pacific Islands, in his official capacity, as of
the effective date of this Compact shall remain available as trust
funds to their designated beneficiaries. The Government of the
United States, in consultation with the Government of the Marshall
Islands or the Federated States of Micronesia, shall appoint a new
trustee who shall exercise the functions formerly exercised by the
High Commissioner of the Trust Territory of the Pacific Islands.
(b) To provide for the continuity of administration, and to
assure the Governments of the Marshall Islands and the Federated
States of Micronesia that the purposes of the laws of the United
States are carried out and that the funds of any other trust fund
in which the High Commissioner of the Trust Territory of the
Pacific Islands has authority of a statutory or customary nature
shall remain available as trust funds to their designated
beneficiaries, the Government of the United States agrees to
assume the authority formerly vested in the High Commissioner of
the Trust Territory of the Pacific Islands.
Section 236
Except as otherwise provided, approval of this Compact by the
Government of the United States shall constitute a pledge of the
full faith and credit of the United States for the full payment of
the sums and amounts specified in Articles I and III of this
Title. The obligation of the United States under Articles I and
III of this Title shall be enforceable in the United States Claims
Court, or its successor court, which shall have jurisdiction in
cases arising under this Section, notwithstanding the provisions
of 28 U.S.C. 1502, and which court's decisions shall be reviewable
as provided by the laws of the United States.
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Section 241
The Marshall Islands and the Federated States of Micronesia
are not included in the customs territory of the United States.
Section 242
For the purpose of assessing duties on their products imported
into the customs territory of the United States, the Marshall
Islands and the Federated States of Micronesia shall be treated as
if they were insular possessions of the United States within the
meaning of General Headnote 3(a) of the Tariff Schedules of the
United States. The exceptions, valuation procedures and all other
provisions of General Headnote 3(a) shall apply to any product
deriving from the Marshall Islands or the Federated States of
Micronesia.
Section 243
All products of the Marshall Islands or the Federated States
of Micronesia imported into the customs territory of the United
States which are not accorded the treatment set forth in Section
242 and all- products of the United States imported into the
Marshall Islands or the Federated States of Micronesia shall
receive treatment no less favorable than that accorded like
products of any foreign country with respect to customs duties or
charges of a similar nature and with respect to laws and regula-
tions relating to importation, exportation, taxation, sale,
distribution, storage or use.
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Article V
Finance and Taxation
Section 251
The currency of the United States is the official circulating
legal tender of the Marshall Islands and the Federated States of
Micronesia. Should the Government of the Marshall Islands or the
Federated States of Micronesia act to institute another currency,
the terms of an appropriate currency transitional period shall be
as agreed with the Government of the United States.
Section 252
The Government of the Marshall Islands or the Federated States
of Micronesia may, with respect to United States persons, tax
income derived from sources within its respective jurisdiction,
property situated therein, including transfers of such property by
gift or at death, and products consumed therein, in such manner as
such Government deems appropriate. The determination of the
source of any income, or the situs of any property, shall for
purposes of this Compact be made according to the United States
Internal Revenue Code.
Section 253
A citizen of the Marshall Islands or the Federated States of
Micronesia, domiciled therein, shall be exempt from:
(a) Income taxes imposed by the Government of the United
States upon fixed or determinable annual income; and
(b) Estate, gift, and generation-skipping transfer taxes
imposed by the Government of the United States.
Section 254
(a) In determining any income tax imposed by the Government
of the Marshall Islands or the Federated States of Micronesia,
those Governments shall have authority to impose tax upon income
derived by a resident of the Marshall Islands or the Federated
States of Micronesia from sources without the Marshall Islands and
the Federated States of Micronesia, in the same manner and to the
same extent as those Governments impose tax upon income derived
from within their respective jurisdictions. If the Government of
the Marshall Islands or the Federated States of Micronesia exer-
cises such authority as provided in this subsection, any individual
resident of the Marshall Islands or the Federated States of Micro-
nesia who is subject to tax by the Government of the United States
on income which is also taxed by the Government of the Marshall
Islands or the Federated States of Micronesia shall be relieved of
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liability to the Govern- ment of the United States for the tax
which, but for this subsection, would otherwise be imposed by the
Government of the United States on such income. For purposes of
this Section,-the term "resident of the Marshall Islands or the
Federated States of Micronesia" shall be deemed to include any
person who was physically present in the Marshall Islands or the
Federated States of Micronesia for a period of 183 or more days
during any taxable year; provided, that as between the Governments
of the Marshall Islands and the Federated States of Micronesia,
the authority to tax an individual resident of the Marshall
Islands or the Federated States of Micronesia in respect of income
from sources without the Marshall Islands and the Federated States
of Micronesia as provided in this subsection may be exercised only
by the Government in whose jurisdiction such individual was
physically present for the greatest number of days during the
taxable year.
(b) If the Government of the Marshall Islands or the
Federated States of Micronesia subjects income to taxation substan-
tially similar to that imposed by the Trust Territory Code in
effect on January 1, 1980, such Government shall be deemed to have
exercised the authority described in Section 254(a).
Section 255
Where not otherwise manifestly inconsistent with the intent of
this Compact, provisions in the United States Internal Revenue
Code that are applicable to possessions of the United States as of
January 1, 1980 shall be treated as applying to the Marshall
Islands and the Federated States of Micronesia. If such provisions
of the Internal Revenue Code are amended, modified or repealed
after that date, such provisions shall continue in effect as to
the Marshall Islands and the Federated States of Micronesia for a
period of two years during which time the Government of the United
States and the Governments of the Marshall Islands and the
Federated States of Micronesia shall negotiate an agreement
which shall provide benefits substantively equivalent to those
which obtained under such provisions.
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SECURITY AND DEFENSE RELATIONS
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Article I
Authority and Responsibility
Section 311
(a) The Government of the United States has full authority
and responsibility for security and defense matters in or relating
to the Marshall Islands and the Federated States of Micronesia.
(b) This authority and responsibility includes:
(1) the obligation to defend the Marshall Islands
and the Federated States of Micronesia and their
peoples from attack or threats thereof as the United
States and its citizens are defended;
(2) the option to foreclose access to or use of the
Marshall Islands and the Federated States of
Micronesia by military personnel or for the military
purposes of any third country; and
(3) the option to establish and use military areas and
facilities in the Marshall Islands and the Federated
States of Micronesia, subject to the terms of the
separate agreements referred to in Sections 321 and
? 323.
(c) The Government of the United States confirms that it shall
act in accordance with the principles of international law and the
Charter of the United Nations in the exercise of this authority
and responsibility.
Section 312
Subject to the terms of any agreements negotiated in accor-
dance with Sections 321 and 323, the Government of the United
States may conduct within the lands, waters and airspace of the
Marshall Islands and the Federated States of Micronesia the
activities and operations necessary for the exercise of its
authority and responsibility under this Title.
Section 313
(a) The Governments of the Marshall Islands and the
Federated States of Micronesia shall refrain from actions which
the Government of the United States determines, after appropriate
consultation with those Governments, to be incompatible with its
authority and responsibility for security and defense matters in
or relating to the Marshall Islands and the Federated States of*
Micronesia.
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(b) The consultations referred to in this Section shall be con-
ducted expeditiously at senior levels of the Governments concerned,
and the subsequent determination by the Government of the United
States referred to in this Section shall be made only at senior
interagency levels of the Government of the United States.
(c) The Government of the Marshall Islands or the Federated
States of Micronesia shall be afforded, on an expeditious basis,
an opportunity to raise its concerns with the United States
Secretary of State personally and the United States Secretary of
Defense personally regarding any determination made in accordance
with this Section.
Section 314
(a) Unless otherwise agreed, the Government of the United
States shall not, in the Marshall Islands or the Federated States
of Micronesia:
(1) test by detonation or dispose of any nuclear weapon,
nor test, dispose of, or discharge any toxic chemical
or biological weapon; or
(2) test, dispose of, or discharge any other radioactive,
toxic chemical or biological materials in an amount
or manner which would be hazardous to public health
? or safety.
(b) Unless otherwise agreed, other than for transit or over-
flight purposes or during time of a national emergency declared by
the President of the United States, a state of war declared by the
Congress of the United States or as necessary to defend against an
actual or impending armed attack on the United States, the Marshall
Islands or the Federated States of Micronesia, the Government of
the United States shall not store in the Marshall Islands or the
Federated States of Micronesia any toxic chemical weapon, nor any
radioactive materials nor any toxic chemical materials intended
for weapons use.
(c) Radioactive, toxic chemical, or biological materials not
intended for weapons use shall not be affected by Section 314(b).
(d) No material or substance referred to in this Section
shall be stored in the Marshall Islands or the Federated States of
Micronesia except in an amount and manner which would not be
hazardous to public health or safety. In determining what shall
be an amount or manner which would be hazardous to public health
or safety under this Section, the Government of the United States
shall comply with any applicable mutual agreement, international
guidelines accepted by the Government of the United States, and
the laws of the United States and their implementing regulations.
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(e) Any exercise of the exemption authority set forth in Sec-
tion 161(e) shall have no effect on the obligations of the Govern-
ment of the United States under this Section or on the application
of this subsection.
(f) The provisions of this Section shall apply in the areas in
which the Government of the Marshall Islands or the Federated States
of Micronesia exercises jurisdiction over the living resources of
the seabed, subsoil or water column adjacent to its coasts.
Section 315
The Government of the United States may invite members of the
armed forces of other countries to use military areas and facili-
ties in the Marshall Islands or the Federated States of
Micronesia, in conjunction with and under the control of United
States Armed Forces. Use by units of the armed forces of other
countries of such military areas and facilities, other than for
transit and overflight purposes, shall be subject to consultation
with and, in the case of major units, approval by the Government
of the Marshall Islands or the Federated States of Micronesia.
Section 316
The authority and responsibility of the Government of the
United States under this Title may not be transferred or otherwise
assigned.
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Article II
Defense Facilities and Operating Rights
Section 321
(a) Specific arrangements for the establishment and use by
the Government of the United States of military areas and facili-
ties in the Marshall Islands or the Federated States of Micronesia
are set forth in separate agreements which shall come into effect
simultaneously with this Compact.
(b) If, in the exercise of its authority and responsibility
under this Title, the Government of the United States requires the
use of areas within the Marshall Islands or the Federated States
of Micronesia in addition to those for which specific arrangements
are concluded pursuant to Section 321(a), it may request the
Government concerned to satisfy those requirements through leases
or other arrangements. The Government of the Marshall Islands or
the Federated States of Micronesia shall sympathetically consider
any such request and shall establish suitable procedures to
discuss it with and provide a prompt response to the Government of
the United States.
(c) The Government of the United States recognizes and
respects the scarcity and special importance of land in the
Marshall Is-lands and the Federated States of Micronesia. In mak-
ing any requests pursuant to Section 321(b), the Government of the
United States shall follow the policy of requesting the minimum
area necessary to accomplish the required security and defense
purpose, of requesting only the minimum interest in real property
necessary to support such purpose, and of requesting first to
satisfy its requirement through public real property, where
available, rather than through private real property.
Section 322
The Government of the United States shall provide and maintain
fixed and floating aids to navigation in the Marshall Islands and
the Federated States of Micronesia at least to the extent
necessary for the exercise of its authority and responsibility
under this Title.
Section 323
The military operating rights of the Government of the United
States and the legal status and contractual arrangements of the
United States Armed Forces, their members, and associated civ-
ilians, while present in the Marshall Islands or the Federated
States of Micronesia, are set forth in separate agreements which
shall come into effect simultaneously with this Compact.
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Article III
Defense Treaties and International Security Agreements
Section 331
Subject to the terms of this Compact and its related
agreements, the Government of the United States, exclusively,
shall assume and enjoy, as to the Marshall Islands and the
Federated States of Micronesia, all obligations, responsibilities,
rights and benefits of:
(a) Any defense treaty or other international security agree-
ment applied by the Government of the United States as Administer-
ing Authority of the Trust Territory of the Pacific Islands as of
the day preceding the effective date of this Compact; and
(b) Any defense treaty or other international security agree-
ment to which the Government of the United States is or may become
a party which it determines to be applicable in the Marshall
Islands and the Federated States of Micronesia. Such a
determination by the Government of the United States shall be
preceded by appropriate consultation with the Government of the
Marshall Islands or the Federated States of Micronesia.
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Article IV
Service in Armed Forces of the United States
Section 341
Any person entitled to the privileges set forth in Section 141
shall be eligible to volunteer for service in the Armed Forces of
the United States, but shall not be subject to involuntary induc-
tion into military service of the United States so long as such
person does not establish habitual residence in the United States,
its territories or possessions.
Section 342
The Government of the United States shall have enrolled, at
any one time, at least two qualified students, one each from
the Marshall Islands and the Federated States of Micronesia, as
may be nominated by their respective Governments, in each of:
(a) The United States Coast Guard Academy pursuant to 14
U.S.C. 195; and
(b) The United States Merchant Marine Academy pursuant to
46 U.S.C. 1295b(b)(6), provided that the provisions of 46 U.S.C.
1295b(b)(6)(C) shall not apply to the enrollment of students
pursuant to Section 342(b) of this Compact.
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Article V
General Provisions
Section 351
(a) The Government of the United States and the Government of
the Marshall Islands or the Federated States of Micronesia shall
establish two Joint Committees empowered to consider disputes
under the implementation of this Title and its related agreements.
(b) The membership of each Joint Committee shall comprise
selected senior officials of each of the two participating Govern-
ments. The senior United States military commander in the Pacific
area shall be the senior United States member of each Joint Commit-
tee. For the meetings of each Joint Committee, each of the two
participating Governments may designate additional or alternate re-
presentatives as appropriate for the subject matter under
consideration.
(c) Unless otherwise mutually agreed, each Joint Committee
shall meet semi-annually at a time and place to be designated,
after appropriate consultation, by the Government of the United
States. A Joint Committee also shall meet promptly upon request
of either of its members. Upon notification by the Government of
the United States, the Joint Committees so notified shall meet pro-
mptly in a combined session to consider matters within the juris-
diction of more than one Joint Committee. Each Joint Committee
shall follow such procedures, including the establishment of func-
tional subcommittees, as the members may from time to time agree.
(d) Unresolved issues in each Joint Committee shall be referred
to the Governments concerned for resolution, and the Government of
the Marshall Islands or the Federated States of Micronesia shall
be afforded, on an expeditious basis, an opportunity to raise
its concerns with the United States Secretary of Defense personally
regarding any unresolved issue which threatens its continued
association with the Government of the United States.
Section 352
In the exercise of its authority and responsibility under
Title Three, the Government of the United States shall accord due
respect to the authority and responsibility of the Governments of
the Marshall Islands and the Federated States of Micronesia under
Titles One, Two and Four and to their responsibility to assure the
well-being of their peoples.
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Section 353
(a) The Government of the United States shall not include any
of the Governments of the Marshall Islands and the Federated
States of Micronesia as named parties to a formal declaration of
war, without their respective consent.
(b) Absent such consent, this Compact is without prejudice,
on the ground of belligerence or the existence of a state of war,
to any claims for damages which are advanced by the citizens,
nationals or Government of the Marshall Islands or the Federated
States of Micronesia, which arise out of armed conflict subsequent
to the effective date of this Compact and which are:
(1)
petitions to the Government of the United States for
redress; or
(2)
claims.in
citizens,
country.
any manner against the government,
nationals or entities of any third
(c) Petitions under Section 353(b)(1) shall be treated as if
they were made by citizens of the United States.
Section 354
(a) Notwithstanding any other provision of this Compact, the
provisions of this Title are binding from the effective date of
this Compact for a period of fifteen years between the Government
of the United States and the Governments of the Marshall Islands
and the Federated States of Micronesia and thereafter as'mutually
agreed or in accordance with Section 231, unless earlier terminated
by mutual agreement pursuant to Section 441, or amended pursuant
to Article III of Title Four.
(b) The Government of the United States recognizes, in view
of the special relationship between the Government of the United
States and the Governments of the Marshall Islands and the
Federated States of Micronesia, and in view of the existence of
separate agreements with each of them pursuant to Sections 321 and
323, that, even if this Title should terminate, any attack on the
Marshall Islands or the Federated States of Micronesia during the
period in which such separate agreements are in effect, would
constitute a threat to the peace and security of the entire region
and a danger to the United States. In the event of such an
attack, the Government of the United States would take action to
meet the danger to the United States and to the Marshall Islands
and the Federated States of Micronesia in accordance with its
constitutional processes.
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GENERAL PROVISIONS
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Article I
Approval and Effective Date
Section 411
This Compact shall come into effect upon mutual agreement be-
tween the Government of the United States, acting in fulfillment
of its responsibilities as Administering Authority of the Trust
Territory of the Pacific Islands, and the Government of the
Marshall Islands or the Federated States of Micronesia and subse-
quent to completion of the following:
(a) Approval by the Government of the Marshall Islands or the
Federated States of Micronesia in accordance with its constitu-
tional processes; _
(b) Conduct of the plebiscite referred to in Section 412; and
(c) Approval by the Government of the United States in accor-
dance with its constitutional processes.
Section 412
A plebiscite shall be conducted in each of the Marshall
Islands and the Federated States of Micronesia for the free and
voluntary choice by the peoples of the Trust Territory of the
Pacific Islands of their future political status through informed
and democratic processes. The Marshall Islands and the Federated
States of Micronesia shall each be considered a voting
jurisdiction, and the plebiscite shall be conducted under fair and
equitable standards in each voting jurisdiction. The Administer-
ing Authority of the Trust Territory of the Pacific Islands, after
consultation with the Governments of the Marshall Islands and the
Federated States of Micronesia, shall fix the date on which the
plebiscite shall be called in each voting jurisdiction. The
plebiscite shall be called jointly by the Administering Authority
of the Trust Territory of the Pacific Islands and the other
Signatory Government concerned. The results of the plebiscite in
each voting jurisdiction shall be determined by a majority of the
valid ballots cast in that voting jurisdiction.
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Article II
Conference and Dispute Resolution
Section 421
The Government of the United States shall confer promptly at
the request of the Government of the Marshall Islands or the
Federated States of Micronesia and any of those Governments shall
confer promptly at the request of the Government of the United
States on matters relating to the provisions of this Compact or of
its related agreements.
Section 422
In the event the Government. of the United States, or the
Government of the Marshall Islands or the Federated States of
Micronesia, after conferring pursuant to Section 421, determines
that there is a dispute and gives written notice thereof, the
Governments which are parties to the dispute shall make a good
faith effort to resolve the dispute among themselves.
Section 423
If a dispute between the Government of the United States and
the Government of the Marshall Islands or the Federated States of
Micronesia-cannot be resolved within 90 days of written notifica-
tion in the manner provided in Section 422, either party to the
dispute may refer it to arbitration in accordance with Section 424.
Section 424
Should a dispute be referred to arbitration as provided for in
Section 423, an Arbitration Board shall be established for the
purpose of hearing the dispute and rendering a decision which
shall be binding upon the two parties to the dispute unless the
two parties mutually agree that the decision shall be advisory.
Arbitration shall occur according to the following terms:
(a) An Arbitration Board shall consist of a Chairman and two
other members, each of whom shall be a citizen of a party to the
dispute. Each of the two Governments which is a party to the dis-
pute shall appoint one member to the Arbitration Board. If either
party to the dispute does not fulfill the appointment requirements
of this Section within 30 days of referral of the dispute to arbi-
tration pursuant to Section 423, its member on the Arbitration
Board shall be selected from its own standing list by the other
party to the dispute. Each Government shall maintain a standing
list of 10 candidates. The parties to the dispute shall jointly
appoint a Chairman within 15 days after selection of the other
members of the Arbitration Board. Failing agreement on a Chair-
man, the Chairman shall be chosen by lot from the standing lists
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of the parties to the dispute within 5 days after such failure.
(b) The Arbitration Board shall have jurisdiction to hear and
render its final determination on all disputes arising exclusively
under Articles I, II, III, IV and V of Title One, Title Two, Title
Four and their related agreements.
(c) Each member of the Arbitration Board shall have one vote.
Each decision of the Arbitration Board shall be reached by
majority vote.
(d) In determining any legal issue, the Arbitration Board may
have reference to international law and, in such reference, shall
apply as guidelines the provisions set forth in Article 38 of the
Statute of the International Court of Justice.
(e) The Arbitration Board shall adopt such rules for its
proceedings as it may deem appropriate and necessary, but such
rules shall not contravene the provisions of this Compact. Unless
the parties provide otherwise by mutual agreement, the Arbitration
Board shall endeavor to render its decision within 30 days after
the conclusion of arguments. The Arbitration Board shall make
findings of fact and conclusions of law and its members may issue
dissenting or individual opinions. Except as may be otherwise
decided by the Arbitration Board, one-half of all costs of the
arbitration shall be borne by the Government of the United States
and the remainder shall be borne by the other party to the
dispute.
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4-4
Article III
Amendment
Section 431
The provisions of this Compact may be amended as to the Govern-
ments of the Marshall Islands and the Federated States of Micronesia
and as to the Government of the United States at any time by mutual
agreement.
Section 432
The provisions of this Compact may be amended as to any one of
the Governments of the Marshall Islands or the Federated States of
Micronesia and as to the Government of the United States at any
time by mutual agreement. The effect of any amendment made
pursuant to this Section shall be restricted to the relationship
between the Governments agreeing to such amendment, but the other
Governments signatory to this Compact shall be notified promptly
by the Government of the United States of any such amendment.
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4-5
Article IV
Termination
Section 441
This Compact may be terminated as to any one of the Govern-
ments of the Marshall Islands or the Federated States of Micronesia
and as to the Government of the United States by mutual agreement
and subject to Section 451.
Section 442
This Compact may be terminated by the Government of the United
States as to the Government of the Marshall Islands or the Fed-
erated States of Micronesia subject to Section 452, such termina-
tion to be effective on the date specified in the notice of
termination by the Government of the United States but not earlier
than six months following delivery of such notice. The time
specified in the notice of termination may be extended.
Section 443
This Compact shall be terminated, pursuant to their respective
constitutional processes, by the Government of the Marshall
Islands or the Federated States of Micronesia subject to Section
453 if the -people represented by such Government vote in a plebi-
scite to terminate. Such Government shall notify the Government
of the United States of its intention to call such a plebiscite
which shall take place not earlier than three months after
delivery of such notice. The plebiscite shall be administered by
such Government in accordance with its constitutional and legisla-
tive processes, but the Government of the United States may send
its own observers and invite observers from a mutually agreed
party. If a majority of the valid ballots cast in the plebiscite
favors termination, such Government shall, upon certification of
the results of the plebiscite, give notice of termination to the
Government of the United States, such termination to be effective
on the date specified in such notice but not earlier than three
months following the date of delivery of such notice. The time
specified in the notice of termination may be extended.
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4-6
Article V
Survivability
Section 451
Should termination occur purusant to Section 441, economic
assistance by the Government of the United States shall continue
on mutually agreed terms.
Section 452
(a) Should termination occur pursuant to Section 442, the
following provisions of this Compact shall remain in full force
and effect until the fifteenth anniversary of the effective date
of this Compact between the Government of the United States and
the Government of the Marshall Islands or the Federated States of
Micronesia and thereafter as mutually agreed:
(1) Article VI and Sections 172, 173, 176 and 177 of
Title One;
(2) Article I and Section 233 of Title Two;
(3) Title Three; and
(.4) Articles II, III, V and VI of Title Four.
(b) The Government of the United States shall also provide
the Government as to which termination occurs pursuant to Section
442 with either the programs or services provided pursuant to
Article II of Title Two at the time of termination, or their
equivalent, as determined by the Government of the United States.
Such assistance shall continue until the fifteenth anniversary of
the effective date of this Compact, and thereafter as mutually
agreed.
Section 453
(a) Should termination occur pursuant to Section 443, the
following provisions of this Compact shall remain in full force
and effect until the fifteenth anniversary of the effective date
of this Compact between the Government of the United States and
the Government of the Marshall Islands or the Federated States of
Micronesia and thereafter as mutually agreed:
(1) Article VI and Sections 172, 173, 176 and 177 of
Title One;
(2) Title Three; and
(3) Article II, III, V and VI of Title Four.
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(b) Upon receipt of notice of termination pursuant to
Section 443, the Government of the United States and the Government
so terminating shall promptly consult with regard to their future
relationship. These consultations shall determine the level of
economic assistance which the Government of the United States
shall provide to the Government so terminating for the period
ending on the fifteenth anniversary of the effective date of this
Compact provided that the annual amounts specified in Sections
211, 212, 214, 215 and 216 shall continue without diminution.
Such amounts, with the exception of those specified in Section
216, shall be adjusted according to the formula set forth in
Section 217.
Section 454
Notwithstanding any other provision of this Compact:
(a) The Government of the United States reaffirms its continu-
ing interest in promoting the long-term economic advancement and
self-sufficiency of the peoples of the Marshall Islands and the
Federated States of Micronesia; and
(b) The separate agreements referred to in Article II
of Title Three shall remain in effect in accordance with their
terms which shall also determine the duration of Section 213.
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4-8
Article VI
Definition of Terms
Section 461
For the purpose of this Compact only and without prejudice to
the views of the Government of the United States or the Government
of the Marshall Islands or the Federated States of Micronesia as
to the nature and extent of the jurisdiction under international
law of any of them, the following terms shall have the following
meanings:
(a) "Trust Territory of the Pacific Islands" means the area
established in the Trusteeship Agreement consisting of the admin-
istrative districts of Kosrae, Yap, Ponape, the Marshall Islands
and Truk as described in Title One, Trust Territory Code, Section
1, in force on January 1, 1979. This term does not include the
area of Palau or the Northern Mariana Islands.
(b) "Trusteeship Agreement" means the agreement setting forth
the terms of trusteeship for the Trust Territory of the Pacific
Islands, approved by the Security Council of the United Nations
April 2, 1947, and by the United States July 18, 1947, entered into
force July 18, 1947, 61 Stat. 3301, T.I.A.S. 1665, 8 U.N.T.S. 189.
(c) "The Marshall Islands" and "the Federated States of
Micronesia" are used in a geographic sense and include the land
and water areas to the outer limits of the territorial sea and the
air space above such areas as now or hereafter recognized by the
Government of the United States.
(d) "Government of the Marshall Islands" means the Government
established and organized by the Constitution of the Marshall
Islands including all the political subdivisions and entities
comprising that Government.
"Government of the Federated States of Micronesia" means
the Government established and organized by the Constitution of
the Federated States of Micronesia including all the political
subdivisions and entities comprising that Government.
(e) The following terms shall be defined consistent with the
1976 Edition of the Radio Regulations of the International Tele-
communications Union (ISBN 92-61-0081-5) as follows:
(1) "Radio Communications" means telecommunication by
means of radio waves.
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(2) "Station" means one or more transmitters or
receivers or a combination of transmitters and
receivers, including the accessory equipment,
necessary at one location for carrying on a radio
communication service; each station shall be
classified by the service in which it operates
permanently or temporarily.
(3) "Broadcasting Service" means a radio communication
service in which the transmissions are intended for
direct reception by the general public, and which
may include sound transmissions, television
transmissions or other types of transmissions.
(4) "Broadcasting Station" means a station in the
broad c-asting service.
(f) "Frequency Assignment" means the same as 'Frequency Assign-
ment' means in the 1976 Edition of the Radio Regulations of the
International Telecommunications Union (ISBN 92-61-0081-5).
(g) "Habitual Residence" means a place of general abode or a
principal, actual dwelling place of a continuing or lasting nature;
provided, however, that this term shall not apply to the residence
of any person who entered the United States for the purpose of
full-time studies as long as such person maintains that status, or
who has been physically present in the United States, the Marshall
Islands or the Federated States of Micronesia for less than one
year, or who is a dependent of a resident representative, as
described in Section 152.
(h) For the purposes of Article IV of Title One of this Compact:
(1) "Actual Residence" means physical presence in the
Marshall Islands or the Federated States of
Micronesia during eighty-five percent of the period
of residency required by Section 141(a)(3); and
(2) "Certificate of Actual Residence" means a
certificate issued to a naturalized citizen by the
Government which has naturalized him stating that
the citizen has complied with the actual residence
requirement of Section 141(a)(3).
(i) "Military Areas and Facilities" means those areas and
facilities in the Marshall Islands or the Federated States of
Micronesia reserved or acquired by the Government of the Marshall
Islands or the Federated States of Micronesia for use by the
Government of the United States, as set forth in the separate
agreements referred to in Section 321.
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(j) "Capital Account" means, for each year of the Compact,
those portions of the total grant assistance provided in Article
I of Title Two, adjusted by Section 217, which are to be obligated
for:
(1) the construction or major repair of capital
infrastructure; or
(2) public and private sector projects identified in the
official overall economic development plan.
(k) "Current Account" means, for each year of the Compact,
those portions of the total grant assistance provided in Article I
of Title Two, adjusted by Section 217, which are to be obligated
for recurring operational activities including infrastructure
maintenance as identified in the annual budget justifications
submitted yearly to the Government of the United States.
(1) "Official Overall Economic Development Plan" means the
documented program of annual development which identifies the
specific policy and project activities necessary to achieve a
specified set of economic goals and objectives during the period
of free association, consistent with the economic assistance
authority in Title Two. Such a document should include an
analysis of population trends, manpower requirements, social
needs, gross national product estimates, resource utilization,
infrastructure needs and expenditures, and the specific private
sector projects required to develop the local economy of the
Marshall Islands or the Federated States of Micronesia. Project
identification should include initial cost estimates, with project
purposes related to specific development goals and objectives.
(m) "Tariff Schedules of the United States" means the Tariff
Schedules of the United States as amended from time to time and as
promulgated pursuant to United States law and includes the Tariff
Schedules of the United States Annotated (TSUSA), as amended.
(n) "Vienna Convention on Diplomatic Relations" means the
Vienna Convention on Diplomatic Relations, done April 18, 1961, 23
U.S.T. 3227, T.I.A.S. 7502, 500 U.N.T.S. 95.
Section 462
The Government of the United States and the Government of the
Marshall Islands or the Federated States of Micronesia, as
appropriate, shall conclude related agreements which shall come
into effect and shall survive in accordance with their terms, as
follows:
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(a) Agreement Regarding the Provision of Telecommunication
Services by the Government of the United States to the Marshall
Islands and the Federated States of Micronesia Concluded Pursuant
to Section 131 of the Compact of Free Association;
(b) Agreement Regarding the Operation of Telecommunication
Services of the Government of the United States in the Marshall
Islands and the Federated States of Micronesia Concluded Pursuant
to Section 132 of the Compact of Free Association;
(c) Agreement on Extradition, Mutual Assistance in Law
Enforcement Matters and Penal Sanctions Concluded Pursuant to
Section 175 of the Compact of Free Association;
(d) Agreement Between the Government of the United States
and the Government of the Marshall Islands for the Implementation
of Section 177 of the Compact of Free Association;
(e) Federal Programs and Services Agreement Concluded Pursuant
to Article II of Title Two and Section 232 of the Compact of Free
Association;
(f) Agreement Concluded Pursuant to Section 234 of the Compact
of Free Association;
(g) Agreement Regarding the Military Use and Operating Rights of
the Government of the United States in the Marshall Islands Concluded
Pursuant to Sections 321 and 323 of the Compact of Free Association;
(h) Agreement Regarding the Military Use and Operating Rights of
the Government of the United States in the Federated States of
Micronesia Concluded Pursuant to Sections 227, 321 and 323 of the
Compact of Free Association;
(i) Status of Forces Agreement Concluded Pursuant to Section
323 of the Compact of Free Association;
(j) Agreement Between the Government of the United States and
the Government of the Federated States of Micronesia Regarding
Friendship, Cooperation and Mutual Security Concluded Pursuant to
Sections 321 and 323 of the Compact of Free Association; and
(k) Agreement Between the Government of the United States and
the Government of the Marshall-Islands Regarding Mutual Security
Concluded Pursuant to Sections 321 and 323 of the Compact of Free
Association.
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Section 463
(a) Except as set forth in Section 463(b), any reference in
this Compact to a provision of the United States Code or the
Statutes at Large of the United States constitutes the incorpora-
tion of the language of such provision into this Compact, as such
provision was in force on January 1, 1980.
(b) Any reference in Article VI of Title One and Sections 131,
174, 175, 178 and 342 to a provision of the United States Code or
the Statutes at Large of the United States or to the Privacy Act,
the Freedom of Information Act or the Administrative Procedure Act
constitutes the incorporation of the language of such provision
into this Compact as such provision is in force on the effective
date of this Compact or as it may be amended thereafter on a
non-discriminatory basis according to the constitutional processes
of the United States.
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4-13
Article VII
Concluding Provisions
Section 471
(a) The Government of the United States and the Governments
of the Marshall Islands and the Federated States of Micronesia
agree that they have full authority under their respective
Constitutions to enter into this Compact and its related agree-
ments and to fulfill all of their respective responsibilities in
accordance with the terms of this Compact and its related
agreements. The Governments pledge that they are so committed.
(b) Each of the Governments of the United States, the
Marshall Islands and the Federated States of Micronesia shall take
all necessary steps, of a general or particular character, to
ensure, not later than the effective date of this Compact, the
conformity of its laws, regulations and administrative procedures
with the provisions of this Compact.
(c) Without prejudice to the effects of this Compact under
international law, this Compact has the force and effect of a
statute under the laws of the United States.
Section 472
This Compact may be accepted, by signature or otherwise, by
the Government of the United States, the Government of the
Marshall Islands, and the Government of the Federated States of
Micronesia. Each Government accepting this Compact shall possess
an original English language version.
IN WITNESS WHEREOF, the undersigned, duly authorized, have
signed this Compact of Free Association which shall come into
effect in accordance with its terms between the Government of the
United States and each of the other Governments signatory to this
Compact.
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DONE AT HONOLULU, HAWAII, THIS 1st DAY
OF OCTOBER, ONE THOUSAND, NINE HUNDRED EIGHTY-TWO
FOR THE GOVERNMENT
OF
THE UNITED STATES OF AMERICA
AMBASSADOR FRED M. ZEDER, II
PRESIDENT'S PERSONAL REPRESENTATIVE
FOR MICRONESIAN STATUS NEGOTIATIONS
DONE AT HONOLULU, HAWAII, THIS 1st DAY
OF OCTOBER, ONE THOUSAND, NINE HUNDRED EIGHTY-TWO
FOR THE GOVERNMENT
OF
THE FEDERATED STATES OF MICRONESIA
HONORABLE ANDON L. AMARAICH
CHAIRMAN COMMISSION ON FUTURE
POLITICAL STATUS AND TRANSITION
DONE AT MAJURO, MARSHALL ISLANDS, THIS 25th DAY
OF-JUNE, ONE THOUSAND, NINE HUNDRED EIGHTY-THREE
FOR THE GOVERNMENT
OF
THE UNITED STATES OF AMERICA
AMBASSADOR FRED M. ZEDER, II
PRESIDENT'S PERSONAL REPRESENTATIVE
FOR MICRONESIAN STATUS NEGOTIATIONS
DONE AT MAJURO, MARSHALL ISLANDS, THIS 25th DAY
OF JUNE, ONE THOUSAND, NINE HUNDRED EIGHTY-THREE
FOR THE GOVERNMENT
OF
THE MARSHALL ISLANDS
PRESIDENT AMATA KABUA
PRESIDENT OF THE REPUBLIC
OF THE MARSHALL ISLANDS
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(a) The defense sites of the United States established in
the Federated States of Micronesia, or the Marshall Islands in
accordance with the Compact of Free Association are within the
special maritime and territorial jurisdiction of the United States
as set forth in Section 7, Title 18, United States Code.
(b) A citizen, national or resident alien of the United
States who, while within or upon the defense sites in the
Federated States of Micronesia or the Marshall Islands is guilty
of any act or omission which would be punishable by any enactment
of Congress or by the laws of the State of Hawaii in force at the
time of such act or omission, shall be guilty of a like offense
and subject to a like punishment and the United States District
Court for the District of Hawaii shall have jurisdiction to try
all criminal offenses against such laws.
(c) Magistrates appointed by the United States Court for
the District of Hawaii, pursuant to chapter 43, Title 28, United
States Code, shall have the power to try persons accused of and
sentence persons convicted of petty offenses, as defined in
section 1(3), Title 18, United States States Code, and including
violations of regulations issued by the Commanding Officer of such
defense sites, without being subject to the restrictions provided
for in section 3401(b), Title 18, United States Code.
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