Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698746737564.pdf (Micronesia, Federated States of)
TWENTY-FIRST CONGRESS OF THE FEDERATED STATES OF MICRONESIA SEVENTH SPECIAL SESSION, 2020 C.B.

NO.

21-176 A BILL FOR AN ACT To amend chapter 3 of title 21 of the Code of the Federated States of Micronesia (Annotated), by adding new sections 392, 393, 394, 395, and 396, in order to effectuate the transfer of the assets and liabilities of the Corporation in the HANTRU-1 cable system and Pohnpei extension to the Open Access Entity, and for other purposes.
BE IT ENACTED BY THE CONGRESS OF THE FEDERATED STATES OF MICRONESIA: 1 Section 1.

Chapter 3 of title 21 of the Code of the 2 Federated States of Micronesia (Annotated), is hereby amended by 3 adding a new section 392, to read as follows: “Section 392.

Definitions.
In sections 393 and 395, unless the context otherwise required: (a) ‘assets’ without limitation, includes: (i) any estate or interest in any land or building, including all rights of access over, occupation or use of such land or building; and (ii) all rights of any kind including powers, privileges, interests, leases, licenses, approvals, consents, designations, authorizations, benefits, and equities of any kind, whether actual, contingent, or prospective; (b) ‘liabilities’ includes: (i) liabilities or obligations under any agreement; (ii) debt; CBL 21-288/PC #21-371 C.B.
NO.

21-176 1 2 3 4 (iii) contingent liabilities; and (iv) interests of any kind in any of the foregoing.

Section 2.

Chapter 3 of title 21 of the Code of the 5 Federated States of Micronesia (Annotated) is hereby amended by 6 adding a new section 393, to read as follows: “Section 393.

Transfer of the HANTRU-1 cable system and Pohnpei extension to the Open Access Entity.
(1) The Secretary shall compile a certificate: (a) listing all the assets and liabilities of the Corporation in the HANTRU-1 cable system and Pohnpei extension for the purpose of transferring these assets and liabilities to the Open Access Entity; (b) containing a description of any new legal arrangements to be entered into between the Open Access Entity and the Corporation that the Secretary considers is necessary or desirable to give effect to either the transfer of the assets and liabilities of the Corporation in the HANTRU-1 cable system and Pohnpei extension or the practical operation of any ancillary services that relate to the assets and liabilities of the Corporation in the HANTRU-1 cable system and Pohnpei extension including any shared access rights to building or plant or the supply of utility services to such building or plant; 2 of 13 C.B.
NO.

21-176 (c) containing or attaching legal instruments or agreements to give effect to any arrangements described in paragraph (b).
(2) The certificate compiled under subsection (1) shall contain a vesting date or method for calculating such a date, being the date on which: (a) such assets and liabilities shall cease to be assets and liabilities of the Corporation and become assets and liabilities of the Open Access Entity; and (b) any such legal instruments or agreements described in subsection (1)(c) shall have effect in accordance with their terms on the Corporation and the Open Access Entity.
(3) As soon as practicable the Secretary shall provide a draft copy of the certificate compiled under subsection (1) to: (a) the Chair of the Board of the Corporation; (b) the Chair of the Board of the Open Access Entity; and (c) the Chair of the Telecommunications Regulatory Authority.
(4) The persons listed in subsection (3) shall have 30 days, or such other later date as the Secretary may specify, from receipt of the draft certificate to provide a written submission to the Secretary on 3 of 13 C.B.

NO.
NO.

21-176 whether: (a) the description of the assets and liabilities contained in the draft certificate appropriately describe the assets and liabilities of the Corporation in the HANTRU-1 cable system and Pohnpei extension; (b) the legal instruments or agreements contained in, or attached to, the draft certificate appropriately describe and regulate the ongoing arrangements between the parties.
(5) The Secretary may have regard to the submissions made under subsection (4) and may make such changes to the certificate as the Secretary considers necessary or desirable.

(6) The Secretary shall not issue the final certificate without first obtaining any required written consent for the transfer of the assets and liabilities listed in the certificate from the United States Rural Utilities Service.
(7) The Secretary shall use all reasonable endeavors to obtain any required written consent under subsection (6), after the effective date of this section.

(8) The Secretary shall issue the final certificate by publishing it on the website of the Department of Transport, Communications and Infrastructure and provide 4 of 13 C.B.

NO.

21-176 a copy to the persons listed in subsection (3).
(9) The assets and liabilities referred to in the certificate compiled under subsection (1) or issued under subsection (8) may be described specifically or by class, and no objection shall be taken in any court to the accuracy or completeness of such description.
(10) On the vesting date: (a) the Corporation shall cease to have any rights or interests in, or obligations regarding, the assets and liabilities listed in the certificate issued under subsection (8); (b) the Open Access Entity shall assume all the assets and liabilities listed in the certificate issued under subsection (8); (c) any legal instruments or agreements listed in, or attached to, the certificate issued under subsection (8) shall bind the Corporation and the Open Access Entity and have effect in accordance with its terms as if the agreement was entered into validly by the Corporation and the Open Access Entity in accordance with any requirements of the Corporation and the Open Access Entity or any law; and (d) the Deed granting an indefeasible right of use between the Corporation and the Open Access Entity dated 25 January 2018, and any subsequent amendments to 5 of 13 C.B.
NO.

21-176 that Deed, shall cease to have effect.

Any rights and obligations held or incurred by or to any party to the Deed up to the vesting date shall continue to be enforceable in accordance with the terms of the Deed except that any dispute relating to payments under the Deed shall be subject to section 394.

Section 3.
Section 3.

Chapter 3 of title 21 of the Code of the 8 Federated States of Micronesia (Annotated), is hereby amended by 9 adding a new section 394, to read as follows: “Section 394.

Disputes to be determined by the Secretary.
(1) Any dispute relating to the Deed described in section 393(10)(d) and that exists between the Open Access Entity and the Corporation as at the date the Secretary issues a draft certificate under section 393 shall be determined by the Secretary as follows: (a) The parties shall have 10 days from the date the Secretary issues the draft certificate to provide the Secretary with written submissions on the dispute; (b) The Secretary may consider the issues raised by reference to the written submissions only; (c) The Secretary shall issue a decision in writing in respect of the dispute no later than 30 days from the date the Secretary issues the draft certificate, or such other later date as the Secretary 6 of 13 C.B.
NO.

21-176 may specify, by giving the decision to the Chair of the Board of the Corporation and the Chair of the Board of the Open Access Entity.

(2) The decision shall be final and binding on the parties in accordance with its terms.

(3) Any payment required to be made one party to the other as a result of the Secretary’s decision, shall be: (a) made no later than 20 days after the Secretary issues a decision; (b) shall be recoverable as a debt.
(4) A failure by one party to make a submission in accordance with subsection (1)(a) shall not delay, prevent nor invalidate the Secretary’s decision under subsection (1)(c).

(5) Any terms of the Deed relating to disputes and dispute resolution between the parties shall not apply to a dispute that is subject to section 394.” Section 4.
Chapter 3 of title 21 of the Code of the 19 Federated States of Micronesia (Annotated) is hereby amended by 20 adding a new section 395, to read as follows: “Section 395.

Secretary’s power to negotiate.

(1) In order to facilitate or give effect to any arrangement that the Secretary considers is necessary or desirable to enable the transfer of the assets and liabilities of the Corporation in the HANTRU-1 cable 7 of 13 C.B.

NO.
21-176 system and Pohnpei extension, or to address the impact on the Corporation or a creditor of the Corporation due to the proposed transfer of the assets and liabilities of the Corporation in the HANTRU-1 cable system and Pohnpei extension, the Secretary, or any authorized representative of the Secretary, may undertake any one or more of the following: (a) negotiate with, and enter into any agreement with, any party including the United States Rural Utilities Service or any other creditor of the Corporation for the purposes of restructuring any lending arrangements with the Corporation; and (b) enter into new financing arrangements with any person for the purposes of refinancing any existing lending arrangements of the Corporation; (c) enter into any other agreement the Secretary considers necessary or desirable to give effect to such transfer or to address such impact of the transfer.
(2) In order to perform any of the functions listed in subsection (1), the Secretary, or any authorized representative of the Secretary, may act as the authorized representative for the Corporation and the following shall apply: (a) the Secretary, or any authorized representative of the Secretary, may do so without any 8 of 13 C.B.

NO.
21-176 authority from the Corporation or any other person; (b) the Secretary, or any authorized representative of the Secretary, may request information from the Corporation or action to be taken by the Corporation or cease to be taken, including the time period for responding to such matters, and the Corporation shall provide any information requested or take or cease to take any action requested in accordance with any required time period; (c) a party dealing with the Secretary, or any authorized representative of the Secretary, need not inquire as to the concurrence of the Corporation and may rely on the Secretary, or any authorized representative of the Secretary, as an authorized representative for the Corporation even if the Corporation informs that party that the Corporation has not concurred; (d) any agreement reached by the Secretary, or any authorized representative of the Secretary, when performing any of the functions listed in subsection (1) shall bind the Corporation as if the agreement was entered into validly by the Corporation and in accordance with any requirements of the Corporation or any law.
(3) If the Secretary, or any authorized representative of the Secretary, enters into an 9 of 13 C.B.

NO.
NO.

21-176 agreement on behalf of the Corporation under this section, the Secretary shall: (a) notify the Chair of the Board of the Corporation that an agreement binding the Corporation has been entered into; and (b) provide the Chair of the Board of the Corporation with a copy of that agreement.

(4) The Corporation shall, on receipt of an agreement provided under subsection (3)(b), give effect to the terms of that agreement.
(5) No court shall set aside an agreement entered into by the Secretary, or an authorized representative of the Secretary, on behalf of the Corporation on the grounds that it was entered into by the Secretary, or an authorized representative of the Secretary, under this section or that subsection (3) was not complied with.
(6) Any agreement entered into by the Secretary, or any authorized representative of the Secretary, under this section that involves the restructuring of the Corporation’s debt, to the extent that it constitutes the assuming of debt, a lien or other security interests of the Corporation of the type described in section 231(5), shall not be subject to the requirements of section 231(5).” Section 5.

Chapter 3 of title 21 of the Code of the 10 of 13 C.B.

NO.
NO.

21-176 1 Federated States of Micronesia (Annotated) is hereby amended by 2 inserting a new section 396, to read as follows: “Section 396.

Obligations of the Open Access Entity and the Corporation.

(1) On and from the vesting date established under section 393, the following provisions shall apply.
(2) For as long as the Corporation is the only telecommunications service provider using the Open Access Entities services, the Open Access Entity shall: (a) supply to the Corporation, and the Corporation shall purchase from the Open Access Entity, all of the primary international and interstate capacity requirements of the Corporation to the extent of the Open Access Entity’s rights and available capacity; and (b) charge to the Corporation on cost-based terms in accordance with section 389(2) of this Act, and the Corporation shall pay such charge to the Open Access Entity, on such periodic basis as the Open Access Entity determines.
(3) At such a time as the Open Access Entity begins supplying services to one or more licensed telecommunications service providers (other than the Corporation) then the following shall apply: (a) such services shall be supplied by the Open Access Entity on a non-discriminatory basis between the 11 of 13 C.B.

NO.
21-176 Corporation and each other licensed telecommunications service provider; (b) the Open Access Entity shall charge licensed telecommunications service providers on cost-based terms in accordance with section 389(2) of this Act and on such periodic basis as the Open Access Entity determines; (c) the allocation of the Open Access Entity’s costs between the Corporation and each other licensed telecommunications service provider shall be done on equitable terms, while avoiding the Open Access Entity incurring any loss; and (d) each licensed telecommunications service provider shall pay the amount charged to the Open Access Entity.
(4) The arrangements set out in section 396, and such other arrangements between the Open Access Entity and the licensed telecommunications service providers, shall otherwise be subject to the oversight of the Authority.

(5) All payments required to be made under this section shall be recoverable as a debt.” 12 of 13 C.B.

NO.

21-176 1 Section 6.


This act shall become law upon approval by the 2 President of the Federated States of Micronesia or upon its 3 becoming law without such approval.

4 5 Date: 8/18/20 Introduced by: /s/ Florencio S. Harper Florencio S. Harper (by request) 13 of 13