Palau Compact of Free Association Act
PL 99-658 (H.J.Res.626), enacted 11/14/1986

100 STAT. 3672 
PUBLIC LAW 99-658—NOV. 14, 1986 
Public Law 99-658 
99th Congress 
Joint Resolution 
Nov. 14, 1986 
[H.J. Res. 626] 
Trust Territory 
of the Pacific 
Islands. 
Micronesia. 
Marshall 
Islands. 
International 
Eigreements. 
61 Stat. 3301. 
United Nations. 
59 Stat. 1031. 
Post, p. 3678. 
48 u s e 1681 
note. 
To approve the "Compact of Free Association" between the United States and the 
Government of Palau, 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 Is-
lands 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 develop-
ment of the peoples of the Trust Territory toward self-government 
or independence as appropriate to the particular cicumstances 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 people 
of Palau expressed through their freely-elected representatives 
and by the official pronouncements and enactments of their law-
fully constituted government, and in consideration of its own 
obligations under the Trusteeship Agreement to promote self-
determination, entered into political status negotiations with rep-
resentatives of the people of Palau; and 
Whereas these negotiations resulted in the "Compact of Free 
Association" between the United States and Palau which, to-
gether with its related agreements, was signed by the United 
States and by Palau on January 10,1986; and 
Whereas the Compact of Free Association received a favorable vote 
of a majority of the people of Palau voting in a United Nations-
observed plebiscite conducted on February 21,1986; and 
Whereas the Supreme Court of Palau has ruled that the constitu-
tional process of Palau for approval of the Compact of Free 
Association in accordance with section 411 of the Compact has not 
yet been completed; and 
Whereas the President of Palau has requested the United States to 
complete the process of United States approval of the Compact of 
Free Association in accordance with section 411 of the Compact 
through enactment of an appropriate joint resolution: Now, there-
fore, be it 
Resolved by the Senate and House of Representatives of the United 
States of 
America in Congress assembled. 
<?:'«->'•! 
0fi 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3673 
TITLE I—APPROVAL OF COMPACT; INTERPRETATION OF, 
AND UNITED STATES POLICIES REGARDING, COMPACT; 
SUPPLEMENTAL PROVISIONS 
APPROVAL OF COMPACT OF FREE ASSOCIATION 
SEC. 101. (a) APPROVAL.—The Compact of Free Association set 
48 use I68i 
forth in title II of this joint resolution between the United States 
note. 
and the Government of Palau is hereby approved, and Congress 
hereby consents to the agreements as set forth on pages 154 through 
405 of House Document 99-193 of April 9, 1986 (hereafter in this 
joint resolution referred to as subsidiary or related agreements), as 
they relate to such Government. Subject to the provisions of this President of U.S. 
joint resolution, the President is authorized to agree, in accordance 
with section 411 of the Compact, to an effective date for and 
thereafter to implement such Compact, having taken into account 
any procedures with respect to the United Nations for termination 
of the Trusteeship Agreement. 
(b) REFERENCE TO THE COMPACT.—Any reference in this joint 
m r c
« i- 'f; 
resolution to the "Compact" shall be treated as a reference to 
the Compact of Free Association set forth in title II of this joint 
resolution. 
(c) AMENDMENT, CHANGE, OR TERMINATION OF THE COMPACT AND 
CERTAIN AGREEMENTS.—(1) Mutual agreement by the Government 
of the United States as provided in the Compact which results in 
amendment, change, or termination of all or any part thereof shall 
be affected only by Act of Congress and no unilateral action by the 
Government of the United States provided for in the Compact, and 
having such result, may be effected other than by Act of Congress. 
(2) The provisions of paragraph (1) shall apply— 
(A) to all actions of the Government of the United States 
under the Compact including, but not limited to, actions taken 
pursuant to sections 431, 432, 441, or 442; 
(B) to any amendment, change, or termination in any agree-
ment that may be concluded at any time between the Grovern-
ment of the United States and the Government of Palau regard-
ing friendship, cooperation and mutual security concluded 
pursuant to sections 321 and 323 of the Compact referred to in 
section 462(h); 
" 
'
^
^ 
(C) to any amendment, change, or termination of the agree-
ments concluded pursuant to Compact sections 175 and 
221(aX4), the terms of which are incorporated by reference into 
the Compact; and 
(D) to the following subsidiary agreements, or portions 
' 
thereof: 
(i) Article II of the agreement referred to in section 462(a) 
r i s r 
of the Compact; 
(ii) Article II of the agreement referred to in section 
ii9-}i 
462(b) of the Compact; 
(iii) Article II and Section 7 of Article X of the agreement 
^ • ' 
referred to in section 462(f) of the (Dompact; 
(iv) the £^eement referred to in section 462(g) of the 
' 
•• 
Compact; 
(v) Articles II, III, IV, V, VI, and VII of the agreement 
referred to in section 462(h) of the Compact; and 
; 
(vi) Articles VI, XV, and XVII of the agreement referred 
? 
to in section 462(i) of the Compact. 
lOa STAT. 3674 
PUBLIC LAW 99-658—NOV. 14, 1986 
President of U.S. 
(d) EFFECTIVE DATE.—(1) The authority of the President to agree to 
Post, p. 3679. 
an effective date for the Compact of Free Association between the 
United States and Palau concurrently with termination of the 
Trusteeship shall be carried out in accordance with this section, and 
the Compact shall not take effect until after— 
(A) The President has certified to the Congress that the 
i
;
H ilf? ) 
Compact has been approved in accordance with Section 411 (a) 
and (b) of the Compact, and that there exists no legal impedi-
ment to the ability of the United States to carry out fully its 
responsibilities and to exercise its rights under Title Three of 
the Compact, as set forth in this Act, and 
(B) enactment of a joint resolution which has been reported by 
I ;o r. •'..^T*] 
the Committee on Energy and Natural Resources of the Senate 
and the Committees on Interior and Insular Affairs and Foreign 
Affairs and other appropriate Committees of the House of 
Representatives authorizing entry into force of the Compact, 
and 
(C) agreements have been concluded with Palau which satisfy 
99 Stat. 1775. 
' 
the requirements of Section 102 of Public Law 99-239. For the 
purpose of this subsection the word "Palau" shall be substituted 
for "Federated States of Micronesia" whenever it appears in 
Section 102 of Public Law 99-239. 
(2) Any agreement concluded with Palau pursuant to subpara-
graph 101(dXl)(C) of this title and any agreement which would 
amend, change, or terminate any subsidiary agreement or related 
agreement, or portion thereof, as set forth in paragraph (4) of this 
subsection shall be submitted to the Congress. No such agreement 
shall take effect until after the expiration of 30 days after the date 
such agreement is so submitted (excluding days on which either 
House of Congress is not in session). 
(3) No agreement described in paragraph (2) shall take effect if a 
joint resolution of disapproval is enacted during the period specified 
in paragraph (2). For the purpose of expediting the consideration of 
such a joint resolution, a motion to proceed to the consideration of 
any such joint resolution after it has been reported by an appro-
priate committee shall be treated as highly privileged in the House 
of Representatives. Any such joint resolution shall be considered in 
the Senate in accordance with the provisions of section 601(b) of 
90 Stat. 765. 
Public Law 94-329. 
(4) The subsidiary agreement of portions thereof referred to in 
paragraph (2) are as follows: 
(A) Articles III and IV of the agreement referred to in section 
462(b) of the Compact. 
S
I
T 
(B) Articles III, IV, V, VI, VII, VIII, IX, and X (except for 
section 7 thereof) of the agreement referred to in section 462(f) 
of the Compact. 
(C) Articles IV, V, X, XIV, XVI, and XVIII of the agreement 
urn referred to in section 462(i) of the Compact. 
(D) Articles II, V, VI, VII, and VIII of the agreement referred 
to in section 462(h) of the Compact. 
(E) The agreement referred to in section 462(j) of the Compact. 
President of U.S. 
(5) No agreement between the United States and the Government 
of Palau which would amend, change, or terminate any subsidiary 
or related agreement, or portion thereof, other than those set forth 
in subsection (d) of this section or paragraph (4) of this subsection, 
shall take effect until the President has transmitted such an agree-
ment to the President of the Senate and the Speaker of the House of 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3675 
Representatives, together with an explanation of the agreement and 
the reasons therefor. 
EXTENSION OF COMPACT OF FREE ASSOCIATION TO PALAU 
SEC. 102. (a) The interpretation of and United States Policy 
Regarding the Compact of Free Association set forth in section 104 
of Public Law 99-239 shall apply to the Compact of Free Association 
with Palau. 
(b) The provisions of section 105, except for subsection (i), section 
106, section 110, and section 111 (a) and (d) of Public Law 99-239, as 
amended, shall apply to Palau in the same manner and to the same 
extent as such sections apply to the Marshall Islands. 
REPEAL OF TITLE V OF THE COMPACT OF FREE ASSOCIATION ACT (PUBUC 
LAW 99-239) 
SEC. 103. Title V of the Public Law 99-239 is repealed. 
SUPPLEMENTAL PROVISIONS 
48 u s e 1681 
note. 
48 u s e 1681 
note. 
48 u s e 1681 
note. 
SEC. 104. (a) CIVIC ACTION TEAMS.—In recognition of the special 
development needs of Palau and the Marshall Islands, the United 
States shall make available United States military Civic Action 
Teams for use in Palau or the Marshall Islands under terms and 
conditions mutually agreed upon by the Government of the United 
States and the Governments of Palau or the Marshall Islands, as 
appropriate. The Government of Palau may use the amount of 
^^, 
$250,000 annually from current account funds provided pursuant to 
section 211 of the Compact to defray expenditures attendant to the 
operation of the Civic Action Teams made available pursuant to this 
subsection. The Government of the Marshall Islands may use the 
amount of $250,000 annually from current account funds provided 
under section 211 of Title Two of the Compact of Free Association 
Post, p. 3687 
with the Marshall Islands to defray expenditures attendant to the 
operation of the Civic Action Teams made available pursuant to this 
subsection. 
Qo) INVENTORY AND STUDY OF NATURAL, HISTORIC, AND OTHER 
RESOURCES.—The Secretary of the Interior shall conduct, upon re-
quest of Palau, the Federated States of Micronesia or the Marshall 
Islands, and through the Director of the National Park Service, a 
comprehensive inventory and study of the most unique and signifi-
cant natural, historical, cultural, and recreational resources of 
Palau, the Federated States of Micronesia or the Marshall Islands. 
Areas or sites exhibiting such qualities shall be described and 
evaluated with the objective of the preservation of their values and 
their careful use and appreciation by the public, along with a 
determination of their potential for attracting tourism. Alternative 
methodologies for such preservation and use shall be developed for 
each area or site (including continued assistance from the National 
Park Service); current or impending damage or threats to the 
resources of such areas or sites shall be identified and evaluated; 
and authorities needed to properly protect and allow for public use 
and appreciation shall be identified and discussed. Such inventory 
and study shall be conducted in full cooperation and consultation 
with affected governmental officials and the interested public. A full 
report on such inventory and study shall be transmitted to Palau or 
the Federated States of Micronesia or the Marshall Islands, the 
Historic 
preservation. 
Cultural 
programs. -
Reports. 
100 STAT. 3676 
PUBLIC LAW 99-658—NOV. 14, 1986 
48 use 1681 
note. 
Reports. 
President of U.S. 
Ck)ntracts. 
Energy. 
48 u s e 1681 
note. 
99 Stat. 1037; 
ante, p. 773. 
Committee on Interior and Insular Affairs of the United States 
House of Representatives and the Committee on Energy and 
Natural Resources of the United States Senate no later than two 
complete calendar years after the date of enactment of this joint 
resolution. The inventory and study shall also identify areas or sites 
which, if they were located in the United States, would qualify to be 
listed on the Registry of Natural Landmarks and the National 
Register of Historic Places. 
(c) AUTHORIZATION FOR TRANSITION PURPOSES.—Section 105(c)(2) of 
Public Law 99-239 is amended by deleting "infrastructure." and 
inserting in lieu thereof "infrastructure, except that, for purposes of 
an orderly reduction of United States programs and services in the 
Federated States of Micronesia, the Marshall Islands, and Palau, 
United States programs or services not specifically authorized by 
the Compact of Free Association or by other provisions of law may 
continue but, unless reimbursed by the respective freely associated 
state, not in excess of the following amounts: 
"(1) For fiscal year 1987, an amount not to exceed 75 per 
centum of the total amount appropriated for such programs for 
fiscal year 1986; 
"(2) For fiscal year 1988, an amount not to exceed 50 per 
centum of the total amount appropriated for such programs for 
fiscal year 1986; 
"(3) For fiscal year 1989, an amount not to exceed 25 per 
centum of the total amount appropriated for such programs for 
fiscal year 1986.". 
(d) PELEUU AND ANGAUR.—Not later than one year after the date 
of enactment of this joint resolution, the Secretary of Agriculture, 
after appropriate studies conducted in consultation with the Govern-
ment of Palau, shall report to the President and the Congress 
concerning the feasibility and cost of rehabilitating and restoring 
the fertility of the topsoil of the islands of Peleliu and Angaur. 
Upon the request of the Government of Palau, the President shall 
make the report of the Secretary of Agriculture available to the 
Government of Palau. Technical assistance to accomplish such re-
habilitation and restoration, if feasible, may be provided to the 
Government of Palau on a nonreimbursable basis, subject to the 
availability of appropriated funds. 
(e) Neither the Secretary of the Treasury nor any other officer or 
agent of the United States shall pay or transfer any portion of the 
sums and amounts payable to the Government of Palau pursuant to 
this joint resolution to any party other than the Government of 
Palau. The provisions of section 174(a) of the Compact shall apply 
with respect to any action based on a contract or debt related to any 
electrical generating plant or related facilities entered into or 
incurred by Palau prior to the date of enactment of this joint 
resolution. 
(f) Amounts appropriated to be paid pursuant to section 177 of 
Article I of Title One or Articles I and III of Title Two of the 
Compact of Free Association with the Federated States of Microne-
sia and the Marshall Islands, as set forth in Title II of the Compact 
of Free Association Act of 1985, or pursuant to section 103(h), 103(k), 
or 105(m) of such Act (Public Law 99-239), or pursuant to Article I of 
Title Two of the Compact with Palau, as set forth in Title II of this 
joint resolution, or section 104(/) of this joint resolution shall not be 
reduced, notwithstanding Public Law 99-177, Public Law 99-366, 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3677 
and other law enacted to implement Public Law 99-177, or any 
other provision of law. 
(g) The Congress reaffirms all of the understandings, interpreta-
tions, and policy statements contained in Public Law 99-239 (99 
Stat. 1770). Congressional Resolution 4-60 adopted by the 4th Con-
gress of the Federated States of Micronesia on March 26, 1986 and 
Resolution No. 62 adopted by the Nitijela of the Marshall Islands on 
February 18, 1986 do not exclude, limit or modify any provision of 
the Compact of Free Association as approved by the United States. 
To the extent that any understandings, interpretations, and policy 
statements contained in such Resolutions are inconsistent with the 
provisions of Public Law 99-239, the United States does not concur 
therein. The President shall take such steps, including but not 
limited to, communicating with the Governments of the Federated 
States of Micronesia and the Republic of the Marshall Islands, as 
may be necessary to preserve all rights of the United States in 
connection with interpretation and implementation of such Public 
Law. 
(h) ADDITIONAL PROVISIONS RELATING TO TITLE THREE OF THE 
COMPACT.— 
(1) The Government of the United States recognizes and 
respects the scarcity and special importance of land in Palau. In 
making any designation of land pursuant to section 322 of the 
Compact, 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 the requirement 
through public real property, where available, rather than 
through private real property. 
(2) The Armed Forces of other nations invited to use military 
areas and facilities in Palau pursuant to section 312 of the 
Compact shall be permitted only as it is incident to the author-
ity and under the control of the United States. The activities of 
such third country forces shall be subject to the same limita-
tions and restrictions applicable to the authority of the United 
States under the terms of the Compact. 
(3) The Government of the United States considers "Exclusive 
use" areas established for the United States pursuant to Title 
Three of the Compact to be "within the jurisdiction of Palau," 
as that term is used in section 324 of the Compact. 
(i) Notwithstanding any other provision of law, funds appropriated 
for the Compact of Free Association, Public Law 99-239, or this joint 
resolution, in the act of making supplemental appropriations for 
fiscal year 1986, shall remain available until expended. 
(jXD Section 4(c) of the Act of December 27,1974 (88 Stat. 1784; 16 
U.S.C. 460ff-3(c)) is amended by inserting "(1)" after "(c)" and by 
adding the following at the end thereof: 
"(2) The Secretary is authorized and directed, in cooperation with 
the Secretary of Agriculture, the State of Ohio, and affected local 
governments, to undertake a program of and treatment for the 
purpose of restoring suitable vegetative cover to substantially elimi-
nate erosion from all lands, public and private, within the 
authorized boundaries of the recreation area. In the case of any 
private lands, within such authorized boundaries such treatment 
may be undertaken only with the consent of the owner thereof and 
shall be contingent upon assurances that such land treatment will 
Congress. 
48 u s e 1681 
note. 
President of U.S. 
Defense and 
national 
security. 
Real property. 
Ohio. 
State and local 
governments. 
Conservation. 
100 STAT. 3678 
PUBLIC LAW 99-658—NOV. 14, 1986 
Environmental 
protection. 
Safety. 
Appropriation 
authorization. 
Contracts. 
Effective date. 
Reports. 
Health and 
medical care. 
Agriculture and 
agricultural 
commodities. 
48 u s e 1681 
note. 
be maintained by the owner for a period of not less than ten years. 
The Secretary shall, in conjunction with such program, take such 
actions as may be required to correct areas of ecological degradation 
which create hazards to health and safety.", 
(2) Section 6 of such Act (16 U.S.C. 460ff-5) is amended by adding 
the following at the end thereof: 
"(c) There are hereby authorized to be appropriated not more than 
$500,000 for fiscal year 1986, $1,000,000 for fiscal year 1987, 
$1,500,000 for fiscal year 1988, and $1,750,000 for fiscal year 1989, to 
carry out the provisions of section 4(c)(2) of this Act. Any amounts 
authorized to be appropriated for any fiscal year under this subsec-
tion which are not appropriated for that fiscal year shall remain 
available for appropriation in succeeding fiscal years.". 
(3) No authority under this subsection to enter into contracts or to 
make payments shall be effective except to the extent and in such 
amounts as provided in advance in appropriations Acts. Any provi-
sion of this subsection which authorizes the enactment of new 
budget authority shall be effective only for fiscal years beginning 
after September 30,1985. 
(k) The Departments of Energy and Interior are directed to pro-
vide the Committees on Appropriations of the House and Senate 
with a report by December 1 of each fiscal year detailing how funds 
were spent during the previous fiscal year for the special medical 
care and logistical support program for Rongelap and Utrik and for 
the agriculture and food programs for Eniwetok and Bikini as 
referenced in Section 103(h) of Public Law 99-239. The report shall 
also specify the anticipated needs during the current and following 
fiscal years in order to meet the radiological health care and 
logistical support program for Rongelap and Utrik and the planting, 
agricultural maintenance, and food programs for Eniwetok and 
Bikini. It is the sense of the Congress that the special medical care 
and logistical support program for Rongelap and Utrik and for the 
agriculture and food programs for Eniwetok and Bikini described in 
section 103(h) of Public Law 99-239 represent special and continuing 
moral commitments of the United States which will be annually 
funded to the extent of the need of the populations of such atolls for 
such assistance. 
TITLE II—COMPACT OF FREE ASSOCIATION 
48 u s e 1681 
note. 
COMPACT OF FREE ASSOCIATION 
SEC. 201. Compact of Free Association is as follows: 
COMPACT OF FREE ASSOCIATION 
PREAMBLE 
THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE 
GOVERNMENT OF PALAU 
Human rights. 
Affirming that their Governments and the relationship between 
their Governments are founded upon respect for human rights and 
fundamental freedoms for all, and 
Affirming the common interests of the United States of America 
and the people of Palau in creating close and mutually beneficial 
relationships through a free and voluntary association of their 
Governments; and 
-r*^ 
nai ^ . 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3679 
Affirming the interest of the Government of the United States in 
promoting the economic advancement and self-sufficiency of the 
people of Palau; and 
Recognizing that their previous relationship has been based upon 
the International Trusteeship System of the United Nations Char-
ter; and that pursuant to Article 76 of the Charter, the peoples of 
59 Stat. 1031. 
the Trust Territory have progressively developed their institutions 
of self-government, and that in the exercise of their sovereign right 
to selMetermination they have, through their 
free-expressed 
wishes, adopted a Constitution appropriate to their particular cir-
cumstances; and 
Recognizing their common desire to terminate the Trusteeship 
and establish a new government-to-government relationship in 
accordance with a new political status based on the freely-expressed 
wishes of the people of Palau and appropriate to their particular 
circumstances; and 
Recognizing that the people of Palau have and retain their sov-
ereignty and their sovereign right to self-determination and the 
inherent right to adopt and amend their own Constitution and form 
of government and that the approval of the entry of their Govern-
ment into this Compact of Free Association by the people of Palau 
constitutes an exercise of their sovereign right to self-determination; 
NOW, THEREFORE, AGREE to enter into relationship of free 
. association which provides a full measure of self-government for the 
people of Palau; and 
FURTHER AGREE that the relationships of free association de-
- rives from and is as set forth in this Compact; and that, during such 
relationships of free association, the respective rights and respon-
sibilities of the Government of the United States and the Govern-
ment of the freely associated state of Palau in regard to this 
relationship of free association derives from and is as set forth in 
this Compact. 
TITLE ONE 
GOVERNMENT RELATIONS 
k 
Article I 
i 
Self-government 
Section 111 
The people of Palau, acting through their duly elected govern-
, ment established under their constitution, are self-governing. 
K 
Article II 
Foreign Affairs 
Section 121 
(a) The Republic of Palau has the capacity to conduct foreign 
International 
' affairs in its own name and right, except as otherwise provided in 
organizations, 
this Compact and the Government of the United States recognizes 
that the Government of Palau, in the exercise of this capacity, may 
'^ enter into, in its own name and right, treaties and other inter-
national agreements with governments and regional and inter-
national organizations. 
100 STAT. 3680 
PUBLIC LAW 99-658—NOV. 14, 1986 
International 
organizations. 
Conservation. 
Research and 
development. 
Maritime 
affairs. 
(b) In the conduct of its foreign affairs the Government of Palau 
confirms that it shall act in accordance with principles of inter-
national law and shall settle its international disputes by peaceful 
means. 
Section 122 
The Grovemment of the United States shall support application by 
the Grovemment of Palau for membership or other participation in 
regional or international organizations as may be mutually agreed. 
The Grovemment of the United States agrees to accept citizens of 
Palau for training and instruction at the United States Foreign 
Service Institute, established under 22 U.S.C. 4021, or similar train-
ing umder terms and conditions to be mutually agreed. 
Section 123 
•" 
In recognition of the authority and responsibility of the Govern-
ment of the United States under Title T^ree, the Government of 
Palau shall consult with the Government of the United States. The 
Grovemment of the United States, in the conduct of its foreign 
affairs, shall consult with the Government of Palau on matters 
which the Grovemment of the United States regards as relating to or 
affecting the Grovemment of Palau, and shall provide, on a regular 
basis, information on regional foreign policy matters. 
Section 124 
(a) The Government of Palau has authority to conduct its foreign 
affairs relating to law of the sea and marine resources matters, 
including the harvesting, conservation, exploration or exploitation 
of living and nonliving resources from the sea, seabed or subsoil to 
the full extent recognized under international law. 
(b) The Grovemment of Palau has jurisdiction and sovereignty over 
its territory, including its land and internal waters, territorial seas, 
the airspace superjacent thereto only to the extent recognized under 
international law. 
Section 125 
Except as otherwise provided in this Compact or its related agree-
ments, all obligations, responsibilities, rights and benefits of the 
Grovemment of the United States as administering authority which 
have resulted from the application pursuant to the Trusteeship 
Agreement of any treaty or other international eigreement 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. 
Section 126 
The Government of the United States shall accept responsibility 
for those actions taken by the Government of Palau in the area of 
foreign affairs, only as may from time to time be expressly and 
mutually agreed. 
Section 127 
- mi^^ 
.. 
The Government of the United States may assist or act on behalf 
of the Government of Palau 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 Palau undertaken with the assistance 
or through the agency of the Government of the United States 
pursuant to this Section unless expressly agreed. 
Section 128 
At the request of the Government of Palau 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 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3681 
the United States to citizens of Palau for travel outside of Palau, the 
Marshall Islands, the Federated States of Micronesia, the United 
States and its territories and possessions. 
Article III 
Communications 
Section 131 
(a) The Government of Palau has full authority and responsibility 
to regulate its domestic and foreign communications, and the 
Government of the United States shall provide communication 
assistance in accordance with the terms of a related 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 Inter-
national Frequency Registration Board of the International 
Telecommunications Union of frequency assignments to radio 
communications stations in Palau; and to submit to the Inter- 
, j., j^| 
national Frequency Registration Board seasonal schedules for 
; I t» 
the broadcasting stations in Palau in the bands allocated exclu-
sively 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 Communications Satellite Act of 
1962, 47 U.S.C. 721 et seq., over all domestic and foreign commu- 
i r- >;'J 
nications services furnished by means of satellite earth termi-
nal stations where such stations are owned or operated by 
United States common carriers and are located in Palau. 
(b) The Government of Palau may elect at any time to undertake 
. . -
the functions enumerated in Section 131(a) and previously per-
formed by the Government of the United States. Upon such election, 
the Government of the United States shall so notify the Inter-
national Frequency Registration Board and shall take such other 
actions as may be necessary to transfer to the Government of Palau 
the notification authority referred to in Section 131(a) and all rights 
deriving from the previous exercise of any such notification author-
ity by the Government of the United States. 
Section 132 
The Government of Palau shall permit the Government of the 
United States to operate telecommunications services in Palau to 
the extent necessary to fulfill the obligations of the Government of 
the United States under this Compact in accordance with the terms 
of related agreements which shall come into effect simultaneously 
with this Compact. 
100 STAT. 3682 
PUBLIC LAW 99-658—NOV. 14, 1986 
Article IV 
Immigration ::•''''• • 
J --
Section 141 
(a) Any person in the following categories may enter into, lawfully 
engage in occupations, and establish residence as a nonimmigrant 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 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 Palau; 
(2) a person who acquires the citizenship of Palau, at birth, on 
^
-
; 
or after the effective date of the Constitution of Palau; or 
' 
(3) a naturalized citizen of Palau, 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. 
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 sub-
jected to nondiscriminatory limitations provided for: 
(1) in statutes or regulations of the United States; or 
(2) in those statutes or regulations of the territory or posses-
sion concerned which are authorized by the laws of the United 
States. 
(c) Section 141(a) does not confer on a citizen of Palau, the right to 
establish the residence necessary for naturalization under the 
8 use 1101 note. 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 Palau from otherwise acquiring such rights or lawful 
permanent resident alien status in the United States. 
Discrimination, 
prohibition. 
Discrimination, 
prohibition. 
Section 142 
i ; / 
(a) Any citizen or national of the United States may enter into, 
lawfully engage in occupations, and reside in Palau, subject to the 
right of that Government 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 Palau 
only in accordance with the laws of Palau. This subsection is 
without prejudice to the right of the Government of Palau to 
regulate occupations in Palau in a nondiscriminatory manner. 
(b) With respect to the subject matter of this Section, the Govern-
ment of Palau 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 Section 141 shall not apply to any 
person who takes an affirmative step to preserve or acquire a 
citizenship or nationality other than that of Palau. 
(b) Every person having the privileges set forth in Sections 141 
and 142 who possesses a citizenship or nationality other than that of 
Palau or the United States ceases to have these privileges two years 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3683 
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 notifica-
tion to the Government of the United States of an intention to 
employ such person by the Government of Palau, commences 
employment with that 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 Palau, the 
Government of the United States may consult with or provide 
information to the notifying Government concerning the prospective 
employee, 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 Palau on the effective date of this Compact with 
respect to the positions held by them at that time. 
Article V 
Representation 
Section 151 
The Government of the United States and the Government of 
Palau may establish and maintain representative offices in the 
capitals of the other. 
Section 152 
(a) The premises of such representatives offices, and their archives 
wherever located, shall be inviolable. The property and assets of 
such representative offices shall be immune from search, requisi-
tion, attachment and any form of seizure unless such immunity is 
expressly waived. Official communications in transit shall be invio-
lable and accorded the freedom and protections accorded by recog-
nized principles of intentional 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 £is such representatives, except insofar as 
such immunity may be expressly waived by the sending Govern-
ment. 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 restric-
tions, 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 restric-
tions on the import or export of articles required for the official 
Employment 
and 
unemployment. 
i ^ ^ . 
Taxes. 
Imports. 
Exports. 
100 STAT. 3684 
PUBLIC LAW 99-658—NOV. 14, 1986 
functions and personal use of their representatives and representa-
tive offices. 
(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 
23 UST 3227. 
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 func-
tions. Without prejudice to those privileges, exemptions and immu-
nities, it is the duty of all such persons to respect the laws and 
regulations of the Government to which they are assigned. 
Article VI 
, 
;.. 
Environmental Protection 
'" *
- • 
Section 161 
The Government of the United States and the Government of 
Palau declare that it is their policy to promote efforts to prevent or 
eliminate damage to the environment and biosphere and to enrich 
understanding of the natural resources of the Palau. 
Section 162 
(a) The Government of the United States and the Government of 
Palau agree that with respect to the activities of the Government of 
the United States in Palau, and with respect to substantively 
equivalent activities of the Government of Palau, each of the 
Governments shall be bound by such environmental protection 
standards as may be mutually agreed for the purpose of carrying out 
the policy set forth in this Compact. 
Section 163 
In order to carry out the policy set forth in this Article, the 
Government of the United States and the Government of Palau 
agree to the following undertakings. 
(a) The Government of the United States: 
(1) shall apply environmental standards substantively similar 
to those in effect on the day preceding the effective date of this 
i: 
Compact to any activity requiring the preparation of an 
Environmental Impact Statement under the provisions of the 
National Environmental Policy Act of 1969, 83 Stat. 852, 42 
U.S.C. 4321 et seq. 
Regulations. 
(2) shall develop, prior to conducting any activity included 
within the category described in this Section, appropriate 
mechanisms, including regulations or other standards and 
procedures, to regulate such activity in Palau in a manner 
appropriate to the special governmental relationship set forth 
in this Compact. The Government of the United States shall 
provide the Government of Palau with the opportunity to com-
ment formally during the development of such mechanisms. 
(b) The Government of Palau shall develop standards and proce-
dures to protect the environment of Palau. As a reciprocal obliga-
tion to the undertakings of the Government of the United States 
s, 
under this Article, the Government of Palau, taking into account 
aji' . 
the particular environment of Palau, shall develop standards for 
environmental protection substantively similar to those required of 
the Government of the United States by Section 163(aXl) prior to 
conducting activities in Palau substantively equivalent to activities 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3685 
conducted there by the Government of the United States and, as a 
further reciprocal obUgation, shall enforce those standards. 
(c) Section 163(a), including any standard or procedure applicable 
thereunder, and Section 163(b) may be modified or superseded in 
whole or in part by agreement of the Government of the United 
States and the Government of Palau. 
(d) Disputes arising under this Article, except for Section 163(e), 
shall be resolved exclusively in accordance with Article II of Title 
Four. 
(e) The President of the United States may exempt any of the 
President of U.S. 
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 this Article if the 
President determines it to be in the paramount interest of the 
Government of the United States to do so, consistent with Title 
Three of this Compact and the obligations of the Government of the 
United States under international law. Prior to any decision pursu-
ant to this subsection, the views of the Government of Palau shall be 
^••- >> 
sought and considered to the extent practicable. If the President 
Reports. 
grants such an exemption, to the extent practicable, a report with 
his reasons for granting such exemption shall be given promptly to 
the Government of Palau. 
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 Palau as of the effective date of this Compact. 
Section 172 
(a) Every citizen of Palau 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 nonresident alien. 
(b) The Government and every citizen of Palau 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 Administra-
tive Procedure Act, 5 U.S.C. 701-706. 
- —' ' ^--y* • 
Section 173 
The Government of the United States and the Government of 
Palau, agree to adopt and enforce such measures, consistent with 
this Compact and its related agreements, as may be necessary to 
protect the personnel, property, installations, services, programs 
and official archives and documents maintained by the Government 
of the United States in Palau pursuant to this Compact and its 
related agreements and by that Government in the United States 
pursuant to this Compact and its related agreements. 
Section 174 
Except as otherwise provided in this Compact and its related 
,i ., ^ 
,. 
agreements: 
v '. 
(a) The Government of Palau shall be immune from the jurisdic-
tion of the courts of the United States, and the Government of the 
United States shall be immune from the jurisdiction of the courts of 
Palau. 
(b) The Government of the United States accepts responsibility for 
Claims. 
and shall pay: 
100 STAT. 3686 
PUBLIC LAW 99-658—NOV. 14, 1986 
Claims. 
Commerce and 
trade. 
Law 
enforcement and 
crime. 
(1) any unpaid money judgment rendered by the High Court 
of the Trust Territory of the Pacific Islands against the Govern-
ment of the Trust Territory of the Pacific Islands or the Govern-
ment of the United States with regard to any cause of action 
arising £is a result of acts or omissions 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; 
(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 Territory of the Pacific Islands or the 
Government of the United States, arising as a result of acts or 
omissions 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 
manner 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 hear-
ing, 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. 
(d) The Government of Palau, 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 Palau in any case in which the action is based on a 
commercial activity of the defendant Government carried out 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. This subsection shall apply only to 
actions based on commercial activities entered into or injuries or 
losses suffered on or after the effective date of this Compact. 
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 Government of Palau 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 
agreement shall have the force of law. In the United States, the laws 
of the United States governing international extradition, including 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3687 
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 Government of Palau confirms 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 constitu-
tional power of the courts of Palau to grant relief from judgments in 
appropriate cases. 
Section 177 
Claims. 
(a) Federal agencies of the Government of the United States which 
provide services and related programs in Palau are authorized to 
settle and pay tort claims arising in Palau from the activities of such 
agencies or from the acts or omissions of the employees of such 
agencies. Except as provided in Section 17703), the provisions of 28 
U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively to such 
administrative settlements and payments. 
ft)) Claims under Section 177(a) which cannot be settled under 
Section 177(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 
Palau shall provide for: 
(1) the administrative settlement of claims referred to in 
Section 177(a), including designation of local agents in Palau, 
such agents to be empowered to accept, investigate and settle 
such claims, in a timely memner, as provided in such related 
agreements; and 
(2) arbitration, referred to in Section 1770?), in a timely 
manner, at a site convenient to the claimant, in the event a 
claim is not otherwise settled pursuant to Section 177(a). 
(d) The provisions of Section 174(d) shall not apply to claims 
covered by-thjs Section. 
TITLE TWO 
ECONOMIC RELATIONS 
Article I 
Grant Assistance 
Section 211 
In order to assist the Government of Palau in its efforts to 
advance the well-being of the people of Palau and in recognition of 
the special relationship that exists between the United States and 
Palau, the Government of the United States shall provide to the 
Government of Palau on a grant basis the following amounts: 
(a) $12 million annually for ten years commencing on the effective 
date of this Compact, and $11 million annually for five years 
commencing on the tenth anniversary of the effective date of this 
Compact, for current account operations and maintenance purposes, 
which amounts commencing on the fourth anniversary of the effec-
tive date of this Compact shall include a minimum annual distribu-
tion of $5 million from the fund specified in Section 211(f). 
100 STAT. 3688 
PUBLIC LAW 99-658—NOV. 14, 1986 
(b) $2 million annually for fourteen years commencing on the first 
anniversary of the effective date of this Compact as a contribution to 
efforts aimed at achieving increased self-sufficiency in energy 
production, of which annual amounts not less than $500,000 shall be 
devoted to the energy needs of those parts of Palau not served by its 
central power-generating facility. 
(c) $150,000 annually for fifteen years commencing on the effective 
date of this Compact as a contribution to current account operations 
and maintenance of communications systems, and the sum of $1.5 
million, to be made available concurrently with the grant assistance 
provided during the first year after the effective date of this Com-
pact, for the purpose of acquiring such communications hardware as 
^' 
may be located within Palau or for such other current or capital 
account activity as the Government of Palau may select. 
(d) $631,000 annually on a current account basis for fifteen years 
commencing on the effective date of this Compact for the purposes 
set forth below: 
(1) for the surveillance and enforcement by Government of 
Palau of its maritime zone; 
(2) for health and medical programs, including referrals to 
hospital and treatment centers; and 
(3) for a scholarship fund to support the post-secondary edu-
cation of citizens of Palau attending United States accredited, 
post-secondary institutions in Palau, the United States, its terri-
tories and possessions, and states in free association with the 
United States. The curricular criteria for the award of scholar-
ships shall be designed to advance the purposes of the plan 
referred to in Section 231. 
(e) The sum of $666,800 as a contribution to the commencement of 
activities pursuant to Section 211(d)(1). 
(f) The sum of $66 million on the effective date of this Compact, 
and the sum of $4 million concurrently with the grant assistance to 
be made available during the third year after the effective date of 
this Compact, to create a fund to be invested by the Government 
of Palau in issues of bonds, notes or other redeemable instruments 
of the Government of the United States or other qualified in-
struments which may be identified by mutual agreement of the 
Government of the United States and the Government of Palau. 
Investment of the fund in qualified instruments of United States 
nationality, and the distribution of sums derived from such invest-
ment to the Government of Palau, shall not be subject to any form 
of taxation by the United States or its political subdivisions. The 
Government of the United States and the Government of Palau 
shall set forth in a separate agreement, which shall come into effect 
simultaneously with this Compact, provisions for the investment, 
management and review of the fund so as to allow for an agreed 
minimum annual distribution from its accrued principal and in-
terest commencing upon the effective date of this Compact for fifty 
years. The objective of this sum is to produce an average annual 
distribution of $15 million commencing on the fifteenth anniversary 
of this Compact for thirty-five years. Any excess or variance from 
the agreed minimum annual distributions which may be produced 
from these sums shall accrue to or be absorbed by the Government 
of Palau unless otherwise mutually agreed in accordance with the 
provisions of the separate agreement referred to in this paragraph. 
The annual distributions produced from these sums are not subject 
to Sections 215 and 236. 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3689 
Section 212 
In order to assist the Government of Palau in its efforts to 
advance the economic development and self-sufficiency of the people 
of Palau and in recognition of the special relationship that exists 
between the United States and Palau, the Government of the United 
States shall provide: 
(a) To the people of Palau, a road system in accordance with Highways. 
mutually agreed specifications, the construction of which shall be 
completed prior to the sixth anniversary of the effective date of this 
Compact; and 
(b) To the Government of Palau, the sum of $36 million, during 
the first year after the effective date of this Compact, for capital 
account purposes. 
Section 213 
The Government of the United States shall provide on a grant 
basis to the Government of Palau the sum of $5.5 million in conjunc- 
' 
tion with Article II of Title Three. This sum shall be made available 
concurrently with the grant assistance provided pursuant to this 
Article during the first year after the effective date of this Compact. 
The Government of Palau, in its use of such funds, shall take into 
account the impact of the activities of the Government of the United 
States in Palau. 
Section 214 
All funds previously appropriated to the Trust Territory of the 
Pacific Islands for the Government of Palau which are unobligated 
by the Government of the Trust Territory as of the effective date of 
this Compact shall accrue to the Government of Palau for the 
purposes for which such funds were originally appropriated as 
determined by the Government of the United States. 
Section 215 
Except as otherwise provided, the amounts stated in Sections 
211(a), 211(b), 211(c) and 212(b) 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 begin-
ning of Fiscal Year 1981 as the base. 
Article II 
jjoarr. 
Program Assistance 
Section 221 
(a) The Government of the United States shall make available to 
Palau, in accordance with and to the extent provided in the separate 
agreement 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) provided pursuant to the Postal Reorganization Act, 39 
U.S.C. 101 et seq.; 
(3) of the United States Federal Aviation Administration; and 
(4) of the United States Civil Aeronautics Board or its succes-
sor agencies which has the authority to implement the provi-
sions of paragraph 5 of Article IX of such separate agreements, 
the language of which is incorporated into this Compact. 
100 STAT. 3690 
PUBLIC LAW 99-658—NOV. 14, 1986 
Education. 
Health and 
medical care. 
Energy. 
Research and 
development. 
C!onservation. 
Education. 
(b) The Government of the United States, recognizing the special 
needs of the Palau particularly in the fields of education and health 
care, shall make available, as provided by the laws of the United 
States, 
(1) the annual amount of $2 million which shall be allocated 
in accordance with the provisions of the separate agreement 
referred to in Section 232; and 
(2) the sums of $4.3 million, $2.9 million and $1.5 million, 
respectively, during the first, second and third years after the 
effective date of this Compact, which sums shall be used by the 
Government of Palau as current account funds to finance pro-
grams similar to those programs of the United States that 
applied to Palau prior to the effective date of this Compact and 
that provided financial assistance for education to any institu-
tion, agency, organization or permanent resident of Palau or to 
the College of Micronesia. 
(c) The Government of the United States shall make available to 
Palau such alternate energy development projects, studies and con-
servation 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 exercise 
such authority as is necessary for the purposes of this Article and as 
is set forth in the related agreements referred to in Section 232, 
Whichshall also set forth the extent to which services and programs 
shall D6~^cQvided to Palau. 
Section 222 
The Government oFTalaia^ay request, from time to time, tech-
nical assistance from the FederaLagencies and institutions of the 
Government of the United States, wlirch-ace authorized to grant 
such technical assistance in accordance with its law and which shall 
grant such technical assistance in a manner which gives priority 
consideration to Palau over other recipients not a part of the United 
States, its territories or possessions and equivalent consideration to 
Palau with respect to other states in Free Association with the 
United States. 
Section 223 
The citizens of Palau who are receiving post-secondary education 
assistance from the Government of the United States on the day 
preceding 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 
Palau may agree from time to time to the extension to Palau of 
additional United States grant assistance and of United States 
services and programs as provided by the laws of the United States. 
Article III 
; , 
Administrative Provisions 
•'• 
, 
• " 
f ' 
Section 231 
(a) The annual expenditure by the Government of Palau of the 
grant amounts specified in Article I of this Title shall be in accord-
PUBLIC LAW 99-658—NOV. 14,1986 
100 STAT. 3691 
ance with an official national development plan promulgated by the 
Government of Palau and concurred in by the Government of the 
United States prior to the effective date of this Compact. This plan 
may be amended from time to time by the Government of Palau. 
(b) The Government of the United States and the Government of 
Palau recognize that the achievement of the goals of the plan 
referred to in this Section depends upon the availability of adequate 
internal revenue as well as economic assistance from sources outside 
of Palau, including the Government of the United States, and may, 
in addition, be affected by the impact of exceptional, economically 
adverse circumstances. The Government of Palau shall therefore 
Reports, 
lao 
report annually to the President of the United States and to the 
Congress of the United States on the implementation of this plan 
and on its use of the funds specified in this Article. This report shall 
outline the achievements of the plan to date and the need, if any, for 
an additional authorization and appropriation of economic assist-
ance for that year to account for any exceptional, economically 
adverse circumstances. The availability of such additional economic 
assistance from the Government of the United States shall be 
subject to the authorization and appropriation of funds by the 
Government of the United States. 
Section 232 
The specific nature, extent and contractual arrangements of the 
Effective date. 
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 Palau, and other arrangements in 
connection with a service or program furnished by the Government 
of the United States, are set forth in related agreements which shall 
come into effect simultaneously with this Compact. 
Section 233 
The Government of the United States, in consultation with the 
Grants. 
Government of Palau, shall determine and implement procedures 
for the periodic audit of all grants and other assistance made under 
this Title. Such audits shall be conducted at no cost to the Govern-
ment of Palau. 
Section 234 
Title to the property of the Government of the United States 
Real property, 
situated in the Trust Territory of the Pacific Islands and in Palau or 
acquired for 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 Government of Palau as set forth in a separate agree-
ment which shall come into effect simultaneously with this Com-
pact. The provisions of this Section shall not apply to the personal 
property of the Government of the United States for which 
the Government of the United States determines a continuing 
requirement. 
Section 235 
Trusts. 
(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 Palau, shall appoint 
a new trustee who shall exercise the functions formerly exercised by 
the High Commissioner of the Trust Territory of the Pacific Islands. 
100 STAT. 3692 
PUBLIC LAW 99-658—NOV. 14, 1986 
Ck)urts, U.S. 
Imports. 
Tariff Schedules 
of the U.S. 
President of U.S. 
Ante, pp. 2923, 
2926. 
19 u s e note 
prec. 
1202-1202 note. 
(b) To provide for the continuity of administration, and to assure 
the Governments of Palau 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 bene-
ficiaries, 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 Article I of this Title. The obligation 
of the Government of the United States under Article I 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. 
Article IV 
. ., ,.,. • . 
Trade 
-
Section 241 
Palau is not included in the customs territory of the United 
States. 
Section 242 
The President of the United States shall proclaim the following 
tariff treatment for articles imported from Palau which shall apply 
during the period of effectiveness of this Title: 
(a) Unless otherwise excluded, articles imported from Palau, sub-
ject to the limitations imposed under sections 503(b) and 504(c) of 
title 5 of the Trade Act of 1974 (19 U.S.C. 2463(b): 2464(c)), shall be 
exempt from duty. 
(b) Only canned tuna provided for in item 112.30 of the Tariff 
Schedules of the United States that is imported from the Federated 
States of Micronesia, the Marshall Islands and Palau during any 
calendar year not to exceed 10 percent of the United States 
consumption of canned tuna during the immediately preceding 
calendar year, as reported by the National Marine Fisheries Service, 
shall be exempt from duty; but the quantity of tuna given duty free 
treatment under this paragraph for any calendar year shall be 
counted against the aggregate quantity of canned tuna that is 
dutiable under rate column numbered 1 of such item 112.30 for that 
calendar year. 
(c) The duty-free treatment provided under paragraph (1) shall not 
apply to: 
(1) watches, clocks and timing apparatus provided for in sub-
part E of part 2 of schedule 7 of the Tariff Schedules of the 
United States; 
(2) buttons (whether finished or not finished) provided for in 
item 745.32 of such Schedules; 
(3) textile and apparel articles which are subject to textile 
agreements; and 
(4) footv.^ear, handbags, luggage, flat goods, work gloves, and 
leather wearing apparel which were not eligible articles for 
PUBLIC LAW 99-658-NOV. 14, 1986 
100 STAT. 3693 
purposes of title V of the Trade Act of 1974 (19 U.S.C. 2461 et 
seq.) on April 1,1984. 
(d) If the cost or value of materials produced in the customs 
territory of the United States is included with respect to an eligible 
article which is a product of Palau, an amount not to exceed 15 
percent of the appraised value of the article at the time it is entered 
that is attributable to such United States cost or value may be 
applied for duty assessment purposes toward determining the 
percentage referred to in section 503(b)(2) of title V of the Trade Act 
of 1974. 
Section 243 
Articles imported from Palau which are not exempt from any 
duty under paragraphs (a), (b), (c) and (d) of Section 242 shall be 
subject to the rates of duty set forth in column numbered 1 of the 
Tariff Schedules of the United States and all products of the United 
States imported into Palau 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 regulations relating to importation, exportation, taxation, 
sale, distribution, storage, or use. 
Article V 
Finance and Taxation 
Section 251 
The currency of the United States is the official circulating legal 
tender of Palau. Should the Government of Palau 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 Palau may, with respect to United States 
persons, tax income derived from sources within its respective juris-
diction, property situated therein, including transfers of such prop-
erty 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 Palau, domiciled therein and who is a nonresident and 
not a citizen of the United States, shall be exempt from 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 
Palau, the Government of Palau shall have authority to impose tax 
upon income derived by a resident of Palau from sources without 
Palau in the same manner and to the same extent as the Govern-
ment of Palau imposes tax upon income derived from within its 
jurisdiction. If the Government of Palau exercises such authority as 
provided in this subsection, any individual resident of Palau who is 
subject to tax by the Government of the United States on income 
which is also taxed by the Government of Palau shall be relieved of 
liability to the Government of the United States for the tax which, 
but for this subsection, would otherwise be imposed by the Govern-
ment of the United States on such income. For purposes of this 
Section, the term "resident of Palau" shall be deemed to include any 
Ante, p. 2926. 
Imports. 
19 u s e note 
prec. 
1202-1202 note. 
Gifts and 
property. 
26 u s e 1 et seq., 
ante, p. 2095. 
100 STAT. 3694 
PUBLIC LAW 99-658—NOV. 14, 1986 
person who was physically present in Palau for a period of 183 or 
more days during any taxable year. The relief from liability referred 
to in this subsection means only: 
(1) relief in the form of the foreign tax credit (or deduction in 
lieu thereof) available with respect to the income taxes of a 
possession of the United States, £ind 
(2) relief in the form of the exclusion under section 911 of the 
26 use 911; 
United States Internal Revenue Code of 1954. 
ante, p. 2095. 
(b) If the Government of Palau subjects income to taxation 
substantially 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 
(a) For purposes of section 936 of the Internal Revenue Code of 
26 use 936. 
1954 Palau shall be treated as if it was a possession of the United 
States. 
(b) Subsection (a) of this Section shall not apply to Palau for any 
period after December 31, 1986, during which there is not in effect 
between Palau and the United States an exchange of information 
agreement of the kind described in section 274(h)(6)(C) (other than 
clause (ii) thereof) of the Internal Revenue Code of 1954. 
(c) If the tax incentives extended to Palau under subsection (a) of 
this Section are, at any time during which the Compact is in effect, 
reduced, the United States Secretary of the Treasury shall negotiate 
an agreement with the Government of Palau under which, when 
such agreement is approved by law, Palau will be provided with 
benefits substantially equivalent to such reduction in benefits. If 
within the 1-year period after the date of the enactment of the Act 
making the reduction in benefits, an agreement negotiated under 
the preceding sentence is not approved by law, the matter shall be 
submitted to the Arbitration Board established pursuant to Section 
; 
424. For purposes of Article V of this Title, the Secretary of the 
Treasury or his delegate shall be the member of such Board rep-
resenting the Government of the United States. Any decision of such 
Board in the matter when approved by law shall be binding on the 
United States, except that such decision rendered is binding only as 
to whether the United States has provided the substantially equiva-
lent benefits referred to in this subsection. 
'. * ;v[ 
(d) For purposes of section 274(h)(3XA) of the Internal Revenue 
^ ' 
Code of 1954, the term "North American area" shall include Palau. 
Section 256 
This Article shall apply to income earned, and transactions occur-
ring, after September 30, 1985, in taxable years ending after such 
date. 
TITLE THREE 
* 
* 
SECURITY AND DEFENSE RELATIONS 
\ t 
Article I 
. j. I^" 
' 
Authority and Responsibility 
Section 311 
The territorial jurisdiction of the Republic of Palau shall be 
completely foreclosed to the military forces and personnel or for the 
military purposes of any nation except the United States of Amer-
ica, and as provided for in Section 312. 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3695 
Section 312 
The Government of the United States has full authority and 
responsibility for security and defense matters in or relating to 
Palau. Subject to the terms of any agreements negotiated pursuant 
to Article II of this Title, the Government of the United States may 
conduct within the lands, water and airspace of Palau the activities 
and operations necessary for the exercise of its authority and 
responsibility under this Title. The Government of the United 
States may invite the armed forces of other nations to use military 
areas and facilities in Palau in conjunction with and under the 
control of United States Armed Forces. 
Section 313 
The Government of Palau shall refrain from actions which the 
Government of the United States determines, after consultation 
with that Government, to be incompatible with its authority and 
responsibility for security and defense matters in or relating to 
Palau. 
Article II 
Defense Sites and Operating Rights 
Section 321 
The Government of the United States may establish and use 
defense sites in Palau, and may designate for this purpose land and 
water areas and improvements in accordance with the provisions of 
a separate agreement which shall come into force simultaneously 
with this Compact. 
Section 322 
(a) When the Government of the United States desires to establish 
or use such a defense site specifically identified in the separate 
agreement referred to in Section 321, it shall so inform the Govern-
ment of Palau which shall make the designated site available to the 
Government of the United States for the duration and level of use 
specified. 
(b) With respect to any site not specifically identified in the 
separate agreement referred to in Section 321, the Government of 
the United States shall inform the Government of Palau, which 
shall make the designated site available to the Government of the 
United States for the duration and level of use specified, or shall 
make available one alternative site acceptable to the Government of 
the United States. If such alternative site is unacceptable to the 
Government of the United States, the site first designated shall be 
made available after such determination. 
(c) Compensation in full for designation, establishment or use of 
defense sites is provided in Title Two of this Compact. 
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 
civilians, while present in Palau, are set forth in related agreements 
which shall come into effect simultaneously with this Compact. 
Section 324 
In the exercise in Palau of its authority and responsibility under 
this Title, the Government of the United States shall not use, test, 
store or dispose of nuclear, toxic chemical, gas or biological weapons 
intended for use in warfare and the Government of Palau assures 
the Government of the United States that in carrying out its 
Armed Forces. 
Armed Forces. 
Effective date. 
Arms and 
munitions. 
Aircraft and air 
carriers. 
Maritime affairs. 
100 STAT. 3696 
PUBLIC LAW 99-658—NOV. 14, 1986 
security and defense responsibilities under this Title, the Govern-
,-. /, 
ment of the United States has the right to operate nuclear capable 
or nuclear propelled vessels and aircraft within the jurisdiction of 
Palau without either confirming or denying the presence or absence 
of such weapons within the jurisdiction of Palau. 
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 Palau, all obligations, responsibilities, rights and bene-
fits of: 
(a) Any defense treaty or other international security agreement 
applied by the Government of the United States as administering 
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 agreement 
to which the Government of the United States is or may become a 
party which it determines to be applicable in Palau. Such a deter-
mination by the Government of the United States shall be preceded 
by appropriate consultation with the Government of Palau. 
Article IV 
Service in the Armed Forces of the United States 
., 
Voluntarism. 
Section341 
u • * 1
^ ^ iO li^4 ;: 
V' 
Any citizen of Palau entitled to the privileges of Section 141 of 
this Compact shall be eligible to volunteer for service in the Armed 
Forces of the United States, but shall not be subject to involuntary 
induction 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 one qualified student from Palau as may be 
nominated by the Government of Palau, 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. 1295b03X6), provided that the provisions of 46 U.S.C. 
1295b(bX6XC) shall not apply to the enrollment of students pursuant 
to Section 342(b) of this Compact. 
Article V 
General Provisions 
Section 351 
Arbitration. 
(a) The Government of the United States and the Government of 
Palau shall establish a joint committee empowered to consider 
disputes which may arise under the implementation of this Title 
^"' 
and its related agreements. 
&ii mo 
^f^^} 1-' 
ift^i£f.i£j^^ci3' 
• siii 
y^i^:^t-
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3697 
Defense and 
national 
security. 
(b) The membership of the joint committee shall comprise selected 
senior officials of each of the participating Governments. The senior 
United States military commander in the Pacific area shall be the 
senior United States member of the joint committee. For the meet-
ings of the joint committee, each of the Governments may designate 
additional or alternate representatives as appropriate for the sub-
ject matter under consideration. 
(c) Unless otherwise mutually agreed, the joint committee shall 
meet semi-annually at a time and place to be designated, after 
appropriate consultation, by the Government of the United States. 
The joint committee also shall meet promptly upon request of either 
of its members. Upon notification by the Government of the United 
States, the joint committee shall meet promptly in combined session 
with other such joint committees so notified. The 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 the joint committee shall be referred to 
the Government of the United States and the Government of Palau 
for resolution, and the Government of Palau shall be afforded, on an 
expeditious basis, an opportunity to raise its concerns with the 
United States Secretary of Defense personally regarding any unre-
solved issue which threatens its continued association with the 
Government of the United States. 
Section 352 
In the exercise of its authority and responsibility under this 
Compact, the Government of the United States shall accord due 
respect to the authority and responsibility of the Government of 
Palau under this Compact and to the responsibility of the Govern-
ment of Palau to assure the well-being of Palau and its people. The 
Government of the United States and the Government of Palau 
agree that the authority and responsibility of the United States set 
forth in this Title are exercised for the mutual security and benefit 
of Palau and the United States, and that any attack on Palau 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, or 
threat thereof, the Government of the United States would take 
action to meet the danger to the United States and Palau in 
accordance with its constitutional processes. 
Section 353 
(a) The Government of the United States shall not include the 
Government of Palau as a named party to a formal declaration of 
war, without the consent of the Government of Palau. 
(b) Absent such consent, this Compact is without prejudice, on the Claims. 
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 Palau 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 any manner against the government, citizens, 
nationals or entities of any third country. 
(c) Petitions under Section 353(b)(1) shall be treated as if they were 
made by citizens of the United States. 
100 STAT. 3698 
PUBLIC LAW 99-658—NOV. 14, 1986 
TITLE FOUR 
GENERAL PROVISIONS 
, \ 
. 
Article I 
< 
Approval and Effective Date 
Section 411 
^ 
This Compact shall come into effect upon mutual agreement 
between the Government of the United States, acting in fulfillment 
of its responsibilities as Administering Authority of the Trust Terri-
tory of the Pacific Islands, and the Government of Palau, subsequent 
to completion of the following: 
(a) Approval by the Government of Palau in accordance with its 
constitutional processes; 
Ot)) Approval by the people of Palau in a referendum called on this 
Compact; and 
(c) Approval by the Government of the United States in accord-
ance with its constitutional processes. 
Article II 
•- -
Conference and Dispute Resolution 
'• 
Section 421 
The Government of the United States and the Government of 
Palau shedl confer promptly at the request of the other on matters 
relating to the provisions of this Compact or of its related agree-
ments. 
Section 422 
In the event the Government of the United States or the Govern-
ment of Palau, after conferring pursuant to Section 421, determines 
that there is a dispute and gives written notice thereof, the Govern-
ments 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 Palau cannot be resolved within 90 days of written 
notification in the manner provided in Section 422, either party to 
the dispute may refer it to arbitration in accordance with Section 
4 2 4 . 
.... 
..-,•..., . r^=-.. 
. 
Section 424 
Should a dispute be referred to arbitration as provided for in 
Section 423, an arbitration board shall be established for the pur-
pose 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 
and each of the two parties to the dispute 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 arbitration 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 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3699 
shall maintain a standing list of 10 candidates. The parties to the 
dispute shall jointly appoint a chairman within 15 days after selec-
tion of the other members of the arbitration board. Failing agree-
ment on a chairman, the chairman shall be chosen by lot from the 
standing lists 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 VI 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 pro-
vide 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 individ-
ual 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 Government of Palau, 
Article III 
Amendment and Review 
Section 431 
The provisions of this Compact may be amended at any time by 
mutual agreement of the Government of the United States and the 
Government of Palau in accordance with their respective constitu-
tional processes. 
Section 432 
Upon the fifteenth and thirtieth and fortieth anniversaries of the 
effective date of this Compact, the Government of the United States 
and the Government of Palau shall formally review the terms of this 
Compact and its related agreements and shall consider the overall 
nature and development of their relationship. In these formal re-
views, the governments shall consider the operating requirements of 
the Government of Palau and its progress in meeting the develop-
ment objectives set forth in the plan referred to in Section 231(a). 
The governments commit themselves to take specific measures in 
relation to the findings of conclusions resulting from the review. 
Any alteration to the terms of this Compact or its related agree-
ments shall be made by mutual agreement and the terms of this 
Compact and its related agreements shall remain in force until 
otherwise amended or terminated pursuant to Title Four of this 
Compact. 
100 STAT. 3700 
PUBLIC LAW 99-658—NOV. 14, 1986 
.- 
. 
' 
•..:--. 
Article IV 
r- ^ f
- ' £': > 
>*• 
... 
, 
Termination 
,.. 
' - ^ H" 
Section 441 
This Compact may be terminated by mutual agreement and sub-
ject to Section 451, 
Section 442 
This Compact may be terminated by the Government of the 
United States subject to Section 452, such termination 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 termi-
nation may be extended. 
Section 443 
This Compact shall be terminated, pursuant to its constitutional 
processes, by the Government of Palau subject to Section 452 if the 
people of Palau vote in a plebiscite to terminate. The Government of 
Palau 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 constitu-
tional and legislative 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 certifi-
cation of the results of the plebiscite, give notice of termination to 
the Government of the United States, such termination to be effec-
tive 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. 
Article V 
' 
Survivability 
Section 451 
Should termination occur pursuant to Section 441, economic 
assistance by the Government of the United States shall continue on 
mutually agreed terms. 
^ ^ 
io •£ 
Section 452 
Should termination occur pursuant to Section 442 or 443, the 
following provisions of this Compact shall remain in full force and 
effect until the fiftieth anniversary of the effective date of this 
Compact and thereafter as mutually agreed: 
, 
^ ,, 
(a) Article I and Section 233 of Title Two; 
(b) Title Three; and 
. 
-
(c) Articles II, III, V and VI of Title Four. 
-
^ 
Section 453 
> <.r 
Notwithstanding any other provision of this Compact: 
(a) The provisions of Section 311, even if Title Three should 
terminate, are binding and shall remain in effect for a period of 50 
years and thereafter until terminated or otherwise amended by 
mutual consent; 
(b) The related agreements referred to in Article II of Title Three 
shall remain in effect in accordance with their terms; and 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3701 
(c) The Government of the United States reaffirms its continuing 
interest in promoting the long-term economic advancement and self-
sufficiency of the people of Palau. 
Section 454 
Any provision of this Compact which remains in effect by oper-
ation of Section 452 shall be construed and implemented in the same 
manner as prior to any termination of this Compact pursuant to 
Section 442 or 443. 
Article VI 
Definition of Terms 
Section 461 
For the purpose of this Compact the following terms shall have 
the following meanings: 
(a) "Trust Territory of the Pacific Islands" means the area estab-
lished in the Trusteeship Agreement consisting of the administra-
tive districts of Kosrae, Yap, Palau, 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 
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) "Palau" is used in a geographic sense and includes 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 consistent with the Compact and 
its related agreements. 
(d) "Government of Palau" means the Government established 
and organized by the Constitution of Palau including all the political 
subdivisions and entities comprising that Government. 
(e) "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 or Palau for less 
than one year, or who is a dependent of a resident representative, as 
described in Section 152. 
if) For the purposes of Article IV of Title One of this Compact: 
(1) "Actual Residence" means physical presence in Palau 
during eighty-five percent of the period of residency required by 
Section 141(aX3); 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). 
(g) "Defense Sites" means those land and water areas and 
improvements thereon in Palau reserved or acquired by the Govern-
ment of Palau for use by the Government of the United States, as 
set forth in the related agreements referred to in Section 321. 
(h) "Capital Account" means, for each year of the Compact, those 
portions of the total grant assistance provided in Article I of Title 
Two, which are to be obligated for: 
100 STAT. 3702 
PUBLIC LAW 99-658—NOV. 14, 1986 
(1) the construction or major repair of capital infrastructure; 
or 
(2) public and private sector projects identified in the official 
overall economic development plan. 
(i) "Current Account" means, for each year of the Compact, those 
portions of the total grant assistance provided in Article I of Title 
Two, 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. 
(j) "Official National 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 docu-
ment should include an analysis of population trends, manpower 
requirements, social needs, gross national product estimates, re-
source utilization, infrastructure needs and expenditures, and the 
specific private sector projects required to develop the local economy 
of Palau. Project identification should include initial cost estimates, 
with project purposes related to specific development goals and 
objectives. 
(k) "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. 
(1) "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 
Palau shall conclude related agreements which shall come into 
effect and shall survive in accordance with their terms, and which 
shall be construed and implemented in a manner consistent with 
this Compact, as follows: 
(a) Agreement Regarding the Provision of Telecommunication 
Services by the Government of the United States to Palau Con-
cluded Pursuant to Section 131 of the Compact of Free Association; 
(h) Agreement Regarding the Operation of Telecommunication 
Services of the Government of the United States in Palau, Con-
cluded Pursuant to Section 132 of the Compact of Free Association; 
(c) Agreement on Extradition, Mutual Assistance in Law Enforce-
ment Matters and Penal Sanctions Concluded Pursuant to Section 
175 of the Compact of Free Association; 
(d) Agreement Regarding United States Economic Assistance to 
the Government of Palau Concluded Pursuant to Section 211(f) of 
the Compact of Free Association; 
(e) Agreement Regarding Construction Projects in Palau Con-
cluded Pursuant to Section 212(a) of the Compact of Free 
Association; 
(f) Agreement Regarding Federal Programs and Services, and 
Concluded Pursuant to Article II of Title Two and Section 232 of the 
Compact of Free Association; 
(g) Agreement Regarding Property Turnover, Concluded Pursuant 
to Section 234 of the Compact of Free Association; 
PUBLIC LAW 99-658-NOV. 14, 1986 
100 STAT. 3703 
(h) Agreement Regarding the Military Use and Operating Rights 
of the Government of the United States in Palau Concluded Pursu-
ant to Sections 321 and 322 of the Compact of Free Association; and 
(i) Status of Forces Agreement Concluded Pursuant to Section 323 
of the Compact of Free Association. 
(j) Agreement regarding the Jurisdication and Sovereignty of the 
Republic of Palau over its Territory and the Living and Non-living 
Resources of the Sea. 
Article VII 
Concluding Provisions 
Section 471 
(a) The Government of the United States and the Government of 
Palau agree that they have full authority under their respective 
constitutions to enter into this Compact and its related agreements 
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) The Government of the United States and the Government of 
Palau shall take all necessary steps, of a general or particular 
character, to ensure, not later than the effective date of this Com-
pact, that their laws, regulations and administrative procedures are 
such as to effect the commitments referred to in Section 471(a). 
(c) Without prejudice to the effects of this Compact under inter-
national 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 and the Government of Palau. 
Each government shall possess an original English language 
version. 
IN WITNESS THEREOF, 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 the Government of Palau. 
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100 STAT. 3704 
PUBLIC LAW 99-658—NOV. 14, 1986 
DONE AT 
, THIS 
DAY 
OF 
, ONE THOUSAND NINE HUNDRED EIGHTY-FIVE 
FOR THE GOVERNMENT 
OF 
THE UNITED STATES OF AMERICA 
DONE AT 
_, THIS 
DAY 
48 u s e 1681 
note. 
Aliens. 
Guam. 
Courts, U.S. 
Courts, U.S. 
28 u s e 631 et 
OF 
, ONE THOUSAND NINE HUNDRED EIGHTY-FIVE 
FOR THE GOVERNMENT 
, , 
OF 
, .. , I 
. 
'.. .
^ ,. !. 
THE REPUBUC OF PALAU 
" 
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••><> 
JURISDICTION 
SEC. 202. (a) MARITIME AND TERRITORIAL JURISDICTION.—With re-
spect to section 321 of the Compact of Free Association and its 
related agreements, the jurisdictional provisions set forth in subsec-
tion (b) of this section shall apply only to the citizens and nationals 
of the United States and aliens lawfully admitted to the United 
States for permanent residence who are in Palau. 
(b) DEFENSE SITES.—The defense sites of the United States estab-
lished in Palau in accordance with the Compact of Free Association 
and its related agreements are within the special maritime and 
territorial jurisdiction of the United States as set forth in section 7, 
title 18, United States Code. 
(c) OFFENSES.—(1) Any person referred to in subsection (a) of this 
section who within or upon such defense sites is guilty of any act or 
omission which, although not made punishable by any enactment of 
Congress, would be punishable if committed or omitted within the 
jurisdiction of the territory of Guam by the laws thereof, in force at 
the time of such act or omission, shall be guilty of a like offense and 
subject to a like punishment. 
(2) The District Court of Guam shall have jurisdiction to try all 
criminal offenses against the United States, including the laws of 
Guam made applicable to the defense sites in Palau by virtue of 
subsection (cXD of this section, committed by any person referred to 
in subsection (a) of this section. 
(3) The District Court of Guam may appoint one or more mag-
istrates for the defense sites in Palau. Such Magistrates shall have 
the power and the status of Magistrates appointed pursuant to 
chapter 43, title 28, United States Code: Provided however. That 
such Magistrates shall have the power to try persons accused of, and 
sentence persons convicted of, petty offenses, as defined in section 
-rv 
PUBLIC LAW 99-658—NOV. 14, 1986 
100 STAT. 3705 
1(3), title 18, United States Code, including violations of regulations 
for the maintenance of peace, order, and health issued by the 
Commanding Officer on such defense sites, without being subject to 
the restrictions provided for in section 3401(b), title 18, United 
States Code. 
..„ 
Approved November 14, 1986. 
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LEGISLATIVE HISTORY—H.J. Res. 626 (S.J. Res. 325): 
HOUSE REPORTS: No. 99-663, Pt. 1 (Ck)mm. on Foreign Affairs), Pt. 2 (Ctomm. on 
Interior and Insular Affairs), Pt. 3 (Comm. on Ways and 
Means), and Pt. 4 (Comm. on Merchant Marine and Fisheries). 
SENATE REPORTS: No. 99-403 accompanying S.J. Res. 325 (Comm. on Energy and 
Natural Resources). 
CONGRESSIONAL RECORD, Vol. 132 (1986): 
Sept. 29, considered and passed House. 
Oct. 6, considered and passed Senate, amended. 
Oct. 16, House concurred in E>enate amendments.