
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-504 Section 3(a)]
[CITE: 48USC1901]

 
              TITLE 48--TERRITORIES AND INSULAR POSSESSIONS
 
           CHAPTER 18--MICRONESIA, MARSHALL ISLANDS, AND PALAU
 
              SUBCHAPTER I--MICRONESIA AND MARSHALL ISLANDS
 
Sec. 1901. Approval of Compact of Free Association


(a) Federated States of Micronesia

    The Compact of Free Association set forth in title II of this joint 
resolution between the United States and the Government of the Federated 
States of Micronesia is hereby approved, and Congress hereby consents to 
the subsidiary agreements as set forth on pages 115 through 391 of House 
Document 98-192 of March 30, 1984, as they relate to such Government. 
Subject to the provisions of this 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) Marshall Islands

    The Compact of Free Association set forth in title II of this joint 
resolution between the United States and the Government of the Marshall 
Islands is hereby approved, and Congress hereby consents to the 
subsidiary agreements as set forth on pages 115 through 391 of House 
Document 98-192 of March 30, 1984, as they relate to such Government. 
Subject to the provisions of this 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.

(c) Reference to Compact

    Any reference in this joint 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.

(d) Amendment, change, or termination in 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 effected 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 the Agreement 
    between the Government of the United States and the Government of 
    the Federated States of Micronesia Regarding Friendship, Cooperation 
    and Mutual Security Concluded Pursuant to Sections 321 and 323 of 
    the Compact of Free Association referred to in section 462(j) of the 
    Compact and the Agreement between the Government of the United 
    States and the Government of the Marshall Islands Concerning Mutual 
    Security Concluded Pursuant to Sections 321 and 323 of the Compact 
    of Free Association referred to in section 462(k) of the Compact;
        (C) to any amendment, change, or termination of the agreements 
    concluded pursuant to Compact sections 175, 177, and 221(a)(5), 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) of the Compact;
            (ii) Article II of the agreement referred to in section 
        462(b) of the Compact;
            (iii) Article II and Section 7 of Article XI of the 
        agreement referred to in section 462(e) of the Compact;
            (iv) the agreement referred to in section 462(f) of the 
        Compact;
            (v) Articles III and IV of the agreement referred to in 
        section 462(g) of the Compact;
            (vi) Articles III and IV of the agreement referred to in 
        section 462(h) of the Compact; and
            (vii) Articles VI, XV, and XVII of the agreement referred to 
        in section 462(i) of the Compact.

(e) Subsidiary agreements deemed bilateral

    For purposes of implementation of the Compact and this joint 
resolution, each of the subsidiary agreements referred to in subsections 
(a) and (b) of this section (whether or not bilateral in form) shall be 
deemed to be bilateral agreements between the United States and each 
other party to such subsidiary agreement. The consent or concurrence of 
any other party shall not be required for the effectiveness of any 
actions taken by the United States in conjunction with either the 
Federated States of Micronesia or the Marshall Islands which are 
intended to affect the implementation, modification, suspension, or 
termination of any such subsidiary agreement (or any provision thereof) 
as regards the mutual responsibilities of the United States and the 
party in conjunction with whom the actions are taken.

(f) Effective date

    (1) The President shall not agree to an effective date for the 
Compact, as authorized by this section, until after certifying to 
Congress that the agreements described in section 1902 of this title and 
section 1903 of this title have been concluded.
    (2) Any agreement concluded with the Federated States of Micronesia 
or the Marshall Islands pursuant to sections 1902 and 1903 of this title 
and any agreement which would amend, change, or terminate any subsidiary 
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 appropriate 
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 Public Law 
94-329.
    (4) The subsidiary agreements or 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.
        (B) Articles III, IV, V, VI, VII, VIII, IX, X, and XI (except 
    for Section 7 thereof) of the agreement referred to in section 
    462(e) of the Compact.
        (C) Articles IV, V, X, XIV, XVI, and XVIII of the agreement 
    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(g) of the Compact.
        (E) Articles II, V, VI, and VIII of the agreement referred to in 
    section 462(h) of the Compact.
        (F) The Agreement set forth on pages 388 through 391 of House 
    Document 98-192 of March 30, 1984.

    (5) No agreement between the United States and the Government of 
either the Federated States of Micronesia or the Marshall Islands which 
would amend, change, or terminate any subsidiary 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 agreement to the President of the Senate and the 
Speaker of the House of Representatives together with an explanation of 
the agreement and the reasons therefore.

(Pub. L. 99-239, title I, Sec. 101, Jan. 14, 1986, 99 Stat. 1773.)

                       References in Text

    The Compact, referred to in text, is the Compact of Free Association 
between the Government of the United States and the Governments of the 
Marshall Islands and the Federated States of Micronesia, which is 
contained in section 201 of Pub. L. 99-239, set out below.
    This joint resolution, referred to in subsecs. (a), (b), (c), and 
(e), is Pub. L. 99-239, Jan. 14, 1986, 99 Stat. 1770, as amended, known 
as the Compact of Free Association Act of 1985, which is classified 
principally to this subchapter and chapter 19 (Sec. 2001 et seq.) of 
this title. For complete classification of this Act to the Code, see 
Short Title note below.
    For Oct. 21, 1986, as the effective date of the Compact of Free 
Association with the Marshall Islands, and Nov. 3, 1986, as the 
effective date of the Compact of Free Association with the Federated 
States of Micronesia, referred to in subsecs. (a), (b), and (f), see 
Proc. No. 5564, Nov. 3, 1986, 51 F.R. 40399, set out as a note under 
section 1801 of this title.
    Section 601(b) of Public Law 94-329, referred to in subsec. (f)(3), 
is section 601(b) of Pub. L. 94-329, title VI, June 30, 1976, 90 Stat. 
765, which is not classified to the Code.

                          Codification

    Section was formerly set out as a note under section 1681 of this 
title.


                               Short Title

    Section 1(a) of Pub. L. 99-239 provided that: ``This joint 
resolution [enacting this subchapter, chapter 19 (Sec. 2001 et seq.) of 
this title, and provisions set out below], together with the Table of 
Contents in subsection (b) of this section [99 Stat. 1770], may be cited 
as the `Compact of Free Association Act of 1985'.''


                Regulations Regarding Habitual Residence

    Pub. L. 104-208, div. C, title VI, Sec. 643, Sept. 30, 1996, 110 
Stat. 3009-708, provided that: ``Not later than 6 months after the date 
of the enactment of this Act [Sept. 30, 1996], the Commissioner of 
Immigration and Naturalization shall issue regulations governing rights 
of `habitual residence' in the United States under the terms of the 
following:
        ``(1) The Compact of Free Association between the Government of 
    the United States and the Governments of the Marshall Islands and 
    the Federated States of Micronesia (48 U.S.C. 1901 note).
        ``(2) The Compact of Free Association between the Government of 
    the United States and the Government of Palau (48 U.S.C. 1931 
    note).''


Ratification of Certain Agreements Between United States and Governments 
   of Republic of Marshall Islands and Federated States of Micronesia

    Pub. L. 101-62, July 26, 1989, 103 Stat. 162, provided: ``That, 
pursuant to section 101(d) of Public Law 99-239 [48 U.S.C. 1901(d)], the 
following agreements are approved and shall enter into force in 
accordance with their terms:
        ``(1) `Agreement Between the Government of the United States and 
    the Government of the Republic of the Marshall Islands to Amend the 
    Governmental Representation Provisions of the Compact of Free 
    Association Pursuant to section 432 of the Compact', signed on March 
    18, 1988; and
        ``(2) `Agreement Between the Government of the United States and 
    the Government of the Federated States of Micronesia to Amend the 
    Governmental Representation Provisions of the Compact of Free 
    Association Pursuant to section 432 of the Compact', signed on March 
    9, 1988.''


                             Recital Clauses

    Pub. L. 99-239 which enacted this subchapter and chapter 19 of this 
title contained several ``Whereas'' clauses reading as follows:
    ``Whereas the United States, in accordance with the Trusteeship 
Agreement, the Charter of the United Nations and the objectives of the 
international trusteeship system, has promoted the development of the 
peoples of the Trust Territory toward self-government or independence as 
appropriate to the particular circumstances of the Trust Territory and 
its peoples and the freely expressed wishes of the peoples concerned; 
and
    ``Whereas the United States, in response to the desires of the 
peoples of the Federated States of Micronesia and the Marshall Islands 
expressed through their freely-elected representatives and by the 
official pronouncements and enactments of their lawfully constituted 
governments, and in consideration of its own obligations under the 
Trusteeship Agreement to promote self-determination, entered into 
political status negotiations with representatives of the peoples of the 
Federated States of Micronesia, and the Marshall Islands; and
    ``Whereas these negotiations resulted in the `Compact of Free 
Association' [set out below] which, together with its related 
agreements, was signed by the United States and by the Federated States 
of Micronesia and the Republic of the Marshall Islands on October 1, 
1982 and June 25, 1983, respectively; and
    ``Whereas the Compact of Free Association was approved by majorities 
of the peoples of the Federated States of Micronesia and the Marshall 
Islands in United Nations-observed plebiscites conducted on June 21, 
1983 and September 7, 1983, respectively; and
    ``Whereas the Compact of Free Association has been approved by the 
Governments of the Federated States of Micronesia and the Marshall 
Islands in accordance with their respective constitutional processes, 
thus completing fully for the Federated States of Micronesia and the 
Marshall Islands their domestic approval processes with respect to the 
Compact as contemplated in Compact Section 411''.


                       Compact of Free Association

    Section 201 of Pub. L. 99-239 provided that: ``The Compact of Free 
Association is as follows:

                  ``COMPACT OF FREE ASSOCIATION


                               ``Preamble

``the government of the united states of america and the governments of 
       the marshall islands and the federated states of micronesia

    ``Affirming that their Governments and their relationships as 
Governments are founded upon respect for human rights and fundamental 
freedoms for all, and that the peoples of the Trust Territory of the 
Pacific Islands have the right to enjoy self-government; and
    ``Affirming the common interests of the United States of America and 
the peoples of the Trust Territory of the Pacific Islands in creating 
close and mutually beneficial relationships through two free and 
voluntary associations of their respective Governments; and
    ``Affirming the interest of the Government of the United States in 
promoting the economic advancement and self-sufficiency of the peoples 
of the Trust Territory of the Pacific Islands; and
    ``Recognizing that their previous relationship has been based upon 
the International Trusteeship System of the United Nations Charter, and 
in particular Article 76 of the Charter; and that pursuant to Article 76 
of the Charter, the peoples of the Trust Territory have progressively 
developed their institutions of self-government, and that in the 
exercise of their sovereign right to self-determination they have, 
through their freely-expressed wishes, adopted Constitutions appropriate 
to their particular circumstances; and
    ``Recognizing their common desire to terminate the Trusteeship and 
establish two new government-to-government relationships each of which 
is in accordance with a new political status based on the freely-
expressed wishes of peoples of the Trust Territory of the Pacific 
Islands and appropriate to their particular circumstances; and
    ``Recognizing that the peoples of the Trust Territory of the Pacific 
Islands have and retain their sovereignty and their sovereign right to 
self-determination and the inherent right to adopt and amend their own 
Constitutions and forms of government and that the approval of the entry 
of their respective Governments into this Compact of Free Association by 
the peoples of the Trust Territory of the Pacific Islands constitutes an 
exercise of their sovereign right to self-determination;
    ``NOW, THEREFORE, AGREE to enter into relationships of free 
association which provide a full measure of self-government for the 
peoples of the Marshall Islands and the Federated States of Micronesia; 
and
    ``FURTHER AGREE that the relationships of free association derive 
from and are as set forth in this Compact; and that, during such 
relationships of free association, the respective rights and 
responsibilities of the Government of the United States and the 
Governments of the freely associated states of the Marshall Islands and 
the Federated States of Micronesia in regard to these relationships of 
free association derive from and are as set forth in this Compact.

                           ``TITLE ONE

                    ``GOVERNMENTAL RELATIONS

                           ``Article I

                        ``Self-Government

``Section 111
    ``The peoples of the Marshall Islands and the Federated States of 
Micronesia, acting through the Governments established under their 
respective Constitutions, are self-governing.

                          ``Article II

                        ``Foreign Affairs

``Section 121
    ``(a) The Governments of the Marshall Islands and the Federated 
States of Micronesia have the capacity to conduct foreign affairs and 
shall do so in their own name and right, except as otherwise provided in 
this Compact.
    ``(b) The foreign affairs capacity of the Governments of the 
Marshall Islands and the Federated States of Micronesia includes:
        ``(1) the conduct of foreign affairs relating to law of the sea 
    and marine resources matters, including the harvesting, 
    conservation, exploration or exploitation of living and non-living 
    resources from the sea, seabed or subsoil to the full extent 
    recognized under international law;
        ``(2) the conduct of their commercial, diplomatic, consular, 
    economic, trade, banking, postal, civil aviation, communications, 
    and cultural relations, including negotiations for the receipt of 
    developmental loans and grants and the conclusion of arrangements 
    with other governments and international and intergovernmental 
    organizations, including any matters specially benefiting their 
    individual citizens.
    ``(c) The Government of the United States recognizes that the 
Governments of the Marshall Islands and the Federated States of 
Micronesia have the capacity to enter into, in their own name and right, 
treaties and other international agreements with governments and 
regional and international organizations.
    ``(d) In the conduct of their foreign affairs, the Governments of 
the Marshall Islands and the Federated States of Micronesia confirm that 
they shall act in accordance with principles of international law and 
shall settle their international disputes by peaceful means.
``Section 122
    ``The Government of the United States shall support applications by 
the Governments of the Marshall Islands and the Federated States of 
Micronesia for membership or other participation in regional or 
international organizations as may be mutually agreed. The Government of 
the United States agrees to accept for training and instruction at the 
Foreign Service Institute, established under 22 U.S.C. 4021, citizens of 
the Marshall Islands and the Federated States of Micronesia. The 
qualifications of candidates for such training and instruction and all 
other terms and conditions of participation by citizens of the Marshall 
Islands and the Federated States of Micronesia in Foreign Service 
Institute programs shall be as mutually agreed between the Government of 
the United States and the Governments of the Marshall Islands and the 
Federated States of Micronesia.
``Section 123
    ``(a) In recognition of the authority and responsibility of the 
Government of the United States under Title Three, the Governments of 
the Marshall Islands and the Federated States of Micronesia shall 
consult, in the conduct of their foreign affairs, with the Government of 
the United States.
    ``(b) In recognition of the respective foreign affairs capacities of 
the Governments of the Marshall Islands and the Federated States of 
Micronesia, the Government of the United States, in the conduct of its 
foreign affairs, shall consult with the Government of the Marshall 
Islands or the Federated States of Micronesia on matters which the 
Government of the United States regards as relating to or affecting any 
such Government.
``Section 124
    ``The Government of the United States may assist or act on behalf of 
the Government of the Marshall Islands or the Federated States of 
Micronesia in the area of foreign affairs as may be requested and 
mutually agreed from time to time. The Government of the United States 
shall not be responsible to third parties for the actions of the 
Government of the Marshall Islands or the Federated States of Micronesia 
undertaken with the assistance or through the agency of the Government 
of the United States pursuant to this Section unless expressly agreed.
``Section 125
    ``The Government of the United States shall not be responsible for 
nor obligated by any actions taken by the Government of the Marshall 
Islands or the Federated States of Micronesia in the area of foreign 
affairs, except as may from time to time be expressly agreed.
``Section 126
    ``At the request of the Government of the Marshall Islands or the 
Federated States of Micronesia and subject to the consent of the 
receiving state, the Government of the United States shall extend 
consular assistance on the same basis as for citizens of the United 
States to citizens of the Marshall Islands and the Federated States of 
Micronesia for travel outside the Marshall Islands and the Federated 
States of Micronesia, the United States and its territories and 
possessions.
``Section 127
    ``Except as otherwise provided in this Compact or its related 
agreements, all obligations, responsibilities, rights and benefits of 
the Government of the United States as Administering Authority which 
have resulted from the application pursuant to the Trusteeship Agreement 
of any treaty or other international agreement to the Trust Territory of 
the Pacific Islands on the day preceding the effective date of this 
Compact are no longer assumed and enjoyed by the Government of the 
United States.

                          ``Article III

                        ``Communications

``Section 131
    ``(a) The Governments of the Marshall Islands and the Federated 
States of Micronesia have full authority and responsibility to regulate 
their respective domestic and foreign communications, and the Government 
of the United States shall provide communications assistance in 
accordance with the terms of a separate agreement which shall come into 
effect simultaneously with this Compact, and such agreement shall remain 
in effect until such time as any election is made pursuant to Section 
131(b) and which shall provide for the following:
        ``(1) the Government of the United States remains the sole 
    administration entitled to make notification to the International 
    Frequency Registration Board of the International Telecommunications 
    Union of frequency assignments to radio communications stations 
    respectively in the Marshall Islands and the Federated States of 
    Micronesia; and to submit to the International Frequency 
    Registration Board seasonal schedules for the broadcasting stations 
    respectively in the Marshall Islands and the Federated States of 
    Micronesia in the bands allocated exclusively to the broadcasting 
    service between 5,950 and 26,100 kHz and in any other additional 
    frequency bands that may be allocated to use by high frequency 
    broadcasting stations; and
        ``(2) the United States Federal Communications Commission has 
    jurisdiction, pursuant to the Communications Act of 1934, 47 U.S.C. 
    151 et seq., and the Communications Satellite Act of 1962, 47 U.S.C. 
    721 et seq., over all domestic and foreign communications services 
    furnished by means of satellite earth terminal stations where such 
    stations are owned or operated by United States common carriers and 
    are located in the Marshall Islands or the Federated States of 
    Micronesia.
    ``(b) The Government of the Marshall Islands or the Federated States 
of Micronesia may elect at any time to undertake the functions 
enumerated in Section 131(a) and previously performed by the Government 
of the United States. Upon such election, the Government of the United 
States shall so notify the International Frequency Registration Board 
and shall take such other actions as may be necessary to transfer to the 
electing Government the notification authority referred to in Section 
131(a) and all rights deriving from the previous exercise of any such 
notification authority by the Government of the United States.
``Section 132
    ``The Governments of the Marshall Islands and the Federated States 
of Micronesia shall permit the Government of the United States to 
operate telecommunications services in the Marshall Islands and the 
Federated States of Micronesia to the extent necessary to fulfill the 
obligations of the Government of the United States under this Compact in 
accordance with the terms of separate agreements which shall come into 
effect simultaneously with this Compact.

                          ``Article IV

                          ``Immigration

``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 the Trust Territory of the Pacific 
    Islands, as defined in Title 53 of the Trust Territory Code in force 
    on January 1, 1979, and has become a citizen of the Marshall Islands 
    or the Federated States of Micronesia;
        ``(2) a person who acquires the citizenship of the Marshall 
    Islands or the Federated States of Micronesia at birth, on or after 
    the effective date of the respective Constitution;
        ``(3) a naturalized citizen of the Marshall Islands or the 
    Federated States of Micronesia who has been an actual resident there 
    for not less than five years after attaining such naturalization and 
    who holds a certificate of actual residence; or
        ``(4) a person entitled to citizenship in the Marshall Islands 
    by lineal descent whose name is included in a list to be furnished 
    by the Government of the Marshall Islands to the United States 
    Immigration and Naturalization Service and any descendants of such 
    persons, provided that such person holds a certificate of lineal 
    descent issued by the Government of the Marshall Islands.
Such persons shall be considered to have the permission of the Attorney 
General of the United States to accept employment in the United States.
    ``(b) The right of such persons to establish habitual residence in a 
territory or possession of the United States may, however, be subjected 
to nondiscriminatory limitations provided for:
        ``(1) in statutes or regulations of the United States; or
        ``(2) in those statutes or regulations of the territory or 
    possession concerned which are authorized by the laws of the United 
    States.
    ``(c) Section 141(a) does not confer on a citizen of the Marshall 
Islands or the Federated States of Micronesia the right to establish the 
residence necessary for naturalization under the Immigration and 
Nationality Act, or to petition for benefits for alien relatives under 
that Act. Section 141(a), however, shall not prevent a citizen of the 
Marshall Islands or the Federated States of Micronesia from otherwise 
acquiring such rights or lawful permanent resident alien status in the 
United States.
``Section 142
    ``(a) Any citizen or national of the United States may enter into, 
lawfully engage in occupations, and reside in the Marshall Islands or 
the Federated States of Micronesia, subject to the rights of those 
Governments to deny entry to or deport any such citizen or national as 
an undesirable alien. A citizen or national of the United States may 
establish habitual residence or domicile in the Marshall Islands or the 
Federated States of Micronesia only in accordance with the laws of the 
jurisdiction in which habitual residence or domicile is sought.
    ``(b) With respect to the subject matter of this Section, the 
Government of the Marshall Islands or the Federated States of Micronesia 
shall accord to citizens and nationals of the United States treatment no 
less favorable than that accorded to citizens of other countries; any 
denial of entry to or deportation of a citizen or national of the United 
States as an undesirable alien must be pursuant to reasonable statutory 
grounds.
``Section 143
    ``(a) The privileges set forth in Sections 141 and 142 shall not 
apply to any person who takes an affirmative step to preserve or acquire 
a citizenship or nationality other than that of the Marshall Islands, 
the Federated States of Micronesia or the United States.
    ``(b) Every person having the privileges set forth in Sections 141 
and 142 who possesses a citizenship or nationality other than that of 
the Marshall Islands, the Federated States of Micronesia or the United 
States ceases to have these privileges two years after the effective 
date of this Compact, or within six months after becoming 21 years of 
age, whichever comes later, unless such person executes an oath of 
renunciation of that other citizenship or nationality.
``Section 144
    ``(a) A citizen or national of the United States who, after 
notification to the Government of the United States of an intention to 
employ such person by the Government of the Marshall Islands or the 
Federated States of Micronesia, commences employment with such 
Government shall not be deprived of his United States nationality 
pursuant to Section 349(a)(2) and (a)(4) of the Immigration and 
Nationality Act, 8 U.S.C. 1481(a)(2) and (a)(4).
    ``(b) Upon such notification by the Government of the Marshall 
Islands or the Federated States of Micronesia, the 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 the Marshall Islands or the Federated States of Micronesia 
on the effective date of this Compact with respect to the positions held 
by them at that time.

                           ``Article V

                        ``Representation

``Section 151
    ``The Government of the United States and the Government of the 
Marshall Islands or the Federated States of Micronesia may establish and 
maintain representative offices in the capital of the other for the 
purpose of maintaining close and regular consultations on matters 
arising in the course of the relationship of free association and 
conducting other government business. The Governments may establish and 
maintain additional offices on terms and in locations as may be mutually 
agreed.
``Section 152
    ``(a) The premises of such representative offices, and their 
archives wherever located, shall be inviolable. The property and assets 
of such representative offices shall be immune from search, requisition, 
attachment and any form of seizure unless such immunity is expressly 
waived. Official communications in transit shall be inviolable and 
accorded the freedom and protections accorded by recognized principles 
of international law to official communications of a diplomatic mission.
    ``(b) Persons designated by the sending Government may serve in the 
capacity of its resident representatives with the consent of the 
receiving Government. Such designated persons shall be immune from civil 
and criminal process relating to words spoken or written and all acts 
performed by them in their official capacity and falling within their 
functions as such representatives, except insofar as such immunity may 
be expressly waived by the sending Government. While serving in a 
resident representative capacity, such designated persons shall not be 
liable to arrest or detention pending trial, except in the case of a 
grave crime and pursuant to a decision by a competent judicial 
authority, and such persons shall enjoy immunity from seizure of 
personal property, immigration restrictions, and laws relating to alien 
registration, fingerprinting, and the registration of foreign agents.
    ``(c) The sending Governments and their respective assets, income 
and other property shall be exempt from all direct taxes, except those 
direct taxes representing payment for specific goods and services, and 
shall be exempt from all customs duties and restrictions on the import 
or export of articles required for the official functions and personal 
use of their representatives and representative offices.
    ``(d) Persons designated by the sending Government to serve in the 
capacity of its resident representatives shall enjoy the same taxation 
exemptions as are set forth in Article 34 of the Vienna Convention on 
Diplomatic Relations.
    ``(e) The privileges, exemptions and immunities accorded under this 
Section are not for the personal benefit of the individuals concerned 
but are to safeguard the independent exercise of their official 
functions. Without prejudice to those privileges, exemptions and 
immunities, it is the duty of all such persons to respect the laws and 
regulations of the Government to which they are assigned.
``Section 153
    ``(a) Any citizen or national of the United States who, after 
consultation between the designating Government and the Government of 
the United States, is designated by the Government of the Marshall 
Islands or the Federated States of Micronesia as its agent, shall enjoy 
exemption from the requirements of the laws of the United States 
relating to the registration of foreign agents. The Government of the 
United States shall promptly comply with a request for consultation made 
by the prospective designating Government. During the course of the 
consultation, the Government of the United States may, in its 
discretion, and subject to the provisions of the Privacy Act, 5 U.S.C. 
552a, transmit such information concerning the prospective designee as 
may be available to it to the prospective designating Government.
    ``(b) Any citizen or national of the United States may be employed 
by the Government of the Marshall Islands or the Federated States of 
Micronesia to represent to foreign governments, officers or agents 
thereof the positions of the Government of the Marshall Islands or the 
Federated States of Micronesia, without regard to the provisions of 18 
U.S.C. 953.

                          ``Article VI

                   ``Environmental Protection

``Section 161
    ``The Governments of the United States, the Marshall Islands and the 
Federated States of Micronesia declare that it is their policy to 
promote efforts to prevent or eliminate damage to the environment and 
biosphere and to enrich understanding of the natural resources of the 
Marshall Islands and the Federated States of Micronesia. In order to 
carry out this policy, the Government of the United States and the 
Governments of the Marshall Islands and the Federated States of 
Micronesia agree to the following mutual and reciprocal undertakings.
    ``(a) The Government of the United States:
        ``(1) shall continue to apply the environmental controls in 
    effect on the day preceding the effective date of this Compact to 
    those of its continuing activities subject to Section 161(a)(2), 
    unless and until those controls are modified under Sections 
    161(a)(3) and 161(a)(4);
        ``(2) shall apply the National Environmental Policy Act of 1969, 
    83 Stat. 852, 42 U.S.C. 4321 et seq., to its activities under the 
    Compact and its related agreements as if the Marshall Islands and 
    the Federated States of Micronesia were the United States;
        ``(3) shall comply also, in the conduct of any activity 
    requiring the preparation of an Environmental Impact Statement under 
    Section 161(a)(2), with standards substantively similar to those 
    required by the following laws of the United States, taking into 
    account the particular environments of the Marshall Islands and the 
    Federated States of Micronesia: the Endangered Species Act of 1973, 
    87 Stat. 884, 16 U.S.C. 1531 et seq.; the Clean Air Act, 77 Stat. 
    392, 42 U.S.C. Supp. 7401 et seq.; the Clean Water Act (Federal 
    Water Pollution Control Act), 86 Stat. 896, 33 U.S.C. 1251 et seq.; 
    the Ocean Dumping Act (Title I of the Marine Protection, Research 
    and Sanctuaries Act of 1972), 86 Stat. 1053, 33 U.S.C. 1411 et seq.; 
    the Toxic Substances Control Act, 90 Stat. 2003, 15 U.S.C. 2601 et 
    seq.; the Resources Conservation and Recovery Act of 1976, 90 Stat. 
    2796, 42 U.S.C. 6901 et seq.; and such other environmental 
    protection laws of the United States as may be mutually agreed from 
    time to time with the Government of the Marshall Islands or the 
    Federated States of Micronesia; and
        ``(4) shall develop, prior to conducting any activity requiring 
    the preparation of an Environmental Impact Statement under Section 
    161(a)(2), appropriate mechanisms, including regulations or other 
    judicially reviewable standards and procedures, to regulate its 
    activities governed by Section 161(a)(3) in the Marshall Islands and 
    the Federated States of Micronesia in a manner appropriate to the 
    special governmental relationship set forth in this Compact. The 
    agencies of the Government of the United States designated by law to 
    administer the laws set forth in Section 161(a)(3) shall participate 
    as appropriate in the development of any regulation, standard or 
    procedure under this Section, and the Government of the United 
    States shall provide the affected Government of the Marshall Islands 
    or the Federated States of Micronesia with the opportunity to 
    comment during such development.
    ``(b) The Governments of the Marshall Islands and the Federated 
States of Micronesia shall develop standards and procedures to protect 
their environments. As a reciprocal obligation to the undertakings of 
the Government of the United States under this Article, the Governments 
of the Marshall Islands and the Federated States of Micronesia, taking 
into account their particular environments, shall develop standards for 
environmental protection substantively similar to those required of the 
Government of the United States by Section 161(a)(3) prior to their 
conducting activities in the Marshall Islands and the Federated States 
of Micronesia, respectively, substantively equivalent to activities 
conducted there by the Government of the United States and, as a further 
reciprocal obligation, shall enforce those standards.
    ``(c) Section 161(a), including any standard or procedure applicable 
thereunder, and Section 161(b) may be modified or superseded in whole or 
in part by agreement of the Government of the United States and the 
Government of the Marshall Islands or the Federated States of 
Micronesia.
    ``(d) In the event that an Environmental Impact Statement is no 
longer required under the laws of the United States for major federal 
actions significantly affecting the quality of the human environment, 
the regulatory regime established under Sections 161(a)(3) and 161(a)(4) 
shall continue to apply to such activities of the Government of the 
United States until amended by mutual agreement.
    ``(e) The President of the United States may exempt any of the 
activities of the Government of the United States under this Compact and 
its related agreements from any environmental standard or procedure 
which may be applicable under Sections 161(a)(3) and 161(a)(4) if the 
President determines it to be in the paramount 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 pursuant to this 
subsection, the views of the affected Government of the Marshall Islands 
or the Federated States of Micronesia shall be sought and considered to 
the extent practicable. If the President grants such an exemption, to 
the extent practicable, a report with his reasons for granting such 
exemption shall be given promptly to the affected Government.
    ``(f) The laws of the United States referred to in Section 161(a)(3) 
shall apply to the activities of the Government of the United States 
under this Compact and its related agreements only to the extent 
provided for in this Section.
``Section 162
    ``The Government of the Marshall Islands or the Federated States of 
Micronesia may bring an action for judicial review of any administrative 
agency action or any activity of the Government of the United States 
pursuant to Sections 161(a), 161(d) or 161(e) or for enforcement of the 
obligations of the Government of the United States arising thereunder. 
The United States District Court for the District of Hawaii and the 
United States District Court for the District of Columbia shall have 
jurisdiction over such action or activity, and over actions brought 
under Section 172(b) which relate to the activities of the Government of 
the United States and its officers and employees, governed by Section 
161, provided that:
    ``(a) Such actions may only be civil actions for any appropriate 
civil relief other than punitive damages against the Government of the 
United States or, where required by law, its officers in their official 
capacity; no criminal actions may arise under this Section.
    ``(b) Actions brought pursuant to this Section may be initiated only 
by the Government concerned.
    ``(c) Administrative agency actions arising under Section 161 shall 
be reviewed pursuant to the standard of judicial review set forth in 5 
U.S.C. 706.
    ``(d) The District Court shall have jurisdiction to issue all 
necessary processes, and the Government of the United States agrees to 
submit itself to the jurisdiction of the court; decisions of the 
District Court shall be reviewable in the United States Court of Appeals 
for the Ninth Circuit or the United States Court of Appeals for the 
District of Columbia, respectively, or in the United States Supreme 
Court as provided by the laws of the United States.
    ``(e) The judicial remedy provided for in this Section shall be the 
exclusive remedy for the judicial review or enforcement of the 
obligations of the Government of the United States under this Article 
and actions brought under Section 172(b) which relate to the activities 
of the Government of the United States and its officers and employees 
governed by Section 161.
    ``(f) In actions pursuant to this Section, the Governments of the 
Marshall Islands and the Federated States of Micronesia shall be treated 
as if they were United States citizens.
``Section 163
    ``(a) For the purpose of gathering data necessary to study the 
environmental effects of activities of the Government of the United 
States subject to the requirements of this Article, the Governments of 
the Marshall Islands and the Federated States of Micronesia shall be 
granted access to facilities operated by the Government of the United 
States in the Marshall Islands and the Federated States of Micronesia, 
to the extent necessary for this purpose, except to the extent such 
access would unreasonably interfere with the exercise of the authority 
and responsibility of the Government of the United States under Title 
Three.
    ``(b) The Government of the United States, in turn, shall be granted 
access to the Marshall Islands or the Federated States of Micronesia for 
the purpose of gathering data necessary to discharge its obligations 
under this Article, except to the extent such access would unreasonably 
interfere with the exercise of the authority and responsibility of the 
Government of the Marshall Islands or the Federated States of Micronesia 
under Title One, and to the extent necessary for this purpose shall be 
granted access to documents and other information to the same extent 
similar access is provided those Governments under the Freedom of 
Information Act, 5 U.S.C. 552.
    ``(c) The Governments of the Marshall Islands and the Federated 
States of Micronesia shall not impede efforts by the Government of the 
United States to comply with applicable standards and procedures.

                          ``Article VII

                   ``General Legal Provisions

``Section 171
    ``Except as provided in this Compact or its related agreements, the 
application of the laws of the United States to the Trust Territory of 
the Pacific Islands by virtue of the Trusteeship Agreement ceases with 
respect to the Marshall Islands and the Federated States of Micronesia 
as of the effective date of this Compact.
``Section 172
    ``(a) Every citizen of the Marshall Islands or the Federated States 
of Micronesia who is not a resident of the United States shall enjoy the 
rights and remedies under the laws of the United States enjoyed by any 
non-resident alien.
    ``(b) The Governments of the Marshall Islands and the Federated 
States of Micronesia and every citizen of the Marshall Islands or the 
Federated States of Micronesia shall be considered a `person' within the 
meaning of the Freedom of Information Act, 5 U.S.C. 552, and of the 
judicial review provisions of the Administrative Procedure Act, 5 U.S.C. 
701-706, except that only the Government of the Marshall Islands or the 
Federated States of Micronesia may seek judicial review under the 
Administrative Procedure Act or judicial enforcement under the Freedom 
of Information Act when such judicial review or enforcement relates to 
the activities of the Government of the United States governed by 
Sections 161 and 162.
``Section 173
    ``The Governments of the United States, the Marshall Islands and the 
Federated States of Micronesia agree to adopt and enforce such measures, 
consistent with this Compact and its related agreements, as may be 
necessary to protect the personnel, property, installations, services, 
programs and official archives and documents maintained by the 
Government of the United States in the Marshall Islands and the 
Federated States of Micronesia pursuant to this Compact and its related 
agreements and by those Governments in the United States pursuant to 
this Compact and its related agreements.
``Section 174
    ``Except as otherwise provided in this Compact and its related 
agreements:
    ``(a) The Governments of the Marshall Islands and the Federated 
States of Micronesia shall be immune from the jurisdiction of the courts 
of the United States, and the Government of the United States shall be 
immune from the jurisdiction of the courts of the Marshall Islands and 
the Federated States of Micronesia.
    ``(b) The Government of the United States accepts responsibility for 
and shall pay:
        ``(1) any unpaid money judgment rendered by the High Court of 
    the Trust Territory of the Pacific Islands against the Government of 
    the Trust Territory of the Pacific Islands or the Government of the 
    United States with regard to any cause of action arising as a result 
    of acts or omissions of the Government of the Trust 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 hearing, that such judgment is manifestly erroneous as 
to law or fact, or manifestly excessive. In either of such cases the 
United States Court of Appeals for the Federal Circuit shall have 
jurisdiction to modify such judgment.
    ``(d) The Governments of the Marshall Islands and the Federated 
States of Micronesia shall not be immune from the jurisdiction of the 
courts of the United States, and the Government of the United States 
shall not be immune from the jurisdiction of the courts of the Marshall 
Islands and the Federated States of Micronesia in any case in which the 
action is based on a commercial activity of the defendant Government 
where the action is brought, or in a case in which damages are sought 
for personal injury or death or damage to or loss of property occurring 
where the action is brought.
``Section 175
    ``A separate agreement, which shall come into effect simultaneously 
with this Compact, shall be concluded between the Government of the 
United States and the Governments of the Marshall Islands and the 
Federated States of Micronesia regarding mutual assistance and 
cooperation in law enforcement matters including the pursuit, capture, 
imprisonment and extradition of fugitives from justice and the transfer 
of prisoners. The separate agreement shall have the force of law. In the 
United States, the laws of the United States governing international 
extradition, including 18 U.S.C. 3184, 3186 and 3188-3195, shall be 
applicable to the extradition of fugitives under the separate agreement, 
and the laws of the United States governing the transfer of prisoners, 
including 18 U.S.C. 4100-4115, shall be applicable to the transfer of 
prisoners under the separate agreement.
``Section 176
    ``The Governments of the Marshall Islands and the Federated States 
of Micronesia confirm that final judgments in civil cases rendered by 
any court of the Trust Territory of the Pacific Islands shall continue 
in full force and effect, subject to the constitutional power of the 
courts of the Marshall Islands and the Federated States of Micronesia to 
grant relief from judgments in appropriate cases.
``Section 177
    ``(a) The Government of the United States accepts the responsibility 
for compensation owing to citizens of the Marshall Islands, or the 
Federated States of Micronesia (or Palau) for loss or damage to property 
and person of the citizens of the Marshall Islands, or the Federated 
States of Micronesia, resulting from the nuclear testing program which 
the Government of the United States conducted in the Northern Marshall 
Islands between June 30, 1946, and August 18, 1958.
    ``(b) The Government of the United States and the Government of the 
Marshall Islands shall set forth in a separate agreement provisions for 
the just and adequate settlement of all such claims which have arisen in 
regard to the Marshall Islands and its citizens and which have not as 
yet been compensated or which in the future may arise, for the continued 
administration by the Government of the United States of direct 
radiation related medical surveillance and treatment programs and 
radiological monitoring activities and for such additional programs and 
activities as may be mutually agreed, and for the assumption by the 
Government of the Marshall Islands of responsibility for enforcement of 
limitations on the utilization of affected areas developed in 
cooperation with the Government of the United States and for the 
assistance by the Government of the United States in the exercise of 
such responsibility as may be mutually agreed. This separate agreement 
shall come into effect simultaneously with this Compact and shall remain 
in effect in accordance with its own terms.
    ``(c) The Government of the United States shall provide to the 
Government of the Marshall Islands, on a grant basis, the amount of $150 
million to be paid and distributed in accordance with the separate 
agreement referred to in this Section, and shall provide the services 
and programs set forth in this separate agreement, the language of which 
is incorporated into this Compact.
``Section 178
    ``(a) The federal agencies of the Government of the United States 
which provide the services and related programs in the Marshall Islands 
or the Federated States of Micronesia pursuant to Articles II and III of 
Title Two are authorized to settle and pay tort claims arising in the 
Marshall Islands or the Federated States of Micronesia from the 
activities of such agencies or from the acts or omissions of the 
employees of such agencies. Except as provided in Section 178(b), the 
provisions of 28 U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively 
to such administrative settlements and payments.
    ``(b) Claims under Section 178(a) which cannot be settled under 
Section 178(a) shall be disposed of exclusively in accordance with 
Article II of Title Four. Arbitration awards rendered pursuant to this 
subsection shall be paid out of funds under 31 U.S.C. 1304.
    ``(c) The Government of the United States and the Government of the 
Marshall Islands or the Federated States of Micronesia shall, in the 
separate agreements referred to in Section 232, provide for:
        ``(1) the administrative settlement of claims referred to in 
    Section 178(a), including designation of local agents in the 
    Marshall Islands and each State of the Federated States of 
    Micronesia; such agents to be empowered to accept, investigate and 
    settle such claims, in a timely manner, as provided in such separate 
    agreements; and
        ``(2) arbitration, referred to in Section 178(b), in a timely 
    manner, at a site convenient to the claimant, in the event a claim 
    is not otherwise settled pursuant to Section 178(a).
    ``(d) The provisions of Section 174(d) shall not apply to claims 
covered by this Section.

                           ``TITLE TWO

                      ``ECONOMIC RELATIONS

                           ``Article I

                       ``Grant Assistance

``Section 211
    ``(a) In order to assist the Governments of the Marshall Islands and 
the Federated States of Micronesia in their efforts to advance the 
economic self-sufficiency of their peoples and in recognition of the 
special relationship that exists between them and the United States, the 
Government of the United States shall provide on a grant basis the 
following amounts:
        ``(1) to the Government of the Marshall Islands, $26.1 million 
    annually for five years commencing on the effective date of this 
    Compact, $22.1 million annually for five years commencing on the 
    fifth anniversary of the effective date of this Compact, and $19.1 
    million annually for five years commencing on the tenth anniversary 
    of this Compact. Over this fifteen-year period, the Government of 
    the Marshall Islands shall dedicate an average of no less than 40 
    percent of these amounts to the capital account subject to provision 
    for revision of this percentage incorporated into the plan referred 
    to in Section 211(b); and
        ``(2) to the Government of the Federated States of Micronesia, 
    $60 million annually for five years commencing on the effective date 
    of this Compact, $51 million annually for five years commencing on 
    the fifth anniversary of the effective date of this Compact, and $40 
    million annually for five years commencing on the tenth anniversary 
    of the effective date of this Compact. Over this fifteen year 
    period, the Government of the Federated States of Micronesia shall 
    dedicate an average of no less than 40 percent of these amounts 
    annually to the capital account subject to provision for revision of 
    this percentage incorporated into the plan referred to in Section 
    211(b). To take into account the special nature of the assistance, 
    to be provided under this paragraph and Sections 212(b), 213(c), 
    214(c), 215(a)(3), 215(b)(3), 216(a), 216(b), 221(a), and 221(b), 
    the division of these amounts among the national and state 
    governments of the Federated States of Micronesia shall be certified 
    to the Government of the United States by the Government of the 
    Federated States of Micronesia.
    ``(b) The annual expenditure of the grant amounts specified for the 
capital account in Section 211(a) by the Governments of the Marshall 
Islands and the Federated States of Micronesia shall be in accordance 
with official overall economic development plans provided by those 
Governments and concurred in by the Government of the United States 
prior to the effective date of this Compact. These plans may be amended 
from time to time by the Government of the Marshall Islands or the 
Federated States of Micronesia.
    ``(c) The Government of the United States and the Governments of the 
Marshall Islands and the Federated States of Micronesia recognize that 
the achievement of the goals of the plans referred to in Section 211(b) 
depends upon the availability of adequate internal revenue as well as 
economic assistance from sources outside of the Marshall Islands and the 
Federated States of Micronesia, including the Government of the United 
States, and may, in addition, be affected by the impact of exceptional 
economically adverse circumstances. Each of the Governments of the 
Marshall Islands and the Federated States of Micronesia shall therefore 
report annually to the President of the United States and to the 
Congress of the United States on the implementation of the plans and on 
their use of the funds specified in this Article. These reports shall 
outline the achievements of the plans to date and the need, if any, for 
an additional authorization and appropriation of economic assistance for 
that year to account for any exceptional, economically adverse 
circumstances. It is understood that the Government of the United States 
cannot be committed by this Section to seek or support such additional 
economic assistance.
``Section 212
    ``In recognition of the special development needs of the Federated 
States of Micronesia, the Government of the United States shall provide 
to the Government of the Federated States of Micronesia $1 million 
annually for fourteen years commencing on the first anniversary of the 
effective date of this Compact. This amount may be used by the 
Government of the Federated States of Micronesia to defray current 
account expenditures attendant to the operation of the United States 
military Civic Action Teams made available in accordance with the 
separate agreement referred to in Section 227.
``Section 213
    ``(a) The Government of the United States shall provide on a grant 
basis $1.9 million annually to the Government of the Marshall Islands in 
conjunction with Section 321(a). The Government of the Marshall Islands, 
in its use of such funds, shall take into account the impact of the 
activities of the Government of the United States in the Kwajalein Atoll 
area of the Marshall Islands.
    ``(b) The Government of the United States shall provide on a grant 
basis to the Government of the Federated States of Micronesia the sum of 
$160,000 in conjunction with Section 321(a). This sum shall be made 
available concurrently with the grant assistance provided pursuant to 
this Article during the first year after the effective date of this 
Compact. The Government of the Federated States of Micronesia, in its 
use of such funds, shall take into account the impact of the activities 
of the Government of the United States in Yap State, Federated States of 
Micronesia.
``Section 214
    ``As a contribution to efforts aimed at achieving increased self-
sufficiency in energy production, the Government of the United States 
shall provide on a current account grant basis for fourteen years 
commencing on the first anniversary of the effective date of this 
Compact the following amounts:
    ``(a) To the Government of the Marshall Islands, $2 million 
annually.
    ``(b) To the Government of the Federated States of Micronesia, $3 
million annually.
``Section 215
    ``(a) As a contribution to the current account operations and 
maintenance of communications systems, the Government of the United 
States shall provide on a grant basis for fifteen years commencing on 
the effective date of this Compact the following amounts:
        ``(1) to the Government of the Marshall Islands, $300,000 
    annually; and
        ``(2) to the Government of the Federated States of Micronesia, 
    $600,000 annually.
    ``(b) For the purpose of acquiring such communications hardware as 
may be located within the Marshall Islands and the Federated States of 
Micronesia or for such other current or capital account activity as may 
be selected, the Government of the United States shall provide, 
concurrently with the grant assistance provided pursuant to this Article 
during the first year after the effective date of this Compact, the sum 
of $9 million to be allocated as follows:
        ``(1) to the Government of the Marshall Islands, $3 million; and
        ``(2) to the Government of the Federated States of Micronesia, 
    $6 million.
``Section 216
    ``(a) The Government of the United States shall provide on a current 
account basis an annual grant of $5.369 million for fifteen years 
commencing on the effective date of this Compact for the purposes set 
forth below:
        ``(1) $890,000 annually for the surveillance and enforcement by 
    the Governments of the Marshall Islands and the Federated States of 
    Micronesia of their respective maritime zones;
        ``(2) $1.791 million annually for health and medical programs, 
    including referrals to hospital and treatment centers; and
        ``(3) $2.687 million annually for a scholarship fund or funds to 
    support the post-secondary education of citizens of the Marshall 
    Islands and the Federated States of Micronesia attending United 
    States accredited, post-secondary institutions in the United States, 
    its territories and possessions, the Marshall Islands or the 
    Federated States of Micronesia. The curricula criteria for the award 
    of scholarships shall be designed to advance the purposes of the 
    plans referred to in Section 211(b).
    ``(b) The Government of the United States shall provide the sum of 
$1.333 million as a contribution to the commencement of activities 
pursuant to Section 216(a)(1).
    ``(c) The annual grants referred to in Section 216(a) and the sum 
referred to in Section 216(b) shall be made available by the Government 
of the United States promptly after it receives instruction for their 
distribution agreed upon by the Governments of the Marshall Islands and 
the Federated States of Micronesia.
``Section 217
    ``Except as otherwise provided, the amounts stated in Sections 211, 
212, 214, 215 and 231 shall be adjusted for each Fiscal Year by the 
percent which equals two-thirds of the percentage change in the United 
States Gross National Product Implicit Price Deflator, or seven percent, 
whichever is less in any one year, using the beginning of Fiscal Year 
1981 as the base.
``Section 218
    ``If in any year the funds made available by the Government of the 
United States for that year pursuant to this Article or Section 231 are 
not completely obligated by the recipient Government, the unobligated 
balances shall remain available in addition to the funds to be provided 
in subsequent years.
``Section 219
    ``All funds previously appropriated to the Trust Territory of the 
Pacific Islands which are unobligated by the Government of the Trust 
Territory of the Pacific Islands as of the effective date of this 
Compact shall accrue to the Governments of the Marshall Islands and the 
Federated States of Micronesia for the purposes for which such funds 
were originally appropriated as determined by the Government of the 
United States.

                          ``Article II

                      ``Program Assistance

``Section 221
    ``(a) The Government of the United States shall make available to 
the Marshall Islands and the Federated States of Micronesia, in 
accordance with and to the extent provided in the separate agreements 
referred to in section 232, without compensation and at the levels 
equivalent to those available to the Trust Territory of the Pacific 
Islands during the year prior to the effective date of this Compact, the 
services and related programs:
        ``(1) of the United States Weather Service;
        ``(2) of the United States Federal Emergency Management Agency;
        ``(3) provided pursuant to the Postal Reorganization Act, 39 
    U.S.C. 101 et seq.;
        ``(4) of the United States Federal Aviation Administration; and
        ``(5) of the United States Civil Aeronautics Board or its 
    successor agencies which has the authority to implement the 
    provisions of paragraph 5 of Article IX of such separate agreements, 
    the language of which is incorporated into this Compact.
    ``(b) The Government of the United States, recognizing the special 
needs of the Marshall Islands and the Federated States of Micronesia 
particularly in the fields of education and health care, shall make 
available, as provided by the laws of the United States, the annual 
amount of $10 million which shall be allocated in accordance with the 
provisions of the separate agreement referred to in Section 232.
    ``(c) The Government of the United States shall make available to 
the Marshall Islands and the Federated States of Micronesia such 
alternate energy development projects, studies and conservation 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 separate agreements referred to in Section 232, 
which shall also set forth the extent to which services and programs 
shall be provided to the Marshall Islands and the Federated States of 
Micronesia.
``Section 222
    ``The Government of the United States and the Government of the 
Marshall Islands or the Federated States of Micronesia shall consult 
regularly or upon request regarding:
        ``(a) The economic development of the Marshall Islands or the 
    Federated States of Micronesia; or
        ``(b) The services and programs referred to in this Article. 
    These services and programs shall continue to be provided by the 
    Government of the United States unless their modification is 
    provided by mutual agreement or their termination in whole or in 
    part is requested by any recipient Government.
``Section 223
    ``The citizens of the Marshall Islands and the Federated States of 
Micronesia who are receiving post-secondary educational assistance from 
the Government of the United States on the day 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 the 
Marshall Islands or the Federated States of Micronesia may agree from 
time to time to the extension of additional United States grant 
assistance, services and programs as provided by the Laws of the United 
States, to the Marshall Islands or the Federated States of Micronesia, 
respectively.
``Section 225
    ``The Governments of the Marshall Islands and the Federated States 
of Micronesia shall make available to the Government of the United 
States at no cost such land as may be necessary for the operations of 
the services and programs provided pursuant to this Article, and such 
facilities as are provided by the Government of the Marshall Islands or 
the Federated States of Micronesia at no cost to the Government of the 
United States as of the effective date of this Compact or as may be 
mutually agreed thereafter.
``Section 226
    ``The Governments of the Marshall Islands and the Federated States 
of Micronesia may request, from time to time, technical assistance from 
the federal agencies and institutions of the Government of the United 
States, which are authorized to grant such technical assistance in 
accordance with its laws and which shall grant such technical assistance 
in a manner which gives priority consideration to the Marshall Islands 
and the Federated States of Micronesia over other recipients not a part 
of the United States, its territories or possessions. The Government of 
the United States shall coordinate the provision of such technical 
assistance in consultation with the respective recipient Government.
``Section 227
    ``In recognition of the special development needs of the Federated 
States of Micronesia, the Government of the United States shall make 
available United States military Civic Action Teams for use in the 
Federated States of Micronesia under terms and conditions specified in a 
separate agreement which shall come into effect simultaneously with this 
Compact.

                          ``Article III

                   ``Administrative Provisions

``Section 231
    ``Upon the thirteenth anniversary of the effective date of this 
Compact, the Government of the United States and the Governments of the 
Marshall Islands and the Federated States of Micronesia shall commence 
negotiations regarding those provisions of this Compact which expire on 
the fifteenth anniversary of its effective date. If these negotiations 
are not concluded by the fifteenth anniversary of the effective date of 
this Compact, the period of negotiations shall extend for not more than 
two additional years, during which time the provisions of this Compact 
including Title Three shall remain in full force and effect. During this 
additional period of negotiations, the Government of the United States 
shall continue its assistance to the Governments with which it is 
negotiating pursuant to this Section at a level which is the average of 
the annual amounts granted pursuant to Sections 211, 212, 213, 214, 215 
and 216 during the first fifteen years of this Compact. The average 
annual amount paid pursuant to Sections 211, 212, 214 and 215 shall be 
adjusted pursuant to Section 217.
``Section 232
    ``The specific nature, extent and contractual arrangements of the 
services and programs provided for in Section 221 as well as the legal 
status of agencies of the Government of the United States, their 
civilian employees and contractors, and the dependents of such personnel 
while present in the Marshall Islands or the Federated States of 
Micronesia, and other arrangements in connection with a service or 
program furnished by the Government of the United States, are set forth 
in separate agreements which shall come into effect simultaneously with 
this Compact.
``Section 233
    ``The Government of the United States, in consultation with the 
Governments of the Marshall Islands and the Federated States of 
Micronesia, shall determine and implement procedures for the periodic 
audit of all grants and other assistance made under Article I of this 
Title and of all funds expended for the services and programs provided 
under Article II of this Title. Such audits shall be conducted on an 
annual basis during the first five years following the effective date of 
this Compact and shall be at no cost to the Government of the Marshall 
Islands or the Federated States of Micronesia.
``Section 234
    ``Title to the property of the Government of the United States 
situated in the Trust Territory of the Pacific Islands 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 
the Marshall Islands and the Federated States of Micronesia as set forth 
in a separate agreement which shall come into effect simultaneously with 
this Compact. The provisions of this Section shall not apply to the 
property of the Government of the United States for which the Government 
of the United States determines a continuing requirement.
``Section 235
    ``(a) Funds held in trust by the High Commissioner of the Trust 
Territory of the Pacific Islands, in his official capacity, as of the 
effective date of this Compact shall remain available as trust funds to 
their designated beneficiaries. The Government of the United States, in 
consultation with the Government of the Marshall Islands or the 
Federated States of Micronesia, shall appoint a new trustee who shall 
exercise the functions formerly exercised by the High Commissioner of 
the Trust Territory of the Pacific Islands.
    ``(b) To provide for the continuity of administration, and to assure 
the Governments of the Marshall Islands and the Federated States of 
Micronesia that the purposes of the laws of the United States are 
carried out and that the funds of any other trust fund in which the High 
Commissioner of the Trust Territory of the Pacific Islands has authority 
of a statutory or customary nature shall remain available as trust funds 
to their designated beneficiaries, the Government of the United States 
agrees to assume the authority formerly vested in the High Commissioner 
of the Trust Territory of the Pacific Islands.
``Section 236
    ``Except as otherwise provided, approval of this Compact by the 
Government of the United States shall constitute a pledge of the full 
faith and credit of the United States for the full payment of the sums 
and amounts specified in Articles I and III of this Title. The 
obligation of the United States under Articles I and III of this Title 
shall be enforceable in the United States Claims Court [now United 
States Court of Federal Claims], 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
    ``The Marshall Islands and the Federated States of Micronesia are 
not included in the customs territory of the United States.
``Section 242
    ``For the purpose of assessing duties on their products imported 
into the customs territory of the United States, the Marshall Islands 
and the Federated States of Micronesia shall be treated as if they were 
insular possessions of the United States within the meaning of General 
Headnote 3(a) of the Tariff Schedules of the United States. The 
exceptions, valuation procedures and all other provisions of General 
Headnote 3(a) shall apply to any product deriving from the Marshall 
Islands or the Federated States of Micronesia.
``Section 243
    ``All products of the Marshall Islands or the Federated States of 
Micronesia imported into the customs territory of the United States 
which are not accorded the treatment set forth in Section 242 and all 
products of the United States imported into the Marshall Islands or the 
Federated States of Micronesia shall receive treatment no less favorable 
than that accorded like products of any foreign country with respect to 
customs duties or charges of a similar nature and with respect to laws 
and 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 the Marshall Islands and the Federated States of 
Micronesia. Should the Government of the Marshall Islands or the 
Federated States of Micronesia act to institute another currency, the 
terms of an appropriate currency transitional period shall be as agreed 
with the Government of the United States.
``Section 252
    ``The Government of the Marshall Islands or the Federated States of 
Micronesia may, with respect to United States persons, tax income 
derived from sources within its respective jurisdiction, property 
situated therein, including transfers of such property by gift or at 
death, and products consumed therein, in such manner as such Government 
deems appropriate. The determination of the source of any income, or the 
situs of any property, shall for purposes of this Compact be made 
according to the United States Internal Revenue Code.
``Section 253
    ``A citizen of the Marshall Islands or the Federated States of 
Micronesia, domiciled therein, shall be exempt from:
    ``(a) Income taxes imposed by the Government of the United States 
upon fixed or determinable annual income.
    ``(b) Estate, gift, and generation-skipping transfer taxes imposed 
by the Government of the United States.
``Section 254
    ``(a) In determining any income tax imposed by the Government of the 
Marshall Islands or the Federated States of Micronesia, those 
Governments shall have authority to impose tax upon income derived by a 
resident of the Marshall Islands or the Federated States of Micronesia 
from sources without the Marshall Islands and the Federated States of 
Micronesia, in the same manner and to the same extent as those 
Governments impose tax upon income derived from within their respective 
jurisdictions. If the Government of the Marshall Islands or the 
Federated States of Micronesia exercises such authority as provided in 
this subsection, any individual resident of the Marshall Islands or the 
Federated States of Micronesia who is subject to tax by the Government 
of the United States on income which is also taxed by the Government of 
the Marshall Islands or the Federated States of Micronesia shall be 
relieved of liability to the Government of the United States for the tax 
which, but for this subsection, would otherwise be imposed by the 
Government of the United States on such income. For purposes of this 
Section, the term `resident of the Marshall Islands or the Federated 
States of Micronesia' shall be deemed to include any person who was 
physically present in the Marshall Islands or the Federated States of 
Micronesia for a period of 183 or more days during any taxable year; 
provided, that as between the Government of the Marshall Islands and the 
Federated States of Micronesia, the authority to tax an individual 
resident of the Marshall Islands or the Federated States of Micronesia 
in respect of income from sources without the Marshall Islands and the 
Federated States of Micronesia as provided in this subsection may be 
exercised only by the Government in whose jurisdiction such individual 
was physically present for the greatest number of days during the 
taxable year.
    ``(b) If the Government of the Marshall Islands or the Federated 
States of Micronesia subjects income to taxation 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
    ``Where not otherwise manifestly inconsistent with the intent of 
this Compact, provisions in the United States Internal Revenue Code that 
are applicable to possessions of the United States as of January 1, 1980 
shall be treated as applying to the Marshall Islands and the Federated 
States of Micronesia. If such provisions of the Internal Revenue Code 
are amended, modified or repealed after that date, such provisions shall 
continue in effect as to the Marshall Islands and the Federated States 
of Micronesia for a period of two years during which time the Government 
of the United States and the Governments of the Marshall Islands and the 
Federated States of Micronesia shall negotiate an agreement which shall 
provide benefits substantially equivalent to those which obtained under 
such provisions.

                          ``TITLE THREE

                ``SECURITY AND DEFENSE RELATIONS

                           ``Article I

                 ``Authority and Responsibility

``Section 311
    ``(a) The Government of the United States has full authority and 
responsibility for security and defense matters in or relating to the 
Marshall Islands and the Federated States of Micronesia.
    ``(b) This authority and responsibility includes:
        ``(1) the obligation to defend the Marshall Islands and the 
    Federated States of Micronesia and their peoples from attack or 
    threats thereof as the United States and its citizens are defended;
        ``(2) the option to foreclose access to or use of the Marshall 
    Islands and the Federated States of Micronesia by military personnel 
    or for the military purposes of any third country; and
        ``(3) the option to establish and use military areas and 
    facilities in the Marshall Islands and the Federated States of 
    Micronesia, subject to the terms of the separate agreements referred 
    to in Sections 321 and 323.
    ``(c) The Government of the United States confirms that it shall act 
in accordance with the principles of international law and the Charter 
of the United Nations in the exercise of this authority and 
responsibility.
``Section 312
    ``Subject to the terms of any agreements negotiated in accordance 
with Sections 321 and 323, the Government of the United States may 
conduct within the lands, waters and airspace of the Marshall Islands 
and the Federated States of Micronesia the activities and operations 
necessary for the exercise of its authority and responsibility under 
this Title.
``Section 313
    ``(a) The Governments of the Marshall Islands and the Federated 
States of Micronesia shall refrain from actions which the Government of 
the United States determines, after appropriate consultation with those 
Governments, to be incompatible with its authority and responsibility 
for security and defense matters in or relating to the Marshall Islands 
and the Federated States of Micronesia.
    ``(b) The consultations referred to in this Section shall be 
conducted expeditiously at senior levels of the Governments concerned, 
and the subsequent determination by the Government of the United States 
referred to in this Section shall be made only at senior interagency 
levels of the Government of the United States.
    ``(c) The Government of the Marshall Islands or the Federated States 
of Micronesia shall be afforded, on an expeditious basis, an opportunity 
to raise its concerns with the United States Secretary of State 
personally and the United States Secretary of Defense personally 
regarding any determination made in accordance with this Section.
``Section 314
    ``(a) Unless otherwise agreed, the Government of the United States 
shall not, in the Marshall Islands or the Federated States of 
Micronesia:
    ``(1) test by detonation or dispose of any nuclear weapon, nor test, 
dispose of, or discharge any toxic chemical or biological weapon; or
    ``(2) test, dispose of, or discharge any other radioactive, toxic 
chemical or biological materials in an amount or manner which would be 
hazardous to public health or safety.
    ``(b) Unless otherwise agreed, other than for transit or over flight 
purposes or during time of a national emergency declared by the 
President of the United States, a state of war declared by the Congress 
of the United States or as necessary to defend against an actual or 
impending armed attack on the United States, the Marshall Islands or the 
Federated States of Micronesia, the Government of the United States 
shall not store in the Marshall Islands or the Federated States of 
Micronesia any toxic chemical weapon, nor any radioactive materials nor 
any toxic chemical materials intended for weapons use.
    ``(c) Radioactive, toxic chemical, or biological materials not 
intended for weapons use shall not be affected by Section 314(b).
    ``(d) No material or substance referred to in this Section shall be 
stored in the Marshall Islands or the Federated States of Micronesia 
except in an amount and manner which would not be hazardous to public 
health or safety. In determining what shall be an amount or manner which 
would be hazardous to public health or safety under this Section, the 
Government of the United States shall comply with any applicable mutual 
agreement, international guidelines accepted by the Government of the 
United States, and the laws of the United States and their implementing 
regulations.
    ``(e) Any exercise of the exemption authority set forth in Section 
161(e) shall have no effect on the obligations of the Government of the 
United States under this Section or on the application of this 
subsection.
    ``(f) The provisions of this Section shall apply in the areas in 
which the Government of the Marshall Islands or the Federated States of 
Micronesia exercises jurisdiction over the living resources of the 
seabed, subsoil or water column adjacent to its coasts.
``Section 315
    ``The Government of the United States may invite members of the 
armed forces of other countries to use military areas and facilities in 
the Marshall Islands or the Federated States of Micronesia, in 
conjunction with and under the control of United States Armed Forces. 
Use by units of the armed forces of other countries of such military 
areas and facilities, other than for transit and overflight purposes, 
shall be subject to consultation with and, in the case of major units, 
approval by the Government of the Marshall Islands or the Federated 
States of Micronesia.
``Section 316
    ``The authority and responsibility of the Government of the United 
States under this Title may not be transferred or otherwise assigned.

                          ``Article II

            ``Defense Facilities and Operating Rights

``Section 321
    ``(a) Specific arrangements for the establishment and use by the 
Government of the United States of military areas and facilities in the 
Marshall Islands or the Federated States of Micronesia are set forth in 
separate agreements which shall come into effect simultaneously with 
this Compact.
    ``(b) If, in the exercise of its authority and responsibility under 
this Title, the Government of the United States requires the use of 
areas within the Marshall Islands or the Federated States of Micronesia 
in addition to those for which specific arrangements are concluded 
pursuant to Section 321(a), it may request the Government concerned to 
satisfy those requirements through leases or other arrangements. The 
Government of the Marshall Islands or the Federated States of Micronesia 
shall sympathetically consider any such request and shall establish 
suitable procedures to discuss it with and provide a prompt response to 
the Government of the United States.
    ``(c) The Government of the United States recognizes and respects 
the scarcity and special importance of land in the Marshall Islands and 
the Federated States of Micronesia. In making any requests pursuant to 
Section 321(b), the Government of the United States shall follow the 
policy of requesting the minimum area necessary to accomplish the 
required security and defense purpose, of requesting only the minimum 
interest in real property necessary to support such purpose, and of 
requesting first to satisfy its requirement through public real 
property, where available, rather than through private real property.
``Section 322
    ``The Government of the United States shall provide and maintain 
fixed and floating aids to navigation in the Marshall Islands and the 
Federated States of Micronesia at least to the extent necessary for the 
exercise of its authority and responsibility under this Title.
``Section 323
    ``The military operating rights of the Government of the United 
States and the legal status and contractual arrangements of the United 
States Armed Forces, their members, and associated civilians, while 
present in the Marshall Islands or the Federated States of Micronesia, 
are set forth in separate agreements which shall come into effect 
simultaneously with this Compact.

                          ``Article III

    ``Defense Treaties and International Security Agreements

``Section 331
    ``Subject to the terms of this Compact and its related agreements, 
the Government of the United States, exclusively, shall assume and 
enjoy, as to the Marshall Islands and the Federated States of 
Micronesia, all obligations, responsibilities, rights and benefits of:
    ``(a) Any defense treaty or other international security 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.
    ``(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 the Marshall Islands and the 
Federated States of Micronesia. Such a determination by the Government 
of the United States shall be preceded by appropriate consultation with 
the Government of the Marshall Islands or the Federated States of 
Micronesia.

                          ``Article IV

         ``Service in Armed Forces of the United States

``Section 341
    ``Any person entitled to the privileges set forth in Section 141 
shall be eligible to volunteer for service in the Armed Forces of the 
United States, but shall not be subject to involuntary 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 two qualified students, one each from the Marshall 
Islands and the Federated States of Micronesia, as may be nominated by 
their respective Governments, in each of:
    ``(a) The United States Coast Guard Academy pursuant to 14 U.S.C. 
195.
    ``(b) The United States Merchant Marine Academy pursuant to 46 
U.S.C. 1295b(b)(6), provided that the provisions of 46 U.S.C. 
1295b(b)(6)(C) shall not apply to the enrollment of students pursuant to 
Section 342(b) of this Compact.

                           ``Article V

                      ``General Provisions

``Section 351
    ``(a) The Government of the United States and the Government of the 
Marshall Islands or the Federated States of Micronesia shall establish 
two Joint Committees empowered to consider disputes under the 
implementation of this Title and its related agreements.
    ``(b) The membership of each Joint Committee shall comprise selected 
senior officials of each of the two participating Governments. The 
senior United States military commander in the Pacific area shall be the 
senior United States member of each Joint Committee. For the meetings of 
each Joint Committee, each of the two participating Governments may 
designate additional or alternate representatives as appropriate for the 
subject matter under consideration.
    ``(c) Unless otherwise mutually agreed, each Joint Committee shall 
meet semi-annually at a time and place to be designated, after 
appropriate consultation, by the Government of the United States. A 
Joint Committee also shall meet promptly upon request of either of its 
members. Upon notification by the Government of the United States, the 
Joint Committees so notified shall meet promptly in a combined session 
to consider matters within the jurisdiction of more than one Joint 
Committee. Each Joint Committee shall follow such procedures, including 
the establishment of functional subcommittees, as the members may from 
time to time agree.
    ``(d) Unresolved issues in each Joint Committee shall be referred to 
the Governments concerned for resolution, and the Government of the 
Marshall Islands or the Federated States of Micronesia shall be 
afforded, on an expeditious basis, an opportunity to raise its concerns 
with the United States Secretary of Defense personally regarding any 
unresolved issue which threatens its continued association with the 
Government of the United States.
``Section 352
    ``In the exercise of its authority and responsibility under Title 
Three, the Government of the United States shall accord due respect to 
the authority and responsibility of the Governments of the Marshall 
Islands and the Federated States of Micronesia under Titles One, Two and 
Four and to their responsibility to assure the well-being of their 
peoples.
``Section 353
    ``(a) The Government of the United States shall not include any of 
the Governments of the Marshall Islands and the Federated States of 
Micronesia as named parties to a formal declaration of war, without 
their respective consent.
    ``(b) Absent such consent, this Compact is without prejudice, on the 
ground of belligerence or the existence of a state of war, to any claims 
for damages which are advanced by the citizens, nationals or Government 
of the Marshall Islands or the Federated States of Micronesia, which 
arise out of armed conflict subsequent to the effective date of this 
Compact and which are:
        ``(1) petitions to the Government of the United States for 
    redress; or
        ``(2) claims in 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.
``Section 354
    ``(a) Notwithstanding any other provision of this Compact, the 
provisions of this Title are binding from the effective date of this 
Compact for a period of fifteen years between the Government of the 
United States and the Governments of the Marshall Islands and the 
Federated States of Micronesia and thereafter as mutually agreed or in 
accordance with Section 231, unless earlier terminated by mutual 
agreement pursuant to Section 441, or amended pursuant to Article III of 
Title Four.
    ``(b) The Government of the United States recognizes, in view of the 
special relationship between the Government of the United States and the 
Governments of the Marshall Islands and the Federated States of 
Micronesia, and in view of the existence of separate agreements with 
each of them pursuant to Sections 321 and 323, that, even if this Title 
should terminate, any attack on the Marshall Islands or the Federated 
States of Micronesia during the period in which such separate agreements 
are in effect, would constitute a threat to the peace and security of 
the entire region and a danger to the United States. In the event of 
such an attack, the Government of the United States would take action to 
meet the danger to the United States and to the Marshall Islands and the 
Federated States of Micronesia in accordance with its constitutional 
processes.

                          ``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 Territory of 
the Pacific Islands, and the Government of the Marshall Islands or the 
Federated States of Micronesia and subsequent to completion of the 
following:
    ``(a) Approval by the Government of the Marshall Islands or the 
Federated States of Micronesia in accordance with its constitutional 
processes.
    ``(b) Conduct of the plebiscite referred to in Section 412.
    ``(c) Approval by the Government of the United States in accordance 
with its constitutional processes.
``Section 412
    ``A plebiscite shall be conducted in each of the Marshall Islands 
and the Federated States of Micronesia for the free and voluntary choice 
by the peoples of the Trust Territory of the Pacific Islands of their 
future political status through informed and democratic processes. The 
Marshall Islands and the Federated States of Micronesia shall each be 
considered a voting jurisdiction, and the plebiscite shall be conducted 
under fair and equitable standards in each voting jurisdiction. The 
Administering Authority of the Trust Territory of the Pacific Islands, 
after consultation with the Governments of the Marshall Islands and the 
Federated States of Micronesia, shall fix the date on which the 
plebiscite shall be called in each voting jurisdiction. The plebiscite 
shall be called jointly by the Administering Authority of the Trust 
Territory of the Pacific Islands and the other Signatory Government 
concerned. The results of the plebiscite in each voting jurisdiction 
shall be determined by a majority of the valid ballots cast in that 
voting jurisdiction.

                          ``Article II

               ``Conference and Dispute Resolution

``Section 421
    ``The Government of the United States shall confer promptly at the 
request of the Government of the Marshall Islands or the Federated 
States of Micronesia and any of those Governments shall confer promptly 
at the request of the Government of the United States on matters 
relating to the provisions of this Compact or of its related agreements.
``Section 422
    ``In the event the Government of the United States, or the 
Government of the Marshall Islands or the Federated States of 
Micronesia, after conferring pursuant to Section 421, determines that 
there is a dispute and gives written notice thereof, the Governments 
which are parties to the dispute shall make a good faith effort to 
resolve the dispute among themselves.
``Section 423
    ``If a dispute between the Government of the United States and the 
Government of the Marshall Islands or the Federated States of Micronesia 
cannot be resolved within 90 days of written notification in the manner 
provided in Section 422, either party to the dispute may refer it to 
arbitration in accordance with Section 424.
``Section 424
    ``Should a dispute be referred to arbitration as provided for in 
Section 423, an Arbitration Board shall be established for the purpose 
of hearing the dispute and rendering a decision which shall be binding 
upon the two parties to the dispute unless the two parties mutually 
agree that the decision shall be advisory. Arbitration shall occur 
according to the following terms:
    ``(a) An Arbitration Board shall consist of a Chairman and two other 
members, each of whom shall be a citizen of a party to the dispute. Each 
of the two Governments which is a party to the 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 shall maintain a 
standing list of 10 candidates. The parties to the dispute shall jointly 
appoint a Chairman within 15 days after selection of the other members 
of the Arbitration Board. Failing agreement on a 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 V of Title One, Title Two, Title Four and 
their related agreements.
    ``(c) Each member of the Arbitration Board shall have one vote. Each 
decision of the Arbitration Board shall be reached by majority vote.
    ``(d) In determining any legal issue, the Arbitration Board may have 
reference to international law and, in such reference, shall apply as 
guidelines the provisions set forth in Article 38 of the Statute of the 
International Court of Justice.
    ``(e) The Arbitration Board shall adopt such rules for its 
proceedings as it may deem appropriate and necessary, but such rules 
shall not contravene the provisions of this Compact. Unless the parties 
provide otherwise by mutual agreement, the Arbitration Board shall 
endeavor to render its decision within 30 days after the conclusion of 
arguments. The Arbitration Board shall make findings of fact and 
conclusions of law and its members may issue dissenting or individual 
opinions. Except as may be otherwise decided by the Arbitration Board, 
one-half of all costs of the arbitration shall be borne by the 
Government of the United States and the remainder shall be borne by the 
other party to the dispute.

                          ``Article III

                           ``Amendment

``Section 431
    ``The provisions of this Compact may be amended as to the 
Governments of the Marshall Islands and the Federated States of 
Micronesia and as to the Government of the United States at any time by 
mutual agreement.
``Section 432
    ``The provisions of this Compact may be amended as to any one of the 
Governments of the Marshall Islands or the Federated States of 
Micronesia and as to the Government of the United States at any time by 
mutual agreement. The effect of any amendment made pursuant to this 
Section shall be restricted to the relationship between the Governments 
agreeing to such amendment, but the other Governments signatory to this 
Compact shall be notified promptly by the Government of the United 
States of any such amendment.

                          ``Article IV

                          ``Termination

``Section 441
    ``This Compact may be terminated as to any one of the Governments of 
the Marshall Islands or the Federated States of Micronesia and as to the 
Government of the United States by mutual agreement and subject to 
Section 451.
``Section 442
    ``This Compact may be terminated by the Government of the United 
States as to the Government of the Marshall Islands or the Federated 
States of Micronesia 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 
termination may be extended.
``Section 443
    ``This Compact shall be terminated, pursuant to their respective 
constitutional processes, by the Government of the Marshall Islands or 
the Federated States of Micronesia subject to Section 453 if the people 
represented by such Government vote in a plebiscite to terminate. Such 
Government shall notify the Government of the United States of its 
intention to call such a plebiscite which shall take place not earlier 
than three months after delivery of such notice. The plebiscite shall be 
administered by such Government in accordance with its constitutional 
and 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 certification of the results of 
the plebiscite, give notice of termination to the Government of the 
United States, such termination to be effective on the date specified in 
such notice but not earlier than three months following the date of 
delivery of such notice. The time specified in the notice of termination 
may be extended.

                           ``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.
``Section 452
    ``(a) Should termination occur pursuant to Section 442, the 
following provisions of this Compact shall remain in full force and 
effect until the fifteenth anniversary of the effective date of this 
Compact between the Government of the United States and the Government 
of the Marshall Islands or the Federated States of Micronesia and 
thereafter as mutually agreed:
        ``(1) Article VI and Sections 172, 173, 176 and 177 of Title 
    One;
        ``(2) Article I and Section 233 of Title Two;
        ``(3) Title Three; and
        ``(4) Articles II, III, V and VI of Title Four.
    ``(b) The Government of the United States shall also provide the 
Government as to which termination occurs pursuant to Section 442 with 
either the programs or services provided pursuant to Article II of Title 
Two as the time of termination, or their equivalent, as determined by 
the Government of the United States. Such assistance shall continue 
until the fifteenth anniversary of the effective date of this Compact, 
and thereafter as mutually agreed.
``Section 453
    ``(a) Should termination occur pursuant to Section 443, the 
following provisions of this Compact shall remain in full force and 
effect until the fifteenth anniversary of the effective date of this 
Compact between the Government of the United States and the Government 
of the Marshall Islands or the Federated States of Micronesia and 
thereafter as mutually agreed:
        ``(1) Article VI and Sections 172, 173, 176 and 177 of Title 
    One;
        ``(2) Title Three; and
        ``(3) Articles II, III, V and VI of Title Four.
    ``(b) Upon receipt of notice of termination pursuant to Section 443, 
the Government of the United States and the Government so terminating 
shall promptly consult with regard to their future relationship. These 
consultations shall determine the level of economic assistance which the 
Government of the United States shall provide to the Government so 
terminating for the period ending on the fifteenth anniversary of the 
effective date of this Compact provided that the annual amounts 
specified in Sections 211, 212, 214, 215 and 216 shall continue without 
diminution. Such amounts, with the exception of those specified in 
Section 216, shall be adjusted according to the formula set forth in 
Section 217.
``Section 454
    ``Notwithstanding any other provision of this Compact:
    ``(a) The Government of the United States reaffirms its continuing 
interest in promoting the long-term economic advancement and self-
sufficiency of the peoples of the Marshall Islands and the Federated 
States of Micronesia.
    ``(b) The separate agreements referred to in Article II of the Title 
Three shall remain in effect in accordance with their terms which shall 
also determine the duration of Section 213.

                          ``Article VI

                      ``Definition of Terms

``Section 461
    ``For the purpose of this Compact only and without prejudice to the 
views of the Government of the United States or the Government of the 
Marshall Islands or the Federated States of Micronesia as to the nature 
and extent of the jurisdiction under international law of any of them, 
the following terms shall have the following meanings:
    ``(a) `Trust Territory of the Pacific Islands' means the area 
established in the Trusteeship Agreement consisting of the 
administrative districts of Kosrae, Yap, Ponape, the Marshall Islands 
and Truk as described in Title One, Trust Territory Code, Section 1, in 
force on January 1, 1979. This term does not include the area of Palau 
or the Northern Mariana Islands.
    ``(b) `Trusteeship Agreement' means the agreement setting forth the 
terms of trusteeship for the Trust Territory of the Pacific Islands, 
approved by the Security Council of the United Nations April 2, 1947, 
and by the United States July 18, 1947, entered into force July 18, 
1947, 61 Stat. 3301, T.I.A.S. 1665, 8 U.N.T.S. 189.
    ``(c) `The Marshall Islands' and `the Federated States of 
Micronesia' are used in a geographic sense and include the land and 
water areas to the outer limits of the territorial sea and the air space 
above such areas as now or hereafter recognized by the Government of the 
United States.
    ``(d) `Government of the Marshall Islands' means the Government 
established and organized by the Constitution of the Marshall Islands 
including all the political subdivisions and entities comprising that 
Government.
    `` `Government of the Federated States of Micronesia' means the 
Government established and organized by the Constitution of the 
Federated States of Micronesia including all the political subdivisions 
and entities comprising that Government.
    ``(e) The following terms shall be defined consistent with the 1976 
Edition of the Radio Regulations of the International Telecommunications 
Union (ISBN 92-61-0081-5) as follows:
        ``(1) `Radio Communications' means telecommunication by means of 
    radio waves.
        ``(2) `Station' means one or more transmitters or receivers or a 
    combination of transmitters and receivers, including the accessory 
    equipment, necessary at one location for carrying on a radio 
    communication service; each station shall be classified by the 
    service in which it operates permanently or temporarily.
        ``(3) `Broadcasting Service' means a radio communication service 
    in which the transmissions are intended for direct reception by the 
    general public, and which may include sound transmissions, 
    television transmissions or other types of transmissions.
        ``(4) `Broadcasting Station' means a station in the broadcasting 
    service.
    ``(f) `Frequency Assignment' means the same as `Frequency 
Assignment' means in the 1976 Edition of the Radio Regulations of the 
International Telecommunications Union (ISBN 92-61-0081-5).
    ``(g) `Habitual Residence' means a place of general abode or a 
principal, actual dwelling place of a continuing or lasting nature; 
provided, however, that this term shall not apply to the residence of 
any person who entered the United States for the purpose of full-time 
studies as long as such person maintains that status, or who has been 
physically present in the United States, the Marshall Islands, or the 
Federated States of Micronesia for less than one year, or who is a 
dependent of a resident representative, as described in Section 152.
    ``(h) For the purposes of Article IV of Title One of this Compact:
        ``(1) `Actual Residence' means physical presence in the Marshall 
    Islands or the Federated States of Micronesia during eighty-five 
    percent of the period of residency required by Section 141(a)(3); 
    and
        ``(2) `Certificate of Actual Residence' means a certificate 
    issued to a naturalized citizen by the Government which has 
    naturalized him stating that the citizen has complied with the 
    actual residence requirement of Section 141(a)(3).
    ``(i) `Military Areas and Facilities' means those areas and 
facilities in the Marshall Islands or the Federated States of Micronesia 
reserved or acquired by the Government of the Marshall Islands or the 
Federated States of Micronesia for use by the Government of the United 
States, as set forth in the separate agreements referred to in Section 
321.
    ``(j) `Capital Account' means, for each year of the Compact, those 
portions of the total grant assistance provided in Article I of Title 
Two, adjusted by Section 217, which are to be obligated for:
        ``(1) the construction or major repair of capital 
    infrastructure; or
        ``(2) public and private sector projects identified in the 
    official overall economic development plan.
    ``(k) `Current Account' means, for each year of the Compact, those 
portions of the total grant assistance provided in Article I of Title 
Two, adjusted by Section 217, which are to be obligated for recurring 
operational activities including infrastructure maintenance as 
identified in the annual budget justifications submitted yearly to the 
Government of the United States.
    ``(l) `Official Overall Economic Development Plan' means the 
documented program of annual development which identifies the specific 
policy and project activities necessary to achieve a specified set of 
economic goals and objectives during the period of free association, 
consistent with the economic assistance authority in Title Two. Such a 
document should include an analysis of population trends, manpower 
requirements, social needs, gross national product estimates, resource 
utilization, infrastructure needs and expenditures, and the specific 
private sector projects required to develop the local economy of the 
Marshall Islands or the Federated States of Micronesia. Project 
identification should include initial cost estimates, with project 
purposes related to specific development goals and objectives.
    ``(m) `Tariff Schedules of the United States' means the Tariff 
Schedules of the United States as amended from time to time and as 
promulgated pursuant to United States law and includes the Tariff 
Schedules of the United States Annotated (TSUSA), as amended.
    ``(n) `Vienna Convention on Diplomatic Relations' means the Vienna 
Convention on Diplomatic Relations, done April 18, 1961, 23 U.S.T. 3227, 
T.I.A.S. 7502, 500 U.N.T.S. 95.
``Section 462
    ``The Government of the United States and the Government of the 
Marshall Islands or the Federated States of Micronesia, as appropriate, 
shall conclude related agreements which shall come into effect and shall 
survive in accordance with their terms, as follows:
    ``(a) Agreement Regarding the Provision of Telecommunication 
Services by the Government of the United States to the Marshall Islands 
and the Federated States of Micronesia Concluded Pursuant to Section 131 
of the Compact of Free Association;
    ``(b) Agreement Regarding the Operation of Telecommunication 
Services of the Government of the United States in the Marshall Islands 
and the Federated States of Micronesia Concluded Pursuant to Section 132 
of the Compact of Free Association;
    ``(c) Agreement on Extradition, Mutual Assistance in Law Enforcement 
Matters and Penal Sanctions Concluded Pursuant to Section 175 of the 
Compact of Free Association;
    ``(d) Agreement Between the Government of the United States and the 
Government of the Marshall Islands for the Implementation of Section 177 
of the Compact of Free Association;
    ``(e) Federal Programs and Services Agreement Concluded Pursuant to 
Article II of Title Two and Section 232 of the Compact of Free 
Association;
    ``(f) Agreement Concluded Pursuant to Section 234 of the Compact of 
Free Association;
    ``(g) Agreement Regarding the Military Use and Operating Rights of 
the Government of the United States in the Marshall Islands Concluded 
Pursuant to Sections 321 and 323 of the Compact of Free Association;
    ``(h) Agreement Regarding the Military Use and Operating Rights of 
the Government of the United States in the Federated States of 
Micronesia Concluded Pursuant to Sections 227, 321 and 323 of the 
Compact of Free Association;
    ``(i) Status of Forces Agreement Concluded Pursuant to Section 323 
of the Compact of Free Association;
    ``(j) Agreement Between the Government of the United States and the 
Government of the Federated States of Micronesia Regarding Friendship, 
Cooperation and Mutual Security Concluded Pursuant to Sections 321 and 
323 of the Compact of Free Association; and
    ``(k) Agreement Between the Government of the United States and the 
Government of the Marshall Islands Regarding Mutual Security Concluded 
Pursuant to Sections 321 and 323 of the Compact of Free Association.
``Section 463
    ``(a) Except as set forth in Section 463(b), any reference in this 
Compact to a provision of the United States Code or the Statutes at 
Large of the United States constitutes the incorporation of the language 
of such provision into this Compact, as such provision was in force on 
January 1, 1980.
    ``(b) Any reference in Article VI of Title One and Sections 131, 
174, 175, 178 and 342 to a provision of the United States Code or the 
Statutes at Large of the United States or to the Privacy Act, the 
Freedom of Information Act or the Administrative Procedure Act 
constitutes the incorporation of the language of such provision into 
this Compact as such provision is in force on the effective date of this 
Compact or as it may be amended thereafter on a non-discriminatory basis 
according to the constitutional processes of the United States.

                          ``Article VII

                     ``Concluding Provisions

``Section 471
    ``(a) The Government of the United States and the Governments of the 
Marshall Islands and the Federated States of Micronesia agree that they 
have full authority under their respective Constitutions to enter into 
this Compact and its related 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) Each of the Governments of the United States, the Marshall 
Islands and the Federated States of Micronesia shall take all necessary 
steps, of a general or particular character, to ensure, not later than 
the effective date of this Compact, the conformity of its laws, 
regulations and administrative procedures with the provisions of this 
Compact.
    ``(c) Without prejudice to the effects of this Compact under 
international law, this Compact has the force and effect of a statute 
under the laws of the United States.
``Section 472
    ``This Compact may be accepted, by signature or otherwise, by the 
Government of the United States, the Government of the Marshall Islands, 
and the Government of the Federated States of Micronesia. Each 
Government accepting this Compact shall possess an original English 
language version.
    ``IN WITNESS WHEREOF, the undersigned, duly authorized, have signed 
this Compact of Free Association which shall come into effect in 
accordance with its terms between the Government of the United States 
and each of the other Governments signatory to this Compact.


               ``done at honolulu, hawaii, this 1st day of

            ``october, one thousand, nine hundred eighty-two

                          ``for the government

                                  ``of

                     ``the united states of america

``ambassador fred m. zeder, ii
    ``president's personal representative
        ``for micronesian status negotiations


               ``done at honolulu, hawaii, this 1st day of

            ``october, one thousand, nine hundred eighty-two

                          ``for the government

                                  ``of

                  ``the federated states of micronesia

``honorable andon l. amaraich
    ``chairman, commission on future
        ``political status and transition


            ``done at majuro, marshall islands, this 25th day

           ``of june, one thousand, nine hundred, eighty-three

                          ``for the government

                                  ``of

                     ``the united states of america

``ambassador fred m. zeder, ii
    ``president's personal representative
        ``for micronesian status negotiations


            ``done at majuro, marshall islands, this 25th day

           ``of june, one thousand, nine hundred eighty-three

                          ``for the government

                                  ``of

                         ``the marshall islands

``president amata kabua
    ``president of the republic
        ``of the marshall islands''.


  Clarification of Certain Trade and Tax Provisions of Compact of Free 
                               Association

    Title IV of Pub. L. 99-239 provided that:
``SEC. 401. FREELY ASSOCIATED STATES TARIFF TREATMENT.
    ``(a) Section 242.--Section 242 of the Compact [set out above] shall 
be construed and applied as if it read as follows:
`` `Section 242
    `` `The President shall proclaim the following tariff treatment for 
articles imported from the Federated States of Micronesia or the 
Marshall Islands which shall apply during the period of effectiven[e]ss 
of this title:
        `` `(1) Unless otherwise excluded, articles imported from the 
    Federated States of Micronesia or the Marshall Islands, subject 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.
        `` `(2) 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 and the Marshall Islands 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.
        `` `(3) The duty-free treatment provided under paragraph (1) 
    shall not apply to--
            `` `(A) watches, clocks, and timing apparatus provided for 
        in subpart E of part 2 of schedule 7 of the Tariff Schedules of 
        the United States;
            `` `(B) buttons (whether finished or not finished) provided 
        for in item 745.32 of such Schedules;
            `` `(C) textile and apparel articles which are subject to 
        textile agreements; and
            `` `(D) footwear, handbags, luggage, flat goods, work 
        gloves, and leather wearing apparel which were not eligible 
        articles for purposes of chapter V of the Trade Act of 1974 (19 
        U.S.C. 2461, et seq.) on April 1, 1984.
        `` `(4) 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 the Federated States of 
    Micronesia or the Marshall Islands, 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.'.
    ``(b) Section 243.--Section 243 of the Compact shall be construed 
and applied as if it read as follows:
`` `Section 243
    `` `Articles imported from the Federated States of Micronesia or the 
Marshall Islands which are not exempt from duty under paragraphs (1), 
(2), (3), and (4) 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 the Federated 
States of Micronesia or the Marshall Islands 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.'.
``SEC. 402. CONSTRUCTION OF SECTION 253 OF THE COMPACT.
    ``(a) Subsection (a) of section 253 of the Compact shall not apply.
    ``(b) Subsection (b) of section 253 of the Compact shall apply only 
to individuals who are nonresidents and not citizens of the United 
States.
``SEC. 403. CONSTRUCTION OF SECTION 254 OF THE COMPACT.
    ``The relief from liability referred to in the second sentence of 
section 254(a) of the Compact 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, and
        ``(2) relief in the form of the exclusion under section 911 of 
    the Internal Revenue Code of 1986 [26 U.S.C. 911].
``SEC. 404. CONSTRUCTION OF SECTION 255 OF THE COMPACT.
    ``Section 255 of the Compact shall be construed and applied as if it 
read as follows:
`` `Section 255
    `` `(a) Extension of Section 936 to the Marshall Islands and the 
Federated States of Micronesia.--For purposes of section 936 of the 
Internal Revenue Code of 1986, the Marshall Islands and the Federated 
States of Micronesia shall be treated as if they were possessions of the 
United States.
    `` `(b) Exchange of Information.--Subsection (a) shall not apply to 
the Marshall Islands and the Federated States of Micronesia (as the case 
may be) for any period after December 31, 1986, during which there is 
not in effect between the appropriate government 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 1986.
    `` `(c) Procedure If Section 936 Incentives Reduced.--If the tax 
incentives extended to the Marshall Islands and the Federated States of 
Micronesia under subsection (a) are, at any time during which the 
Compact is in effect, reduced, the Secretary of the Treasury shall 
negotiate an agreement with the Marshall Islands and the Federated 
States of Micronesia under which, when such agreement is approved by 
law, they 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 of the Compact. For purposes of Article V of 
Title Two of the Compact, the Secretary of the Treasury or his delegate 
shall be the member of such Board representing 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 equivalent benefits referred to in this subsection.'.
``SEC. 405. THE MARSHALL ISLANDS AND THE FEDERATED STATES OF MICRONESIA 
        TREATED AS NORTH AMERICAN AREA.
    ``For purposes of section 274(h)(3)(A) of the Internal Revenue Code 
of 1986 [26 U.S.C. 274(h)(3)(A)], the term `North American Area' shall 
include the Marshall Islands and the Federated States of Micronesia.
``SEC. 406. EFFECTIVE DATE.
    ``This title shall apply to income earned, and transactions 
occurring, after September 30, 1985, in taxable years ending after such 
date.
``SEC. 407. STUDY OF TAX PROVISIONS.
    ``The Secretary of the Treasury or his delegate--
        ``(1) shall conduct a study of the effects of the tax provisions 
    of the Compact (as clarified by the foregoing provisions of this 
    title), and
        ``(2) shall report the results of such study before October 1, 
    1987, to the Committee on Ways and Means of the House of 
    Representatives and the Committee on Finance of the Senate.
    [The due date for the report referred to in section 407 of Pub. L. 
99-239, set out above, was extended to Jan. 1, 1991 by Pub. L. 101-508, 
title XI, Sec. 11831(b), Nov. 5, 1990, 104 Stat. 1388-559.]
``SEC. 408. COORDINATION WITH OTHER PROVISIONS.
    ``Nothing in any provision of this joint resolution [see Short Title 
note above] (other than this title) which is inconsistent with any 
provision of this title shall have any force or effect.''

   Ex. Ord. No. 12569. Management of Compact of Free Association With 
 Republic of the Marshall Islands, Federated States of Micronesia, and 
                            Republic of Palau

    Ex. Ord. No. 12569, Oct. 16, 1986, 51 F.R. 37171, as amended by Ex. 
Ord. No. 12877, Nov. 3, 1993, 58 F.R. 59159, provided:
    By the authority vested in me as President by the Constitution and 
laws of the United States, including the Compact of Free Association 
(the Compact) [set out above] and Public Law 99-239, (the Act) [see 
Short Title note above], it is ordered as follows:
    Section 1. Responsibility of the Secretary of State. The Secretary 
of State shall conduct the government-to-government relations of the 
United States with the Republic of the Marshall Islands, the Federated 
States of Micronesia, and the Republic of Palau (the ``Freely Associated 
States''), including any subdivisions, officials or persons thereof, and 
may delegate or allocate such of his authority under this Order to such 
other United States officials as he may from time to time deem 
desirable. The authority of the Secretary of State shall include, 
consistent with Article V of Title One of the Compact and section 
105(b)(1) of the Act [48 U.S.C. 1905(b)(1)], the establishment and 
maintenance of representative offices in the Freely Associated States 
and supervision of the United States representatives and their staff. 
The Secretary also shall provide, in accordance with applicable law, for 
appropriate privileges, immunities, and assistance to representatives to 
the United States designated by the Governments of the Freely Associated 
States, together with their officers and staff. In accordance with 
applicable law and the provisions of this Order, the Secretary also 
shall have the authority and responsibility to take such other actions 
as may be necessary and appropriate to ensure that the authorities and 
obligations of the United States set forth in the Compact and its 
related agreements and in the laws of the United States as they relate 
to the conduct of government-to-government relations with the Freely 
Associated States are carried out. The Secretary shall provide from 
appropriations made to the Department of State such funds as may be 
necessary to carry out the provisions of this Order in relation to the 
activities of the Department of State.
    Sec. 2. Responsibility of the Secretary of the Interior. The 
Secretary of the Interior shall be responsible for seeking the 
appropriation of funds for and, in accordance with the laws of the 
United States, shall make available to the Freely Associated States the 
United States economic and financial assistance appropriated pursuant to 
Article I of Title Two of the Compact; the grant, service, and program 
assistance appropriated pursuant to Article II of Title Two of the 
Compact; and all other United States assistance appropriated pursuant to 
the Compact and its related agreements. The Secretary shall coordinate 
and monitor any program or any activity by any department or agency of 
the United States provided to the Freely Associated States and shall 
coordinate and monitor related economic development planning. This 
Section shall not apply to services provided by the Department of 
Defense to the Freely Associated States or to activities pursuant to 
Section 1 of this Order, including activities under the Peace Corps Act 
[22 U.S.C. 2501 et seq.].
    Sec. 3. Interagency Group on Freely Associated State Affairs and the 
Office of Freely Associated State Affairs.
    (a) There is established an Interagency Group on Freely Associated 
State Affairs for the purpose of providing guidance and oversight with 
respect to the establishment and implementation of policy concerning the 
Compact and United States relations with the Freely Associated States.
    (b) The Interagency Group shall consist of the Secretary of State or 
his designee, who shall chair the Group, and of the principal officers 
or their designees from the Departments of the Interior, Defense, 
Commerce, Energy, and Justice, the Organization of the Joint Chiefs of 
Staff, the Office of Management and Budget, the National Security 
Council, and such other departments and agencies as may from time to 
time be appropriate.
    (c) The Interagency Group shall make such recommendations as it 
shall deem appropriate to the President, through the Assistant to the 
President for National Security Affairs, concerning United States 
relations with the Freely Associated States. The Interagency Group also 
shall provide such guidance as it deems appropriate to departments and 
agencies delegated authority by this Order concerning administration of 
laws with respect to the Freely Associated States.
    (d) If any department or agency charged by this Order with 
implementation of the Compact or other laws of the United States with 
respect to the Freely Associated States concludes that noncompliance 
sanctions pursuant to section 105(g) of the Act [48 U.S.C. 1905(g)] are 
appropriate, it shall make appropriate recommendations to the 
Interagency Group. The Interagency Group shall consider these 
recommendations and report its findings to the President for his review 
in making that determination.
    (e)(1) The Secretary of State shall be responsible for the conduct 
of United States relations with the Freely Associated States, carry out 
related matters, and provide appropriate support to the Interagency 
Group, bearing in mind the continued special relationship between the 
United States and the Freely Associated States.
    (2) The Secretaries of Defense and Interior may, to the extent 
permitted by law, delegate any or all of their respective authorities 
and responsibilities as described in this Order to the Secretary of 
State or his or her designee. The Secretary of State or his or her 
designee shall serve as Executive Secretary of the Interagency Group.
    (3) Personnel additional to that provided by the Secretary of State 
may be detailed to the Department of State by the Executive departments 
and agencies that are members of the Interagency Group, and by other 
agencies as appropriate. Executive departments and agencies shall, to 
the extent permitted by law, provide such information, advice, and 
administrative services and facilities to the Secretary of State as may 
be necessary to conduct United States relations with the Freely 
Associated States.
    Sec. 4. United States Representatives to the Freely Associated 
States. The United States Representative assigned to a Freely Associated 
State in accordance with Article V of Title One of the Compact shall 
represent the Government of the United States in an official capacity in 
that Freely Associated State, and shall supervise the actions of any 
Executive department or agency personnel assigned permanently or 
temporarily to that Freely Associated State.
    Sec. 5. Cooperation among Executive Departments and Agencies. All 
Executive departments and agencies shall cooperate in the effectuation 
of the provisions of this Order. The Interagency Group and the Secretary 
of State shall facilitate such cooperative measures. Nothing in this 
Order shall be construed to impair the authority and responsibility of 
the Secretary of Defense for security and defense matters in or relating 
to the Freely Associated States.
    Sec. 6. Delegation to the Secretary of the Interior. The following 
authorities are delegated to the Secretary of the Interior:
    (a) Reporting to the Congress on economic development plans prepared 
by the Government of the Federated States of Micronesia and the 
Government of the Marshall Islands, pursuant to sections 102(b) and 
103(b) of the Act [48 U.S.C. 1902(b), 1903(b)];
    (b) The determination required by section 103(e) of the Act 
concerning the qualifications of the investment management firm selected 
by the Government of the Marshall Islands;
    (c) Reporting to the Congress with respect to the impact of the 
Compact of Free Association on the United States territories and 
commonwealths and on the State of Hawaii, pursuant to section 104(e)(2) 
of the Act [48 U.S.C. 1904(e)(2)]; and
    (d) Causing an annual audit to be conducted of the annual financial 
statements of the Government of the Federated States of Micronesia and 
the Government of the Marshall Islands, pursuant to section 110(b) of 
the Act [48 U.S.C. 1910(b)].
    Sec. 7. Delegation to the Secretary of State. The following 
authorities are delegated to the Secretary of State:
    (a) Reporting to the Congress on crimes in the Federated States of 
Micronesia and the Marshall Islands which have an impact upon United 
States jurisdictions, pursuant to sections 102(a)(4) and 103(a)(4) of 
the Act [48 U.S.C. 1902(a)(4), 1903(a)(4)];
    (b) Submitting the certification and report to the Congress for 
purposes of section 5 of the Fishermen's Protective Act of 1967 [22 
U.S.C. 1975], pursuant to section 104(f)(3) of the Act [48 U.S.C. 
1904(f)(3)]; and
    (c) Reporting, with the concurrence of the Secretary of Defense, to 
the Congress on determinations made regarding security and defense, 
pursuant to section 105(q) of the Act [48 U.S.C. 1905(q)].
    Sec. 8. Supersession and Saving Provisions.
    (a) Subject to the provisions of Section 9 of this Order, prior 
Executive orders concerning the former Trust Territory of the Pacific 
Islands are hereby superseded and rendered inapplicable, except that the 
authority of the Secretary of the Interior as provided in applicable 
provisions of Executive Order No. 11021, as amended [formerly 48 U.S.C. 
1681 note], shall remain in effect, in a manner consistent with this 
Order and pursuant to section 105(c)(2) of the Act [48 U.S.C. 
1905(c)(2)], to terminate the trust territory government and discharge 
its responsibilities, at which time the entirety of Executive Order No. 
11021 shall be superseded.
    (b) Nothing in this Order shall be construed as modifying the rights 
or obligations of the United States under the provisions of the Compact 
or as affecting or modifying the responsibility of the Secretary of 
State and the Attorney General to interpret the rights and obligations 
of the United States arising out of or concerning the Compact.
    Sec. 9. Effective Date. This Order shall become effective with 
respect to a Freely Associated State simultaneously with the entry into 
force of the Compact for that State.

                  Section Referred to in Other Sections

    This section is referred to in sections 1902, 1903, 1972 of this 
title.
