
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 48USC1931]

 
              TITLE 48--TERRITORIES AND INSULAR POSSESSIONS
 
           CHAPTER 18--MICRONESIA, MARSHALL ISLANDS, AND PALAU
 
                          SUBCHAPTER II--PALAU
 
         Part A--Approval of Compact and Supplemental Provisions
 
Sec. 1931. Approval of Compact of Free Association


(a) Approval

    The Compact of Free Association set forth in title II of this joint 
resolution between the United States and the Government of Palau is 
hereby approved, and Congress hereby consents to the agreements as set 
forth on pages 154 through 405 of House Document 99-193 of April 9, 1986 
(hereafter in this joint resolution referred to as subsidiary or related 
agreements), as they relate to such Government. Subject to the 
provisions of this joint resolution, the President is authorized to 
agree, in accordance with section 411 of the Compact, to an effective 
date for and thereafter to implement such Compact, having taken into 
account any procedures with respect to the United Nations for 
termination of the Trusteeship Agreement.

(b) Reference to 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.

(c) Amendment, change, or termination of Compact and certain agreements

    (1) Mutual agreement by the Government of the United States as 
provided in the Compact which results in amendment, change, or 
termination of all or any part thereof shall be affected only by Act of 
Congress and no unilateral action by the Government of the United States 
provided for in the Compact, and having such result, may be effected 
other than by Act of Congress.
    (2) The provisions of paragraph (1) shall apply--
        (A) to all actions of the Government of the United States under 
    the Compact including, but not limited to, actions taken pursuant to 
    sections 431, 432, 441, or 442;
        (B) to any amendment, change, or termination in any agreement 
    that may be concluded at any time between the Government of the 
    United States and the Government of Palau regarding friendship, 
    cooperation and mutual security concluded pursuant to sections 321 
    and 323 of the Compact referred to in section 462(h);
        (C) to any amendment, change, or termination of the agreements 
    concluded pursuant to Compact sections 175 and 221(a)(4), 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 X of the agreement 
        referred to in section 462(f) of the Compact;
            (iv) the agreement referred to in section 462(g) of the 
        Compact;
            (v) Articles II, III, IV, V, VI, and VII of the agreement 
        referred to in section 462(h) of the Compact; and
            (vi) Articles VI, XV, and XVII of the agreement referred to 
        in section 462(i) of the Compact.

(d) Effective date

    (1) The authority of the President to agree to an effective date for 
the Compact of Free Association between the United States and Palau 
concurrently with termination of the Trusteeship shall be carried out in 
accordance with this section, and the Compact shall not take effect 
until after--
        (A) The President has certified to the Congress that the Compact 
    has been approved in accordance with Section 411(a) and (b) of the 
    Compact, and that there exists no legal impediment to the ability of 
    the United States to carry out fully its responsibilities and to 
    exercise its rights under Title Three of the Compact, as set forth 
    in this Act, and
        (B) enactment of a joint resolution which has been reported by 
    the Committee on Energy and Natural Resources of the Senate and the 
    Committees on Interior and Insular Affairs and Foreign Affairs and 
    other appropriate Committees of the House of Representatives 
    authorizing entry into force of the Compact, and
        (C) agreements have been concluded with Palau which satisfy the 
    requirements of section 1902 of this title. For the purpose of this 
    subsection the word ``Palau'' shall be substituted for ``Federated 
    States of Micronesia'' whenever it appears in section 1902 of this 
    title.

    (2) Any agreement concluded with Palau pursuant to subparagraph (C) 
of paragraph (1) and any agreement which would amend, change, or 
terminate any subsidiary agreement or related agreement, or portion 
thereof, as set forth in paragraph (4) of this subsection shall be 
submitted to the Congress. No such agreement shall take effect until 
after the expiration of 30 days after the date such agreement is so 
submitted (excluding days on which either House of Congress is not in 
session).
    (3) No agreement described in paragraph (2) shall take effect if a 
joint resolution of disapproval is enacted during the period specified 
in paragraph (2). For the purpose of expediting the consideration of 
such a joint resolution, a motion to proceed to the consideration of any 
such joint resolution after it has been reported by an 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 agreement of \1\ portions thereof referred to in 
paragraph (2) are as follows:
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``or''.
---------------------------------------------------------------------------
        (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, and X (except for 
    section 7 thereof) of the agreement referred to in section 462(f) of 
    the Compact.
        (C) Articles IV, V, X, XIV, XVI, and XVIII of the agreement 
    referred to in section 462(i) of the Compact.
        (D) Articles II, V, VI, VII, and VIII of the agreement referred 
    to in section 462(h) of the Compact.
        (E) The agreement referred to in section 462(j) of the Compact.

    (5) No agreement between the United States and the Government of 
Palau which would amend, change, or terminate any subsidiary or related 
agreement, or portion thereof, other than those set forth in subsection 
(d) \2\ of this section or paragraph (4) of this subsection, shall take 
effect until the President has transmitted such an 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 therefor.
---------------------------------------------------------------------------
    \2\ So in original. Probably should be subsection ``(c)''.
---------------------------------------------------------------------------

(Pub. L. 99-658, title I, Sec. 101, Nov. 14, 1986, 100 Stat. 3673.)

                       References in Text

    The Compact of Free Association and the Compact, referred to in 
text, is the Compact of Free Association between the United States and 
the Government of Palau, which is contained in section 201 of Pub. L. 
99-658, set out below.
    This joint resolution and this Act, referred to in text, is Pub. L. 
99-658, Nov. 14, 1986, 100 Stat. 3672, as amended, which is classified 
generally to this part. Title II of the joint resolution enacted section 
1934 of this title and provisions set out below. For complete 
classification of this Act to the Code, see Tables.
    For Oct. 1, 1994, as the date the Compact of Free Association with 
Palau takes effect, referred to in subsecs. (a) and (d), see Proc. No. 
6726, Sept. 27, 1994, 59 F.R. 49777, set out below.
    Section 601(b) of Public Law 94-329, referred to in subsec. (d)(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.

                         Change of Name

    Committee on Interior and Insular Affairs of House of 
Representatives changed to Committee on Natural Resources of House of 
Representatives by House Resolution No. 5, One Hundred Third Congress, 
Jan. 5, 1993. Committee on Natural Resources of House of Representatives 
treated as referring to Committee on Resources of House of 
Representatives by section 1(a) of Pub. L. 104-14, set out as a note 
preceding section 21 of Title 2, The Congress.


                Regulations Regarding Habitual Residence

    Commissioner of Immigration and Naturalization to issue regulations, 
not later than 6 months after Sept. 30, 1996, governing rights of 
``habitual residence'' in United States under terms of the Compact of 
Free Association between the Government of the United States and the 
Government of Palau, see section 643 of Pub. L. 104-208, set out as a 
note under section 1901 of this title.

          Termination of Trust Territory of the Pacific Islands

    For termination of Trust Territory of the Pacific Islands, see note 
set out preceding section 1681 of this title.


                             Recital Clauses

    Pub. L. 99-658 which enacted this part contained several ``Whereas'' 
clauses reading as follows:
    ``Whereas the United States is the administering authority of the 
Trust Territory of the Pacific Islands under the terms of the 
Trusteeship Agreement for the former Japanese Mandated Islands entered 
into by the United States with the Security Council of the United 
Nations on April 2, 1947, and approved by the United States on July 18, 
1947; and
    ``Whereas the United States, in accordance with the Trusteeship 
Agreement, the Charter of the United Nations and the objectives of the 
international trusteeship system, has promoted the development of the 
peoples of the Trust Territory toward self-government or independence as 
appropriate to the particular cicumstances [sic] of the Trust Territory 
and its peoples and the freely expressed wishes of the peoples 
concerned; and
    ``Whereas the United States, in response to the desires of the 
people of Palau expressed through their freely-elected representatives 
and by the official pronouncements and enactments of their lawfully 
constituted government, and in consideration of its own obligations 
under the Trusteeship Agreement to promote self-determination, entered 
into political status negotiations with representatives of the people of 
Palau; and
    ``Whereas these negotiations resulted in the `Compact of Free 
Association' [set out below] between the United States and Palau which, 
together with its related agreements, was signed by the United States 
and by Palau on January 10, 1986; and
    ``Whereas the Compact of Free Association received a favorable vote 
of a majority of the people of Palau voting in a United Nations-observed 
plebiscite conducted on February 21, 1986; and
    ``Whereas the Supreme Court of Palau has ruled that the 
constitutional process of Palau for approval of the Compact of Free 
Association in accordance with section 411 of the Compact has not yet 
been completed; and
    ``Whereas the President of Palau has requested the United States to 
complete the process of United States approval of the Compact of Free 
Association in accordance with section 411 of the Compact through 
enactment of an appropriate joint resolution''.


                       Compact of Free Association

    Section 201 of Pub. L. 99-658 provided that: ``Compact of Free 
Association is as follows:


                      ``COMPACT OF FREE ASSOCIATION

                               ``preamble

 ``the government of the united states of america and the government of 
                                  palau

    ``Affirming that their Governments and the relationship between 
their Governments are founded upon respect for human rights and 
fundamental freedoms for all, and
    ``Affirming the common interests of the United States of America and 
the people of Palau in creating close and mutually beneficial 
relationships through a free and voluntary association of their 
Governments; and
    ``Affirming the interest of the Government of the United States in 
promoting the economic advancement and self-sufficiency of the people of 
Palau; and
    ``Recognizing that their previous relationship has been based upon 
the International Trusteeship System of the United Nations 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 free-expressed [sic] wishes, 
adopted a Constitution appropriate to their particular circumstances; 
and
    ``Recognizing their common desire to terminate the Trusteeship and 
establish a new government-to-government relationship in accordance with 
a new political status based on the freely-expressed wishes of the 
people of Palau and appropriate to their particular circumstances; and
    ``Recognizing that the people of Palau have and retain their 
sovereignty and their sovereign right to self-determination and the 
inherent right to adopt and amend their own Constitution and form of 
government and that the approval of the entry of their Government into 
this Compact of Free Association by the people of Palau constitutes an 
exercise of their sovereign right to self-determination;
    ``NOW, THEREFORE, AGREE to enter into relationship of free 
association which provides a full measure of self-government for the 
people of Palau; and
    ``FURTHER AGREE that the relationships of free association derives 
from and is 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 
Government of the freely associated state of Palau in regard to this 
relationship of free association derives from and is as set forth in 
this Compact.

                           ``TITLE ONE

                     ``GOVERNMENT RELATIONS

                           ``Article I

                        ``Self-government

``Section 111
    ``The people of Palau, acting through their duly elected government 
established under their constitution, are self-governing.

                          ``Article II

                        ``Foreign Affairs

``Section 121
    ``(a) The Republic of Palau has the capacity to conduct foreign 
affairs in its own name and right, except as otherwise provided in this 
Compact and the Government of the United States recognizes that the 
Government of Palau, in the exercise of this capacity, may enter into, 
in its own name and right, treaties and other international agreements 
with governments and regional and international organizations.
    ``(b) In the conduct of its foreign affairs the Government of Palau 
confirms that it shall act in accordance with principles of 
international law and shall settle its international disputes by 
peaceful means.
``Section 122
    ``The Government of the United States shall support application by 
the Government of Palau for membership or other participation in 
regional or international organizations as may be mutually agreed. The 
Government of the United States agrees to accept citizens of Palau for 
training and instruction at the United States Foreign Service Institute, 
established under 22 U.S.C. 4021, or similar training under terms and 
conditions to be mutually agreed.
``Section 123
    ``In recognition of the authority and responsibility of the 
Government of the United States under Title Three, the Government of 
Palau shall consult with the Government of the United States. The 
Government of the United States, in the conduct of its foreign affairs, 
shall consult with the Government of Palau on matters which the 
Government of the United States regards as relating to or affecting the 
Government of Palau, and shall provide, on a regular basis, information 
on regional foreign policy matters.
``Section 124
    ``(a) The Government of Palau has authority to conduct its foreign 
affairs relating to law of the sea and marine resources matters, 
including the harvesting, conservation, exploration or exploitation of 
living and nonliving resources from the sea, seabed or subsoil to the 
full extent recognized under international law.
    ``(b) The Government of Palau has jurisdiction and sovereignty over 
its territory, including its land and internal waters, territorial seas, 
the airspace superjacent thereto only to the extent recognized under 
international law.
``Section 125
    ``Except as otherwise provided in this Compact or its related 
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.
``Section 126
    ``The Government of the United States shall accept responsibility 
for those actions taken by the Government of Palau in the area of 
foreign affairs, only as may from time to time be expressly and mutually 
agreed.
``Section 127
    ``The Government of the United States may assist or act on behalf of 
the Government of Palau in the area of foreign affairs as may be 
requested and mutually agreed from time to time. The Government of the 
United States shall not be responsible to third parties for the actions 
of the Government of Palau undertaken with the assistance or through the 
agency of the Government of the United States pursuant to this Section 
unless expressly agreed.
``Section 128
    ``At the request of the Government of Palau and subject to the 
consent of the receiving state, the Government of the United States 
shall extend consular assistance on the same basis as for citizens of 
the United States to citizens of Palau for travel outside of Palau, the 
Marshall Islands, the Federated States of Micronesia, the United States 
and its territories and possessions.

                          ``Article III

                        ``Communications

``Section 131
    ``(a) The Government of Palau has full authority and responsibility 
to regulate its domestic and foreign communications, and the Government 
of the United States shall provide communication assistance in 
accordance with the terms of a related agreement which shall come into 
effect simultaneously with this Compact, and such agreement shall remain 
in effect until such time as any election is made pursuant to Section 
131(b) and which shall provide for the following:
        ``(1) the Government of the United States remains the sole 
    administration entitled to make notification to the International 
    Frequency Registration Board of the International Telecommunications 
    Union of frequency assignments to radio communications stations in 
    Palau; and to submit to the International Frequency Registration 
    Board seasonal schedules for the broadcasting stations in Palau 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 Palau.
    ``(b) The Government of Palau 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 Government of Palau 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 Government of Palau shall permit the Government of the United 
States to operate telecommunications services in Palau to the extent 
necessary to fulfill the obligations of the Government of the United 
States under this Compact in accordance with the terms of related 
agreements which shall come into effect simultaneously with this 
Compact.

                          ``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 Trust Territory of the Pacific 
    Islands, as defined in Title 53 of the Trust Territory Code in force 
    on January 1, 1979, and has become a citizen of Palau;
        ``(2) a person who acquires the citizenship of Palau, at birth, 
    on or after the effective date of the Constitution of Palau; or
        ``(3) a naturalized citizen of Palau, who has been an actual 
    resident there for not less than five years after attaining such 
    naturalization and who holds a certificate of actual residence.
Such persons shall be considered to have the permission of the Attorney 
General of the United States to accept employment in the United States.
    ``(b) The right of such persons to establish habitual residence in a 
territory or possession of the United States may, however, be 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 Palau, 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 Palau 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 Palau, subject to the 
right of that Government to deny entry to or deport any such citizen or 
national as an undesirable alien. A citizen or national of the United 
States may establish habitual residence or domicile in Palau only in 
accordance with the laws of Palau. This subsection is without prejudice 
to the right of the Government of Palau to regulate occupations in Palau 
in a nondiscriminatory manner.
    ``(b) With respect to the subject matter of this Section, the 
Government of Palau shall accord to citizens and nationals of the United 
States treatment no less favorable than that accorded to citizens of 
other countries; any denial of entry to or deportation of a citizen or 
national of the United States as an undesirable alien must be pursuant 
to reasonable statutory grounds.
``Section 143
    ``(a) The privileges set forth in Section 141 shall not apply to any 
person who takes an affirmative step to preserve or acquire a 
citizenship or nationality other than that of Palau.
    ``(b) Every person having the privileges set forth in Sections 141 
and 142 who possesses a citizenship or nationality other than that of 
Palau or the United States ceases to have these privileges two years 
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 Palau, commences employment with 
that Government shall not be deprived of his United States nationality 
pursuant to Section 349(a)(2) and (a)(4) of the Immigration and 
Nationality Act, 8 U.S.C. 1481(a)(2) and (a)(4).
    ``(b) Upon such notification by the Government of Palau, the 
Government of the United States may consult with or provide information 
to the notifying Government concerning the prospective employee, subject 
to the provisions of the Privacy Act, 5 U.S.C. 552a.
    ``(c) The requirement of prior notification shall not apply to those 
citizens or nationals of the United States who are employed by the 
Government of Palau on the effective date of this Compact with respect 
to the positions held by them at that time.

                           ``Article V

                        ``Representation

``Section 151
    ``The Government of the United States and the Government of Palau 
may establish and maintain representative offices in the capitals of the 
other.
``Section 152
    ``(a) The premises of such representatives [sic] 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 intentional [sic] 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.

                          ``Article VI

                   ``Environmental Protection

``Section 161
    ``The Government of the United States and the Government of Palau 
declare that it is their policy to promote efforts to prevent or 
eliminate damage to the environment and biosphere and to enrich 
understanding of the natural resources of the Palau.
``Section 162
    ``(a) The Government of the United States and the Government of 
Palau agree that with respect to the activities of the Government of the 
United States in Palau, and with respect to substantively equivalent 
activities of the Government of Palau, each of the Governments shall be 
bound by such environmental protection standards as may be mutually 
agreed for the purpose of carrying out the policy set forth in this 
Compact.
``Section 163
    ``In order to carry out the policy set forth in this Article, the 
Government of the United States and the Government of Palau agree to the 
following undertakings.
    ``(a) The Government of the United States:
        ``(1) shall apply environmental standards substantively similar 
    to those in effect on the day preceding the effective date of this 
    Compact to any activity requiring the preparation of an 
    Environmental Impact Statement under the provisions of the National 
    Environmental Policy Act of 1969, 83 Stat. 852, 42 U.S.C. 4321 et 
    seq.
        ``(2) shall develop, prior to conducting any activity included 
    within the category described in this Section, appropriate 
    mechanisms, including regulations or other standards and procedures, 
    to regulate such activity in Palau in a manner appropriate to the 
    special governmental relationship set forth in this Compact. The 
    Government of the United States shall provide the Government of 
    Palau with the opportunity to comment formally during the 
    development of such mechanisms.
    ``(b) The Government of Palau shall develop standards and procedures 
to protect the environment of Palau. As a reciprocal obligation to the 
undertakings of the Government of the United States under this Article, 
the Government of Palau, taking into account the particular environment 
of Palau, shall develop standards for environmental protection 
substantively similar to those required of the Government of the United 
States by Section 163(a)(1) prior to conducting activities in Palau 
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 163(a), including any standard or procedure applicable 
thereunder, and Section 163(b) may be modified or superseded in whole or 
in part by agreement of the Government of the United States and the 
Government of Palau.
    ``(d) Disputes arising under this Article, except for Section 
163(e), shall be resolved exclusively in accordance with Article II of 
Title Four.
    ``(e) The President of the United States may exempt any of the 
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 this Article if the President determines 
it to be in the paramount interest of the Government of the United 
States to do so, consistent with Title Three of this Compact and the 
obligations of the Government of the United States under international 
law. Prior to any decision pursuant to this subsection, the views of the 
Government of Palau 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 Government of Palau.

                          ``Article VII

                   ``General Legal Provisions

``Section 171
    ``Except as provided in this Compact or its related agreements, the 
application of the laws of the United States to the Trust Territory of 
the Pacific Islands by virtue of the Trusteeship Agreement ceases with 
respect to Palau as of the effective date of this Compact.
``Section 172
    ``(a) Every citizen of Palau who is not a resident of the United 
States shall enjoy the rights and remedies under the laws of the United 
States enjoyed by any nonresident alien.
    ``(b) The Government and every citizen of Palau shall be considered 
a `person' within the meaning of the Freedom of Information Act, 5 
U.S.C. 552, and of the judicial review provisions of the Administrative 
Procedure Act, 5 U.S.C. 701-706.
``Section 173
    ``The Government of the United States and the Government of Palau, 
agree to adopt and enforce such measures, consistent with this Compact 
and its related agreements, as may be necessary to protect the 
personnel, property, installations, services, programs and official 
archives and documents maintained by the Government of the United States 
in Palau pursuant to this Compact and its related agreements and by that 
Government in the United States pursuant to this Compact and its related 
agreements.
``Section 174
    ``Except as otherwise provided in this Compact and its related 
agreements:
    ``(a) The Government of Palau 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 Palau.
    ``(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 Government of Palau, shall not be immune from the 
jurisdiction of the courts of the United States, and the Government of 
the United States shall not be immune from the jurisdiction of the 
courts of Palau in any case in which the action is based on a commercial 
activity of the defendant Government carried out where the action is 
brought, or in a case in which damages are sought for personal injury or 
death or damage to or loss of property occurring where the action is 
brought. This subsection shall apply only to actions based on commercial 
activities entered into or injuries or losses suffered on or after the 
effective date of this Compact.
``Section 175
    ``A separate agreement, which shall come into effect simultaneously 
with this Compact, shall be concluded between the Government of the 
United States and the Government of Palau regarding mutual assistance 
and cooperation in law enforcement matters including the pursuit, 
capture, imprisonment and extradition of fugitives from justice and the 
transfer of prisoners. The separate agreement shall have the force of 
law. In the United States, the laws of the United States governing 
international extradition, including 18 U.S.C. 3184, 3186 and 3188-3195, 
shall be applicable to the extradition of fugitives under the separate 
agreement, and the laws of the United States governing the transfer of 
prisoners, including 18 U.S.C. 4100-4115, shall be applicable to the 
transfer of prisoners under the separate agreement.
``Section 176
    ``The Government of Palau confirms that final judgments in civil 
cases rendered by any court of the Trust Territory of the Pacific 
Islands shall continue in full force and effect, subject to the 
constitutional power of the courts of Palau to grant relief from 
judgments in appropriate cases.
``Section 177
    ``(a) Federal agencies of the Government of the United States which 
provide services and related programs in Palau are authorized to settle 
and pay tort claims arising in Palau from the activities of such 
agencies or from the acts or omissions of the employees of such 
agencies. Except as provided in Section 177(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 177(a) which cannot be settled under 
Section 177(a) shall be disposed of exclusively in accordance with 
Article II of Title Four. Arbitration awards rendered pursuant to this 
subsection shall be paid out of funds under 31 U.S.C. 1304.
    ``(c) The Government of the United States and the Government of 
Palau shall provide for:
        ``(1) the administrative settlement of claims referred to in 
    Section 177(a), including designation of local agents in Palau, such 
    agents to be empowered to accept, investigate and settle such 
    claims, in a timely manner, as provided in such related agreements; 
    and
        ``(2) arbitration, referred to in Section 177(b), in a timely 
    manner, at a site convenient to the claimant, in the event a claim 
    is not otherwise settled pursuant to Section 177(a).
    ``(d) The provisions of Section 174(d) shall not apply to claims 
covered by this Section.

                           ``TITLE TWO

                      ``ECONOMIC RELATIONS

                           ``Article I

                       ``Grant Assistance

``Section 211
    ``In order to assist the Government of Palau in its efforts to 
advance the well-being of the people of Palau and in recognition of the 
special relationship that exists between the United States and Palau, 
the Government of the United States shall provide to the Government of 
Palau on a grant basis the following amounts:
    ``(a) $12 million annually for ten years commencing on the effective 
date of this Compact, and $11 million annually for five years commencing 
on the tenth anniversary of the effective date of this Compact, for 
current account operations and maintenance purposes, which amounts 
commencing on the fourth anniversary of the effective date of this 
Compact shall include a minimum annual distribution of $5 million from 
the fund specified in Section 211(f).
    ``(b) $2 million annually for fourteen years commencing on the first 
anniversary of the effective date of this Compact as a contribution to 
efforts aimed at achieving increased self-sufficiency in energy 
production, of which annual amounts not less than $500,000 shall be 
devoted to the energy needs of those parts of Palau not served by its 
central power-generating facility.
    ``(c) $150,000 annually for fifteen years commencing on the 
effective date of this Compact as a contribution to current account 
operations and maintenance of communications systems, and the sum of 
$1.5 million, to be made available concurrently with the grant 
assistance provided during the first year after the effective date of 
this Compact, for the purpose of acquiring such communications hardware 
as may be located within Palau or for such other current or capital 
account activity as the Government of Palau may select.
    ``(d) $631,000 annually on a current account basis for fifteen years 
commencing on the effective date of this Compact for the purposes set 
forth below:
        ``(1) for the surveillance and enforcement by Government of 
    Palau of its maritime zone;
        ``(2) for health and medical programs, including referrals to 
    hospital and treatment centers; and
        ``(3) for a scholarship fund to support the post-secondary 
    education of citizens of Palau attending United States accredited, 
    post-secondary institutions in Palau, the United States, its 
    territories and possessions, and states in free association with the 
    United States. The curricular criteria for the award of scholarships 
    shall be designed to advance the purposes of the plan referred to in 
    Section 231.
    ``(e) The sum of $666,800 as a contribution to the commencement of 
activities pursuant to Section 211(d)(1).
    ``(f) The sum of $66 million on the effective date of this Compact, 
and the sum of $4 million concurrently with the grant assistance to be 
made available during the third year after the effective date of this 
Compact, to create a fund to be invested by the Government of Palau in 
issues of bonds, notes or other redeemable instruments of the Government 
of the United States or other qualified instruments which may be 
identified by mutual agreement of the Government of the United States 
and the Government of Palau. Investment of the fund in qualified 
instruments of United States nationality, and the distribution of sums 
derived from such investment to the Government of Palau, shall not be 
subject to any form of taxation by the United States or its political 
subdivisions. The Government of the United States and the Government of 
Palau shall set forth in a separate agreement, which shall come into 
effect simultaneously with this Compact, provisions for the investment, 
management and review of the fund so as to allow for an agreed minimum 
annual distribution from its accrued principal and interest commencing 
upon the effective date of this Compact for fifty years. The objective 
of this sum is to produce an average annual distribution of $15 million 
commencing on the fifteenth anniversary of this Compact for thirty-five 
years. Any excess or variance from the agreed minimum annual 
distributions which may be produced from these sums shall accrue to or 
be absorbed by the Government of Palau unless otherwise mutually agreed 
in accordance with the provisions of the separate agreement referred to 
in this paragraph. The annual distributions produced from these sums are 
not subject to Sections 215 and 236.
``Section 212
    ``In order to assist the Government of Palau in its efforts to 
advance the economic development and self-sufficiency of the people of 
Palau and in recognition of the special relationship that exists between 
the United States and Palau, the Government of the United States shall 
provide:
    ``(a) To the people of Palau, a road system in accordance with 
mutually agreed specifications, the construction of which shall be 
completed prior to the sixth anniversary of the effective date of this 
Compact; and
    ``(b) To the Government of Palau, the sum of $36 million, during the 
first year after the effective date of this Compact, for capital account 
purposes.
``Section 213
    ``The Government of the United States shall provide on a grant basis 
to the Government of Palau the sum of $5.5 million in conjunction with 
Article II of Title Three. This sum shall be made available concurrently 
with the grant assistance provided pursuant to this Article during the 
first year after the effective date of this Compact. The Government of 
Palau, in its use of such funds, shall take into account the impact of 
the activities of the Government of the United States in Palau.
``Section 214
    ``All funds previously appropriated to the Trust Territory of the 
Pacific Islands for the Government of Palau which are unobligated by the 
Government of the Trust Territory as of the effective date of this 
Compact shall accrue to the Government of Palau for the purposes for 
which such funds were originally appropriated as determined by the 
Government of the United States.
``Section 215
    ``Except as otherwise provided, the amounts stated in Sections 
211(a), 211(b), 211(c) and 212(b) shall be adjusted for each fiscal year 
by the percent which equals two-thirds of the percentage change in the 
United States Gross National Product Implicit Price Deflator, or seven 
percent, whichever is less in any one year, using the beginning of 
Fiscal Year 1981 as the base.

                          ``Article II

                      ``Program Assistance

``Section 221
    ``(a) The Government of the United States shall make available to 
Palau, in accordance with and to the extent provided in the separate 
agreement referred to in Section 232, without compensation and at the 
levels equivalent to those available to the Trust Territory of the 
Pacific Islands during the year prior to the effective date of this 
Compact, the services and related programs:
        ``(1) of the United States Weather Service;
        ``(2) provided pursuant to the Postal Reorganization Act, 39 
    U.S.C. 101 et seq.;
        ``(3) of the United States Federal Aviation Administration; and
        ``(4) of the United States Civil Aeronautics Board or its 
    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 Palau [sic] particularly in the fields of education and 
health care, shall make available, as provided by the laws of the United 
States,
        ``(1) the annual amount of $2 million which shall be allocated 
    in accordance with the provisions of the separate agreement referred 
    to in Section 232; and
        ``(2) the sums of $4.3 million, $2.9 million and $1.5 million, 
    respectively, during the first, second and third years after the 
    effective date of this Compact, which sums shall be used by the 
    Government of Palau as current account funds to finance programs 
    similar to those programs of the United States that applied to Palau 
    prior to the effective date of this Compact and that provided 
    financial assistance for education to any institution, agency, 
    organization or permanent resident of Palau or to the College of 
    Micronesia.
    ``(c) The Government of the United States shall make available to 
Palau such alternate energy development projects, studies and 
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 related agreements referred to in Section 232, which 
shall also set forth the extent to which services and programs shall be 
provided to Palau.
``Section 222
    ``The Government of Palau 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 law and which shall grant such 
technical assistance in a manner which gives priority consideration to 
Palau over other recipients not a part of the United States, its 
territories or possessions and equivalent consideration to Palau with 
respect to other states in Free Association with the United States.
``Section 223
    ``The citizens of Palau who are receiving post-secondary education 
assistance from the Government of the United States on the day preceding 
the effective date of this Compact shall continue to be eligible, if 
otherwise qualified, to receive such assistance to complete their 
academic programs for a maximum of four years after the effective date 
of this Compact.
``Section 224
    ``The Government of the United States and the Government of Palau 
may agree from time to time to the extension to Palau of additional 
United States grant assistance and of United States services and 
programs as provided by the laws of the United States.

                          ``Article III

                   ``Administrative Provisions

``Section 231
    ``(a) The annual expenditure by the Government of Palau of the grant 
amounts specified in Article I of this Title shall be in accordance with 
an official national development plan promulgated by the Government of 
Palau and concurred in by the Government of the United States prior to 
the effective date of this Compact. This plan may be amended from time 
to time by the Government of Palau.
    ``(b) The Government of the United States and the Government of 
Palau recognize that the achievement of the goals of the plan referred 
to in this Section depends upon the availability of adequate internal 
revenue as well as economic assistance from sources outside of Palau, 
including the Government of the United States, and may, in addition, be 
affected by the impact of exceptional, economically adverse 
circumstances. The Government of Palau shall therefore report annually 
to the President of the United States and to the Congress of the United 
States on the implementation of this plan and on its use of the funds 
specified in this Article. This report shall outline the achievements of 
the plan to date and the need, if any, for an additional authorization 
and appropriation of economic assistance for that year to account for 
any exceptional, economically adverse circumstances. The availability of 
such additional economic assistance from the Government of the United 
States shall be subject to the authorization and appropriation of funds 
by the Government of the United States.
``Section 232
    ``The specific nature, extent and contractual arrangements of the 
services and programs provided for in Section 221 as well as the legal 
status of agencies of the Government of the United States, their 
civilian employees and contractors, and the dependents of such personnel 
while present in Palau, and other arrangements in connection with a 
service or program furnished by the Government of the United States, are 
set forth in related agreements which shall come into effect 
simultaneously with this Compact.
``Section 233
    ``The Government of the United States, in consultation with the 
Government of Palau, shall determine and implement procedures for the 
periodic audit of all grants and other assistance made under this Title. 
Such audits shall be conducted at no cost to the Government of Palau.
``Section 234
    ``Title to the property of the Government of the United States 
situated in the Trust Territory of the Pacific Islands and in Palau or 
acquired for or used by the Government of the Trust Territory of the 
Pacific Islands on or before the day preceding the effective date of 
this Compact shall, without reimbursement or transfer of funds, vest in 
the Government of Palau as set forth in a separate agreement which shall 
come into effect simultaneously with this Compact. The provisions of 
this Section shall not apply to the personal property of the Government 
of the United States for which the Government of the United States 
determines a continuing requirement.
``Section 235
    ``(a) Funds held in trust by the High Commissioner of the Trust 
Territory of the Pacific Islands, in his official capacity, as of the 
effective date of this Compact shall remain available as trust funds to 
their designated beneficiaries. The Government of the United States, in 
consultation with the Government of Palau, shall appoint a new trustee 
who shall exercise the functions formerly exercised by the High 
Commissioner of the Trust Territory of the Pacific Islands.
    ``(b) To provide for the continuity of administration, and to assure 
the Governments [sic] of Palau that the purposes of the laws of the 
United States are carried out and that the funds of any other trust fund 
in which the High Commissioner of the Trust Territory of the Pacific 
Islands has authority of a statutory or customary nature shall remain 
available as trust funds to their designated 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 Article I of this Title. The obligation of the 
Government of the United States under Article I of this Title shall be 
enforceable in the United States Claims Court [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
    ``Palau is not included in the customs territory of the United 
States.
``Section 242
    ``The President of the United States shall proclaim the following 
tariff treatment for articles imported from Palau which shall apply 
during the period of effectiveness of this Title:
    ``(a) Unless otherwise excluded, articles imported from Palau, 
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.
    ``(b) Only canned tuna provided for in item 112.30 of the Tariff 
Schedules of the United States that is imported from the Federated 
States of Micronesia, the Marshall Islands and Palau during any calendar 
year not to exceed 10 percent of the United States consumption of canned 
tuna during the immediately preceding calendar year, as reported by the 
National Marine Fisheries Service, shall be exempt from duty; but the 
quantity of tuna given duty free treatment under this paragraph for any 
calendar year shall be counted against the aggregate quantity of canned 
tuna that is dutiable under rate column numbered 1 of such item 112.30 
for that calendar year.
    ``(c) The duty-free treatment provided under paragraph (1) shall not 
apply to:
        ``(1) watches, clocks and timing apparatus provided for in sub-
    part E of part 2 of schedule 7 of the Tariff Schedules of the United 
    States;
        ``(2) buttons (whether finished or not finished) provided for in 
    item 745.32 of such Schedules;
        ``(3) textile and apparel articles which are subject to textile 
    agreements; and
        ``(4) footwear, handbags, luggage, flat goods, work gloves, and 
    leather wearing apparel which were not eligible articles for 
    purposes of title V of the Trade Act of 1974 (19 U.S.C. 2461 et 
    seq.) on April 1, 1984.
    ``(d) If the cost or value of materials produced in the customs 
territory of the United States is included with respect to an eligible 
article which is a product of Palau, an amount not to exceed 15 percent 
of the appraised value of the article at the time it is entered that is 
attributable to such United States cost or value may be applied for duty 
assessment purposes toward determining the percentage referred to in 
section 503(b)(2) of title V of the Trade Act of 1974.
``Section 243
    ``Articles imported from Palau which are not exempt from any duty 
under paragraphs (a), (b), (c) and (d) of Section 242 shall be subject 
to the rates of duty set forth in column numbered 1 of the Tariff 
Schedules of the United States and all products of the United States 
imported into Palau shall receive treatment no less favorable than that 
accorded like products of any foreign country with respect to customs 
duties or charges of a similar nature and with respect to laws and 
regulations relating to importation, exportation, taxation, sale, 
distribution, storage, or use.

                           ``Article V

                     ``Finance and Taxation

``Section 251
    ``The currency of the United States is the official circulating 
legal tender of Palau. Should the Government of Palau act to institute 
another currency, the terms of an appropriate currency transitional 
period shall be as agreed with the Government of the United States.
``Section 252
    ``The Government of Palau may, with respect to United States 
persons, tax income derived from sources within its respective 
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 Palau, domiciled therein and who is a nonresident and 
not a citizen of the United States, shall be exempt from estate, gift, 
and generation-skipping transfer taxes imposed by the Government of the 
United States.
``Section 254
    ``(a) In determining any income tax imposed by the Government of 
Palau, the Government of Palau shall have authority to impose tax upon 
income derived by a resident of Palau from sources without Palau in the 
same manner and to the same extent as the Government of Palau imposes 
tax upon income derived from within its jurisdiction. If the Government 
of Palau exercises such authority as provided in this subsection, any 
individual resident of Palau who is subject to tax by the Government of 
the United States on income which is also taxed by the Government of 
Palau shall be relieved of liability to the Government of the United 
States for the tax which, but for this subsection, would otherwise be 
imposed by the Government of the United States on such income. For 
purposes of this Section, the term `resident of Palau' shall be deemed 
to include any person who was physically present in Palau for a period 
of 183 or more days during any taxable year. The relief from liability 
referred to in this subsection means only:
        ``(1) relief in the form of the foreign tax credit (or deduction 
    in lieu thereof) available with respect to the income taxes of a 
    possession of the United States, and
        ``(2) relief in the form of the exclusion under section 911 of 
    the United States Internal Revenue Code of 1954.
    ``(b) If the Government of Palau subjects income to taxation 
substantially similar to that imposed by the Trust Territory Code in 
effect on January 1, 1980, such Government shall be deemed to have 
exercised the authority described in Section 254(a).
``Section 255
    ``(a) For purposes of section 936 of the Internal Revenue Code of 
1954 Palau shall be treated as if it was a possession of the United 
States.
    ``(b) Subsection (a) of this Section shall not apply to Palau for 
any period after December 31, 1986, during which there is not in effect 
between Palau and the United States an exchange of information agreement 
of the kind described in section 274(h)(6)(C) (other than clause (ii) 
thereof) of the Internal Revenue Code of 1954.
    ``(c) If the tax incentives extended to Palau under subsection (a) 
of this Section are, at any time during which the Compact is in effect, 
reduced, the United States Secretary of the Treasury shall negotiate an 
agreement with the Government of Palau under which, when such agreement 
is approved by law, Palau will be provided with benefits substantially 
equivalent to such reduction in benefits. If within the 1-year period 
after the date of the enactment of the Act making the reduction in 
benefits, an agreement negotiated under the preceding sentence is not 
approved by law, the matter shall be submitted to the Arbitration Board 
established pursuant to Section 424. For purposes of Article V of this 
Title, the Secretary of the Treasury or his delegate shall be the member 
of such Board 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.
    ``(d) For purposes of section 274(h)(3)(A) of the Internal Revenue 
Code of 1954, the term `North American area' shall include Palau.
``Section 256
    ``This Article shall apply to income earned, and transactions 
occurring, after September 30, 1985, in taxable years ending after such 
date.

                          ``TITLE THREE

                ``SECURITY AND DEFENSE RELATIONS

                           ``Article I

                 ``Authority and Responsibility

``Section 311
    ``The territorial jurisdiction of the Republic of Palau shall be 
completely foreclosed to the military forces and personnel or for the 
military purposes of any nation except the United States of America, and 
as provided for in Section 312.
``Section 312
    ``The Government of the United States has full authority and 
responsibility for security and defense matters in or relating to Palau. 
Subject to the terms of any agreements negotiated pursuant to Article II 
of this Title, the Government of the United States may conduct within 
the lands, water and airspace of Palau the activities and operations 
necessary for the exercise of its authority and responsibility under 
this Title. The Government of the United States may invite the armed 
forces of other nations to use military areas and facilities in Palau in 
conjunction with and under the control of United States Armed Forces.
``Section 313
    ``The Government of Palau shall refrain from actions which the 
Government of the United States determines, after consultation with that 
Government, to be incompatible with its authority and responsibility for 
security and defense matters in or relating to Palau.

                          ``Article II

              ``Defense Sites and Operating Rights

``Section 321
    ``The Government of the United States may establish and use defense 
sites in Palau, and may designate for this purpose land and water areas 
and improvements in accordance with the provisions of a separate 
agreement which shall come into force simultaneously with this Compact.
``Section 322
    ``(a) When the Government of the United States desires to establish 
or use such a defense site specifically identified in the separate 
agreement referred to in Section 321, it shall so inform the Government 
of Palau which shall make the designated site available to the 
Government of the United States for the duration and level of use 
specified.
    ``(b) With respect to any site not specifically identified in the 
separate agreement referred to in Section 321, the Government of the 
United States shall inform the Government of Palau, which shall make the 
designated site available to the Government of the United States for the 
duration and level of use specified, or shall make available one 
alternative site acceptable to the Government of the United States. If 
such alternative site is unacceptable to the Government of the United 
States, the site first designated shall be made available after such 
determination.
    ``(c) Compensation in full for designation, establishment or use of 
defense sites is provided in Title Two of this Compact.
``Section 323
    ``The military operating rights of the Government of the United 
States and the legal status and contractual arrangements of the United 
States Armed Forces, their members, and associated civilians, while 
present in Palau, are set forth in related agreements which shall come 
into effect simultaneously with this Compact.
``Section 324
    ``In the exercise in Palau of its authority and responsibility under 
this Title, the Government of the United States shall not use, test, 
store or dispose of nuclear, toxic chemical, gas or biological weapons 
intended for use in warfare and the Government of Palau assures the 
Government of the United States that in carrying out its security and 
defense responsibilities under this Title, the Government of the United 
States has the right to operate nuclear capable or nuclear propelled 
vessels and aircraft within the jurisdiction of Palau without either 
confirming or denying the presence or absence of such weapons within the 
jurisdiction of Palau.

                          ``Article III

    ``Defense Treaties and International Security Agreements

``Section 331
    ``Subject to the terms of this Compact and its related agreements, 
the Government of the United States, exclusively, shall assume and 
enjoy, as to Palau, all obligations, responsibilities, rights and 
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; and
    ``(b) Any defense treaty or other international security agreement 
to which the Government of the United States is or may become a party 
which it determines to be applicable in Palau. Such a determination by 
the Government of the United States shall be preceded by appropriate 
consultation with the Government of Palau.

                          ``Article IV

       ``Service in the Armed Forces of the United States

``Section 341
    ``Any citizen of Palau entitled to the privileges of Section 141 of 
this Compact shall be eligible to volunteer for service in the Armed 
Forces of the United States, but shall not be subject to involuntary 
induction into military service of the United States so long as such 
person does not establish habitual residence in the United States, its 
territories or possessions.
``Section 342
    ``The Government of the United States shall have enrolled, at any 
one time, at least one qualified student from Palau as may be nominated 
by the Government of Palau, in each of:
    ``(a) The United States Coast Guard Academy pursuant to 14 U.S.C. 
195; and
    ``(b) The United States Merchant Marine Academy pursuant to 46 
U.S.C. 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 
Palau shall establish a joint committee empowered to consider disputes 
which may arise under the implementation of this Title and its related 
agreements.
    ``(b) The membership of the joint committee shall comprise selected 
senior officials of each of the participating Governments. The senior 
United States military commander in the Pacific area shall be the senior 
United States member of the joint committee. For the meetings of the 
joint committee, each of the Governments may designate additional or 
alternate representatives as appropriate for the subject matter under 
consideration.
    ``(c) Unless otherwise mutually agreed, the joint committee shall 
meet semi-annually at a time and place to be designated, after 
appropriate consultation, by the Government of the United States. The 
joint committee also shall meet promptly upon request of either of its 
members. Upon notification by the Government of the United States, the 
joint committee shall meet promptly in combined session with other such 
joint committees so notified. The joint committee shall follow such 
procedures, including the establishment of functional subcommittees, as 
the members may from time to time agree.
    ``(d) Unresolved issues in the joint committee shall be referred to 
the Government of the United States and the Government of Palau for 
resolution, and the Government of Palau shall be afforded, on an 
expeditious basis, an opportunity to raise its concerns with the United 
States Secretary of Defense personally regarding any 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 this 
Compact, the Government of the United States shall accord due respect to 
the authority and responsibility of the Government of Palau under this 
Compact and to the responsibility of the Government of Palau to assure 
the well-being of Palau and its people. The Government of the United 
States and the Government of Palau agree that the authority and 
responsibility of the United States set forth in this Title are 
exercised for the mutual security and benefit of Palau and the United 
States, and that any attack on Palau would constitute a threat to the 
peace and security of the entire region and a danger to the United 
States. In the event of such an attack, or threat thereof, the 
Government of the United States would take action to meet the danger to 
the United States and Palau in accordance with its constitutional 
processes.
``Section 353
    ``(a) The Government of the United States shall not include the 
Government of Palau as a named party to a formal declaration of war, 
without the consent of the Government of Palau.
    ``(b) Absent such consent, this Compact is without prejudice, on the 
ground of belligerence or the existence of a state of war, to any claims 
for damages which are advanced by the citizens, nationals or Government 
of Palau which arise out of armed conflict subsequent to the effective 
date of this Compact and which are:
        ``(1) petitions to the Government of the United States for 
    redress; or
        ``(2) claims in any manner against the government, citizens, 
    nationals or entities of any third country.
    ``(c) Petitions under Section 353(b)(1) shall be treated as if they 
were made by citizens of the United States.

                          ``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 Palau, subsequent to 
completion of the following:
    ``(a) Approval by the Government of Palau in accordance with its 
constitutional processes;
    ``(b) Approval by the people of Palau in a referendum called on this 
Compact; and
    ``(c) Approval by the Government of the United States in accordance 
with its constitutional processes.

                          ``Article II

               ``Conference and Dispute Resolution

``Section 421
    ``The Government of the United States and the Government of Palau 
shall confer promptly at the request of the other 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 Palau, after conferring pursuant to Section 421, determines that 
there is a dispute and gives written notice thereof, the Governments 
shall make a good faith effort to resolve the dispute among themselves.
``Section 423
    ``If a dispute between the Government of the United States and the 
Government of Palau cannot be resolved within 90 days of written 
notification in the manner provided in Section 422, either party to the 
dispute may refer it to arbitration in accordance with Section 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 and 
each of the two parties to the dispute shall appoint one member to the 
arbitration board. If either party to the dispute does not fulfill the 
appointment requirements of this Section within 30 days of referral of 
the dispute to arbitration pursuant to Section 423, its member on the 
arbitration board shall be selected from its own standing list by the 
other party to the dispute. Each government 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 VI of Title One, Title Two, Title Four and 
their related agreements.
    ``(c) Each member of the arbitration board shall have one vote. Each 
decision of the arbitration board shall be reached by majority vote.
    ``(d) In determining any legal issue, the arbitration board may have 
reference to international law and, in such reference, shall apply as 
guidelines the provisions set forth in Article 38 of the Statute of the 
International Court of Justice.
    ``(e) The arbitration board shall adopt such rules for its 
proceedings as it may deem appropriate and necessary, but such rules 
shall not contravene the provisions of this Compact. Unless the parties 
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 
Government of Palau.

                          ``Article III

                     ``Amendment and Review

``Section 431
    ``The provisions of this Compact may be amended at any time by 
mutual agreement of the Government of the United States and the 
Government of Palau in accordance with their respective constitutional 
processes.
``Section 432
    ``Upon the fifteenth and thirtieth and fortieth anniversaries of the 
effective date of this Compact, the Government of the United States and 
the Government of Palau shall formally review the terms of this Compact 
and its related agreements and shall consider the overall nature and 
development of their relationship. In these formal reviews, the 
governments shall consider the operating requirements of the Government 
of Palau and its progress in meeting the development objectives set 
forth in the plan referred to in Section 231(a). The governments commit 
themselves to take specific measures in relation to the findings of 
conclusions resulting from the review. Any alteration to the terms of 
this Compact or its related agreements shall be made by mutual agreement 
and the terms of this Compact and its related agreements shall remain in 
force until otherwise amended or terminated pursuant to Title Four of 
this Compact.

                          ``Article IV

                          ``Termination

``Section 441
    ``This Compact may be terminated by mutual agreement and subject to 
Section 451.
``Section 442
    ``This Compact may be terminated by the Government of the United 
States subject to Section 452, such termination to be effective on the 
date specified in the notice of termination by the Government of the 
United States but not earlier than six months following delivery of such 
notice. The time specified in the notice of termination may be extended.
``Section 443
    ``This Compact shall be terminated, pursuant to its constitutional 
processes, by the Government of Palau subject to Section 452 if the 
people of Palau vote in a plebiscite to terminate. The Government of 
Palau shall notify the Government of the United States of its intention 
to call such a plebiscite which shall take place not earlier than three 
months after delivery of such notice. The plebiscite shall be 
administered by such government in accordance with its 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
    ``Should termination occur pursuant to Section 442 or 443, the 
following provisions of this Compact shall remain in full force and 
effect until the fiftieth anniversary of the effective date of this 
Compact and thereafter as mutually agreed:
    ``(a) Article I and Section 233 of Title Two;
    ``(b) Title Three; and
    ``(c) Articles II, III, V and VI of Title Four.
``Section 453
    ``Notwithstanding any other provision of this Compact:
    ``(a) The provisions of Section 311, even if Title Three should 
terminate, are binding and shall remain in effect for a period of 50 
years and thereafter until terminated or otherwise amended by mutual 
consent;
    ``(b) The related agreements referred to in Article II of Title 
Three shall remain in effect in accordance with their terms; and
    ``(c) The Government of the United States reaffirms its continuing 
interest in promoting the long-term economic advancement and self-
sufficiency of the people of Palau.
``Section 454
    ``Any provision of this Compact which remains in effect by operation 
of Section 452 shall be construed and implemented in the same manner as 
prior to any termination of this Compact pursuant to Section 442 or 443.

                          ``Article VI

                      ``Definition of Terms

``Section 461
    ``For the purpose of this Compact the following terms shall have the 
following meanings:
    ``(a) `Trust Territory of the Pacific Islands' means the area 
established in the Trusteeship Agreement consisting of the 
administrative districts of Kosrae, Yap, Palau, Ponape, the Marshall 
Islands and Truk as described in Title One, Trust Territory Code, 
Section 1, in force on January 1, 1979. This term does not include the 
area of the Northern Mariana Islands.
    ``(b) `Trusteeship Agreement' means the agreement setting forth the 
terms of trusteeship for the Trust Territory of the Pacific Islands, 
approved by the Security Council of the United Nations April 2, 1947, 
and by the United States July 18, 1947, entered into force July 18, 
1947, 61 Stat. 3301, T.I.A.S. 1665, 8 U.N.T.S. 189.
    ``(c) `Palau' is used in a geographic sense and includes the land 
and water areas to the outer limits of the territorial sea and the air 
space above such areas as now or hereafter recognized by the Government 
of the United States consistent with the Compact and its related 
agreements.
    ``(d) `Government of Palau' means the Government established and 
organized by the Constitution of Palau including all the political 
subdivisions and entities comprising that Government.
    ``(e) `Habitual Residence' means a place of general abode or a 
principal, actual dwelling place of a continuing or lasting nature; 
provided, however, that this term shall not apply to the residence of 
any person who entered the United States for the purpose of full time 
studies as long as such person maintains that status, or who has been 
physically present in the United States or Palau for less than one year, 
or who is a dependent of a resident representative, as described in 
Section 152.
    ``(f) For the purposes of Article IV of Title One of this Compact:
        ``(1) `Actual Residence' means physical presence in Palau during 
    eighty-five percent of the period of residency required by Section 
    141(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).
    ``(g) `Defense Sites' means those land and water areas and 
improvements thereon in Palau reserved or acquired by the Government of 
Palau for use by the Government of the United States, as set forth in 
the related agreements referred to in Section 321.
    ``(h) `Capital Account' means, for each year of the Compact, those 
portions of the total grant assistance provided in Article I of Title 
Two, which are to be obligated for:
        ``(1) the construction or major repair of capital 
    infrastructure; or
        ``(2) public and private sector projects identified in the 
    official overall economic development plan.
    ``(i) `Current Account' means, for each year of the Compact, those 
portions of the total grant assistance provided in Article I of Title 
Two, which are to be obligated for recurring operational activities 
including infrastructure maintenance as identified in the annual budget 
justifications submitted yearly to the Government of the United States.
    ``(j) `Official National Development Plan' means the documented 
program of annual development which identifies the specific policy and 
project activities necessary to achieve a specified set of economic 
goals and objectives during the period of free association, consistent 
with the economic assistance authority in Title Two. Such a 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 Palau. Project 
identification should include initial cost estimates, with project 
purposes related to specific development goals and objectives.
    ``(k) `Tariff Schedules of the United States' means the Tariff 
Schedules of the United States as amended from time to time and as 
promulgated pursuant to United States law and includes the Tariff 
Schedules of the United States Annotated (TSUSA), as amended.
    ``(l) `Vienna Convention on Diplomatic Relations' means the Vienna 
Convention on Diplomatic Relations, done April 18, 1961, 23 U.S.T. 3227, 
T.I.A.S. 7502, 500 U.N.T.S. 95.
``Section 462
    ``The Government of the United States and the Government of Palau 
shall conclude related agreements which shall come into effect and shall 
survive in accordance with their terms, and which shall be construed and 
implemented in a manner consistent with this Compact, as follows:
    ``(a) Agreement Regarding the Provision of Telecommunication 
Services by the Government of the United States to Palau 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 Palau, 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 Regarding United States Economic Assistance to the 
Government of Palau Concluded Pursuant to Section 211(f) of the Compact 
of Free Association;
    ``(e) Agreement Regarding Construction Projects in Palau Concluded 
Pursuant to Section 212(a) of the Compact of Free Association;
    ``(f) Agreement Regarding Federal Programs and Services, and 
Concluded Pursuant to Article II of Title Two and Section 232 of the 
Compact of Free Association;
    ``(g) Agreement Regarding Property Turnover, Concluded Pursuant to 
Section 234 of the Compact of Free Association;
    ``(h) Agreement Regarding the Military Use and Operating Rights of 
the Government of the United States in Palau Concluded Pursuant to 
Sections 321 and 322 of the Compact of Free Association; and
    ``(i) Status of Forces Agreement Concluded Pursuant to Section 323 
of the Compact of Free Association.
    ``(j) Agreement regarding the Jurisdication [sic] and Sovereignty of 
the Republic of Palau over its Territory and the Living and Non-living 
Resources of the Sea.

                          ``Article VII

                     ``Concluding Provisions

``Section 471
    ``(a) The Government of the United States and the Government of 
Palau agree that they have full authority under their respective 
constitutions to enter into this Compact and its related agreements and 
to fulfill all of their respective responsibilities in accordance with 
the terms of this Compact and its related agreements. The Governments 
pledge that they are so committed.
    ``(b) The Government of the United States and the Government of 
Palau shall take all necessary steps, of a general or particular 
character, to ensure, not later than the effective date of this Compact, 
that their laws, regulations and administrative procedures are such as 
to effect the commitments referred to in Section 471(a).
    ``(c) Without prejudice to the effects of this Compact under 
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 and the Government of Palau. Each 
government shall possess an original English language version.
    ``IN WITNESS THEREOF, the undersigned, duly authorized, have signed 
this Compact of Free Association which shall come into effect in 
accordance with its terms between the Government of the United States 
and the Government of Palau.


             ``done at ____________________, this ______ day

            ``of ____, one thousand nine hundred eighty-five

                          ``for the government

                                  ``of

                     ``the united states of america

                   ``________________________


             ``done at ____________________, this ______ day

            ``of ____, one thousand nine hundred eighty-five

                          ``for the government

                                  ``of

                         ``the republic of palau

                  ``________________________''.

   Proc. No. 6726. Placing Into Full Force and Effect Compact of Free 
                   Association With Republic of Palau

    Proc. No. 6726, Sept. 27, 1994, 59 F.R. 49777, provided:
    Since July 18, 1947, the United States has administered the United 
Nations Trust Territory of the Pacific Islands (``Trust Territory''), 
which has included the Northern Mariana Islands, the Federated States of 
Micronesia, the Marshall Islands, and Palau.
    On November 3, 1986, a Covenant between the United States and the 
Northern Mariana Islands [48 U.S.C. 1801 note] came into force. This 
Covenant established the Commonwealth of the Northern Mariana Islands as 
a self-governing Commonwealth in political union with and under the 
sovereignty of the United States.
    On October 21, 1986, in the case of the Republic of the Marshall 
Islands, and on November 3, 1986, in the case of the Federated States of 
Micronesia, Compacts of Free Association with the United States [48 
U.S.C. 1901 note] became effective. Under the Compacts, the Federated 
States of Micronesia and the Republic of the Marshall Islands became 
self-governing sovereign states, in free association with the United 
States. Following the changes in political status of the Northern 
Mariana Islands, the Marshall Islands, and the Federated States of 
Micronesia, the Trusteeship Agreement ceased to be applicable to those 
entities and only Palau remained as the Trust Territory of the Pacific 
Islands.
    On January 10, 1986, the Government of the United States and the 
Government of Palau concluded a Compact of Free Association [set out 
above] similar to those that the United States entered into with the 
Republic of the Marshall Islands and with the Federated States of 
Micronesia. As in those instances, it was specified that the Compact 
with Palau would come into effect upon (1) 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 Palau; (2) the approval of 
the Compact by the two Governments, in accordance with their 
constitutional processes; and (3) the approval of the Compact by 
plebiscite in Palau.
    In Palau the Compact has been approved by the Government in 
accordance with its constitutional processes and by a United Nations-
observed plebiscite on November 9, 1993, a sovereign act of self-
determination. In the United States the Compact was approved by Public 
Law 99-658 of November 14, 1986 [48 U.S.C. 1931 et seq.], and Public Law 
101-219 of December 12, 1989 [48 U.S.C. 1951 et seq.].
    On May 25, 1994, the Trusteeship Council of the United Nations 
concluded that the Government of the United States had satisfactorily 
discharged its obligations as the Administering Authority under the 
terms of the Trusteeship Agreement and that the people of Palau had 
freely exercised their right to self-determination and considered that 
it was appropriate for the Trusteeship Agreement to be terminated. The 
Council asked the United States to consult with the Government of Palau 
and to agree on a date, on or about October 1, 1994, for entry into 
force of their new status agreement.
    On July 15, 1994, the Government of the United States and the 
Government of the Republic of Palau agreed, pursuant to section 411 of 
the Compact of Free Association, that as between the United States and 
the Republic of Palau, the effective date of the Compact shall be 
October 1, 1994.
    As of this day, September 27, 1994, the United States has fulfilled 
its obligations under the Trusteeship Agreement with respect to the 
Republic of Palau. On October 1, 1994, the Compact will enter into force 
between the United States and the Republic of Palau, and Palau will 
thereafter be self-governing and no longer subject to the Trusteeship. 
In taking these actions, the United States is implementing the freely 
expressed wishes of the people of Palau.
    NOW, THEREFORE, I, WILLIAM J. CLINTON, President of the United 
States of America, by the authority vested in me by the Constitution and 
laws of the United States, including sections 101 and 102 of the Joint 
Resolution to approve the ``Compact of Free Association'' between the 
United States and the Government of Palau, and for other purposes, 
approved on November 14, 1986 (Public Law 99-658) [48 U.S.C. 1931, 
1932], and section 101 of the Joint Resolution to authorize entry into 
force of the Compact of Free Association between the United States and 
the Government of Palau, and for other purposes, approved on December 
12, 1989 (Public Law 101-219) [48 U.S.C. 1951], and pursuant to section 
1002 of the Covenant to Establish a Commonwealth of the Northern Mariana 
Islands in Political Union with the United States of America [48 U.S.C. 
1801 note], and consistent with sections 101 and 102 of the Joint 
Resolution to approve the ``Compact of Free Association'' and for other 
purposes, approved on January 14, 1986 (Public Law 99-239) [48 U.S.C. 
1901, 1902], do hereby find, declare, and proclaim as follows:
    Section 1. I determine that the Trusteeship Agreement for the 
Pacific Islands will be no longer in effect with respect to the Republic 
of Palau as of October 1, 1994, at one minute past one o'clock p.m. 
local time in Palau. This constitutes the determination referred to in 
section 1002 of the Covenant with the Northern Mariana Islands (Public 
Law 94-241).
    Sec. 2. The Compact of Free Association with the Republic of Palau 
will be in full force and effect as of October 1, 1994, at one minute 
past one o'clock p.m. local time in Palau.
    Sec. 3. I am gratified that the people of the Republic of Palau, 
after 47 years of Trusteeship, have freely chosen to establish a 
relationship of Free Association with the United States.
    IN WITNESS WHEREOF, I have hereunto set my hand this twenty-seventh 
day of September, in the year of our Lord nineteen hundred and ninety-
four, and of the Independence of the United States of America the two 
hundred and nineteenth.
                                                     William J. Clinton.

                  Section Referred to in Other Sections

    This section is referred to in sections 1951, 1955, 1972 of this 
title.
