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1 [1] (December 3, 2025)

handle is hein.crs/govesxr0001 and id is 1 raw text is: The Compacts of Free Association Overyew The Compacts of Free Association (also referred to as COFA) govern the relationships between the United States and the Republic of the Marshall Islands (RMI), Federated States of Micronesia (FSM), and Republic of Palau, collectively known as the Freely Associated States (FAS). Located roughly 2,500 miles southwest of Hawaii, the FAS play a role in supporting the U.S. security presence in the Pacific Islands region at a time of increasing strategic competition between the United States and its allies, on the one hand, and the People's Republic of China (PRC, or China), on the other (for further information, see CRS Report R46573, The Freely Associated States and Issues for Congress). During the Trump Administration, the U.S. Department of the Interior (DOI) stated that the Compacts advance[] economic growth, promote[] self-sufficiency in the freely associated states, and reinforce[] alliances that support a free and open Indo-Pacific. Prior to the Compacts, RMI, FSM, and Palau were districts of the former U.S.-administered United Nations Trust Territory of the Pacific Islands, established after World War II. In pursuit of sovereign independence, the Marshall Islands, Micronesia, and Palau rejected the option of U.S. territorial or commonwealth status and instead the governments of the Marshall Islands and Micronesia signed Compacts of Free Association with the United States in 1982. The Compacts were approved by plebiscites in both Pacific Islands countries and by the U.S. Congress in 1985 (P.L. 99-239), becoming effective in 1986 (with economic assistance beginning in FY1987). The U.S.-Palau Compact of Free Association was approved by Congress in 1986 and 1989 (P.L. 99-658 and P.L. 101-219, respectively) and ratified in Palau in 1993 (entering into force in 1994, with economic assistance beginning in FY1995). The Compacts The Compacts and their related agreements are a collection of international pacts between the United States and the FAS that initially provided for economic assistance for 15 years. The first term of economic assistance under the RMI and FSM Compacts formally expired in FY2001. In 2003, the United States signed agreements with both RMI and FSM to renew Compact assistance, and Congress passed legislation (P.L. 108-188) amending the Compacts and extending economic assistance for 20 years (FY2004- FY2023). New features of the assistance included trust funds, joint oversight committees, and sector grants targeting education, health, the environment, public sector capacity building, private sector development, and infrastructure. In 2010, the United States and Palau concluded the U.S.-Palau Compact Review Agreement (CRA) to extend economic assistance and trust fund contributions through FY2024. Although the U.S. Updated December 3, 2025 government continued to make annual assistance available to Palau after 2009, Congress did not authorize full funding pursuant to the CRA until FY2018 (P.L. 115-91 and P.L. 115-141). In March 2024, a new CRA came into force providing Palau $889 million in grant assistance and trust fund contributions for another 20 years. Additionally, under the Compacts, FAS citizens have the right to reside and work in the United States and its territories as lawful nonimmigrants or habitual residents. More than 94,000 FAS citizens live in the United States, including children under age 18 who were born in the United States and hold dual citizenship. The FAS do not have their own militaries, and FAS citizens are eligible to join the U.S. military; over 1,000 FAS citizens serve in the U.S. Armed Forces. 2024 Compacts RenewaI Economic assistance pursuant to Title II of the Compacts of Free Association expired at the end of FY2023 for RMI and FSM and expired at the end of FY2024 for Palau. Compact provisions related to defense, security, migration, and other areas continued unchanged. DOI has funded and administered this assistance, also referred to as grant assistance, through mandatory or permanent appropriations since the Compacts' inception. Figure I. The Freely Associated States Source: CRS. Information from Esri and U.S. Department of State. In 2023, after over two years of negotiations, the United States signed agreements with the FAS on extending economic assistance for 20 years. Although Compact economic assistance for Palau did not expire until the end of FY2024, the United States and Palau (along with RMI and FSM) agreed to start the third term of assistance at the beginning of FY2024. Pursuant to the 2023 agreements, Compact assistance includes greater support for the environment, climate change adaptation, health care, education, and infrastructure.