Government of the Federated States of Micronesia

FSM ratifies amended Compact

Palikir, POHNPEI (FSM Information Services): May 26, 2004 - The Federated States of Micronesia completed today, its national process for ratification of the amended Compact of Free Association with the United States of America.

At 11:39am, the 13th FSM Congress unanimously adopted Congressional Resolution 13-27 completing FSM's ratification process initiated by US's ratification of the amended Compact on December 17, 2003.

The internal ratification process defined in the FSM Constitution requires ratification by the FSM Congress and by at-least three of the four states. The State of Kosrae launched the process on January 22 by being the first to ratify the amended Compact. The States of Yap, Chuuk and Pohnpei followed and today the Third Regular Session of the 13th FSM Congress completed the process.

President Joseph J. Urusemal had addressed the FSM Congress prior to its ratification. The President thanked FSM's negotiating team, JCN, for its dedication and hard work. He commended Speaker Peter M. Christian for his perseverance championing the cause of the nation.

The President went on to thank the leaderships of the federation for their support of the negotiations and the ratification process.

Today's ratification finally concludes the nearly five years of intensive negotiations and technical meetings between the FSM and the U.S.

The original Compact of Free Association is a non-expiring agreement that defines the foundation of relations between the U.S. and FSM. Entered into force in 1986, it provided, along with other services, a 15-year economic package that may be renegotiated upon expiration.

On May 14 2003, the two nations signed in Palikir, a 20-year amended Compact economic provisions in Title II-Economic Relations along with assistances provided in Title III-Defense Issues. The amended package also contained several auxiliary agreements that supplement the terms of the amended Compact.

The amended provisions of the signed Compact contain the following for the FSM; for the first three years, the funding would be apportioned as follows: $16 million - will be towards the trust fund contributions and $76 million - toward economic assistance grants. The grants are to be allocated annually among six sectors: education, health, capacity-building, private sector development, environment and infrastructure.

Beginning the fourth year, an annual decrement of $800,000 from the sectoral-grants would be re-allocated to the trust fund contributions until 2023.

Congress's action today, completes FSM's ratification process, which, in turn launches the implementation process of the amended Compact. The date of the implementation will be set and agreed to by both the FSM and the U.S.