Message to the Congress
Transmitting Proposed Legislation for the Implementation of the Compact of Free
Association With Palau
November 30, 1987
the Congress of the United States:
transmit herewith for the consideration of the Congress a proposed Joint
Resolution that, in accordance with Section 101(d)(B) of Public Law 99 - 658,
would enable the Government of the United States and the Government of Palau to
implement the ``Compact of Free Association'' on a date mutually agreed to by
accordance with Section 101(d)(A) of Public Law 99 -
658, I hereby certify to the Congress that the Compact of Free Association
between the United States and Palau has been approved in accordance with
Section 411 (a) and (b) thereof, 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.
foregoing certification is based upon notification by the Government of Palau
that its internal constitutional approval process has been completed. Specifically,
on August 29, 1987, President Lazarus E. Salii certified in writing to the Department of State that
73 percent of the people of Palau voting in a plebiscite
observed by the United Nations on August
approved the Compact. The Palau National Congress gave its final approval to
the Compact on August 27, 1987. Under their
constitution, the people of Palau have freely chosen
self-government and free association with the United States.
proposed Joint Resolution would also amend Section 104(e) of Public Law 99 -
658 in two ways. First, additional language would be added to the first
sentence of this subsection, stating that money payable by the United States to Palau shall be paid to Palau in accordance with
procedures provided by the Compact and its related agreements. For example, Palau may wish to issue a
bond and grant its creditor a security interest in some of the anticipated
Compact funds from the United States, a procedure possible
under the Fiscal Procedures Agreement with Palau. The additional
language would clarify that payment into such an encumbered bank account would
be consistent with U.S. responsibilities to Palau. This would place Palau on an equal footing
with the other freely associated states.
the proposed Joint Resolution would repeal the last sentence of Section 104(e),
which purports to strip United States courts of jurisdiction
over commercial litigation now pending in the Federal courts between Palau and certain of its
creditors. This attempt to grant Palau sovereign immunity for
a single case relating to a power plant project is inconsistent with United States law and policy as
embodied in the Foreign Sovereign Immunities Act of 1976. Repeal of this
provision would protect the reputation of the United States as an international
financial center and allow Palau and its creditors to
pursue the rights and remedies available to them through the judicial process.
Such repeal would also permit the routine application of the Foreign Sovereign
Immunities Act. This would not in any way prejudge the matter, but merely
enable the case to be heard in the courts of the United States.
of the enclosed Joint Resolution would enable the United States to bring the Compact
into effect and end application of the 1947 Trusteeship Agreement with the
United Nations Security Council, under which the United States has administered Palau. The end of the
trusteeship would mean the beginning of a new era of political, economic,
strategic, and cultural partnership between the United States and Palau.
I urge the Congress to pass the attached proposed Joint Resolution authorizing
entry into force of the ``Compact of Free Association.''
November 30, 1987.