Compact of Free Association

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The Compact of Free Association (COFA) defines the relationship that three sovereign states—the Federated States of Micronesia (FSM), the Republic of the Marshall Islands (RMI) and the Republic of Palau—have entered into as associated states with the United States.

Now sovereign nations, the three freely associated states were formerly part of the Trust Territory of the Pacific Islands, a United Nations trusteeship administered by the United States Navy from 1947 to 1951 and by the United States Department of the Interior from 1951 to 1986 (to 1994 for Palau).

Under the COFA relationship, the United States provides guaranteed financial assistance over a 15-year period administered through the Office of Insular Affairs in exchange for certain defense rights. The freely associated states actively participate in all Office of Insular Affairs technical assistance activities. The U.S. treats these nations uniquely by giving them access to many U.S. domestic programs, including disaster response and recovery and hazard mitigation programs under Federal Emergency Management Agency.

In 2003, the Compacts between the RMI and FSM were renewed for 20 years. These new Compacts provided US$3.5 billion in funding for both nations. US$30 million was also provided to American Samoa, Guam, Hawaii, and the Northern Mariana Islands in "Compact Impact" funding. This funding helps the governments of these localities cope with the expense of providing services to immigrants from the RMI, FSM, and Palau. The U.S. usage of Kwajalein Atoll for missile testing was renewed for the same period. [1] The new Compacts also changed certain immigration rules. RMI and FSM citizens traveling to the U.S. are now required to have passports. [2] Furthermore, the U.S. Postal Service was given the option to apply international postage rates for mail between the U.S. and RMI/FSM (phased in over five years). The USPS did begin implementing the change in January 2006, but decided to resume domestic services and rates in November 2007. [3]

The renewed Compact (commonly called "Compact II") for FSM took effect on May 1, 2004 and for RMI on June 30, 2004.