Interior Secretary Zinke Applauds Completion of Palau Compact Funding Agreement

Demonstrates United States’ Continued Focus on the Indo-Pacific Region

Last edited 10/27/2022
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Tanya Harris Joshua, 202 208 6008

WASHINGTON – U.S. Department of the Interior Secretary Ryan Zinke today authorized the immediate transfer of $87.4 million in payment to the Republic of Palau as called for in the Compact Review Agreement (CRA). Funds released included $65.3 million for the Palau Compact Trust Fund and $22.1 million to be used for economic assistance. The remainder of $34.0 million will be used through 2024 for infrastructure projects and maintenance.

U.S. Ambassador Amy Hyatt and Republic of Palau’s Minister of Finance Elbuchel Sadang, signed the agreement on September 19, 2018, in Palau, bringing it into force, and concluding the first 15-year review and amendment process as provided for under the Compact of Free Association (Compact), U.S. Public Law 99-658.

“I am very pleased that our Governments completed the exchange of diplomatic notes allowing the agreement to be signed and implemented,” said Secretary Zinke. “This is an historic day that fulfills the United States’ ongoing and continuing commitment to Palau, a key partner in the Administration’s Indo-Pacific strategy. I salute the significant progress Palau has made in developing its economy and will continue to look for ways to support your efforts to bring prosperity to the people of Palau,” concluded Zinke.

In December 2017, the U.S. Congress included authorization for the Palau Compact Agreement in the FY 2018 National Defense Authorization Act and President Donald J. Trump signed it into law officially enacting the strategic agreement first signed between the United States and Palau governments in 2010. On March 26, 2018, President Trump signed the 2018 Omnibus Funding Agreement which included $123 million in funding through 2024 for the 2010 Palau Compact Review Agreement as agreed to between the United States and the Republic of Palau.

“After many years of waiting, the U.S. and Palau can finally celebrate the completion of the first review and amendment process as called for under the Compact of Free Association,” said Doug Domenech, Assistant Secretary, Insular and International Affairs. “We acknowledge the hard work and efforts by officials of the Departments of Defense, State, and the Interior, including staff of pertinent congressional committees in working through this process. The U.S. looks forward to many more years of collaboration with Palau and is proud of the relationship that we share.”

Since the implementation of the Compact with Palau in 1994, the United States has provided over $700 million in direct assistance and investment to Palau. The U.S. investment in Palau under the Compact, and numerous other federal programs, has provided funds for essential government operations, law enforcement, infrastructure development, weather pattern monitoring, immunizations and health screenings, scholarships for higher education, and postal services. One notable U.S. contribution to spur economic development of Palau has been the circumferential road on Babeldaob Island, often referred to as the Compact Road.

The funds are provided to assist the Government of Palau in its efforts to advance the well-being of its people and in recognition of the special relationship that exists between the United States and Palau. This mutually beneficially relationship has helped Palau establish a stable government, where democratic principles, rule of law, and cultural preservation thrive. It has also been an important part of promoting and maintaining economic security for Palau and the region. Many Palauan citizens have taken opportunities under the Compact to study and work in the U.S. In addition, Palauans continue to serve honorably in the U.S. military, where some have made the ultimate sacrifice in defense of liberty and freedom.


U.S. Ambassador Amy Hyatt (front left) and Republic of Palau’s Minister of Finance Elbuchel Sadang sign the Palau Compact Funding Agreement.  Standing: Dwight Alexander, Compact Review Office; Joyce Isechal, Pol/Econ Officer, U.S. Embassy Palau; Faustina K. Rehuher-Marugg, Palau Minister of State; H.E. Tommy Remengesau, Jr., President of Palau; Secilil Eldebechel, Chief of Staff to the President.

U.S. Ambassador Amy Hyatt and Republic of Palau’s Minister of Finance Elbuchel Sadang shaking hands

The Secretary of the Interior is responsible for coordinating federal policy with respect to the territories of the U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands, and administering and overseeing U.S. federal assistance provided under the Compact of Free Association to the freely associated states of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. The Assistant Secretary, Insular and International Affairs, executes these responsibilities, on behalf of the Secretary, through the Office of Insular Affairs whose mission is to foster economic opportunities, promote government efficiency, and improve the quality of life for the people of the insular areas.


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