The Compact of Free Association is the agreement which established the relationship between the Federated States of Micronesia and the United States. Under the terms of the Compact, the U.S. provides the FSM with economic assistance, defense, and other services and benefits. In exchange, the FSM grants the U.S. certain operating rights in the FSM, denial of access to FSM territory by other nations, and other agreements.
Negotiations for the Compact of Free Association began in 1980. The FSM approved the Compact in a plebiscite held in 1983. The U.S. Congress adopted the Compact in 1986, and President Reagan signed it into law on November 13, 1986.
The Compact also mandated the renegotiation of certain terms of the agreement after a fixed period. This negotiation took place in 2003 and resulted in the Amendments Act of 2003. President Bush signed this into law on December 17, 2003. After the four FSM states ratified the amendments, the FSM Congress approved the amended Compact on May 26, 2004.
Please see www.uscompact.org for details on the Compact funds that are provided to the FSM.