[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                      THE BIDEN ADMINISTRATION'S 
                       PROPOSED COMPACT OF FREE
                      ASSOCIATION AMENDMENTS ACT
                                OF 2023
=======================================================================

                           OVERSIGHT HEARING

                               BEFORE THE

                        INDO-PACIFIC TASK FORCE

                                 OF THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                         Tuesday, July 18, 2023

                               __________

                           Serial No. 118-48

                               __________

       Printed for the use of the Committee on Natural Resources
       
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        Available via the World Wide Web: http://www.govinfo.gov
                                   or
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                               __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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-----------------------------------------------------------------------------------              
 
                    COMMITTEE ON NATURAL RESOURCES

                     BRUCE WESTERMAN, AR, Chairman
                    DOUG LAMBORN, CO, Vice Chairman
                  RAUL M. GRIJALVA, AZ, Ranking Member

Doug Lamborn, CO		Grace F. Napolitano, CA		
Robert J. Wittman, VA		Gregorio Kilili Camacho Sablan, 
Tom McClintock, CA		  CNMI
Paul Gosar, AZ			Jared Huffman, CA
Garret Graves, LA		Ruben Gallego, AZ
Aumua Amata C. Radewagen, AS	Joe Neguse, CO
Doug LaMalfa, CA		Mike Levin, CA
Daniel Webster, FL		Katie Porter, CA
Jenniffer Gonzalez-Colon, PR    Teresa Leger Fernandez, NM
Russ Fulcher, ID		Melanie A. Stansbury, NM
Pete Stauber, MN		Mary Sattler Peltola, AK
John R. Curtis, UT		Alexandria Ocasio-Cortez, NY
Tom Tiffany, WI			Kevin Mullin, CA
Jerry Carl, AL			Val T. Hoyle, OR
Matt Rosendale, MT		Sydney Kamlager-Dove, CA
Lauren Boebert, CO		Seth Magaziner, RI
Cliff Bentz, OR			Nydia M. Velazquez, NY
Jen Kiggans, VA			Ed Case, HI
Jim Moylan, GU			Debbie Dingell, MI
Wesley P. Hunt, TX		Susie Lee, NV
Mike Collins, GA
Anna Paulina Luna, FL
John Duarte, CA
Harriet M. Hageman, WY                                

                    Vivian Moeglein, Staff Director
                      Tom Connally, Chief Counsel
                 Lora Snyder, Democratic Staff Director
                   http://naturalresources.house.gov
                                 
                                 ------                                

                        INDO-PACIFIC TASK FORCE

                  AUMUA AMATA C. RADEWAGEN, AS, Chair

             GREGORIO KILILI CAMACHO SABLAN, CNMI, Co-Chair

Bruce Westerman, AR                  Raul M. Grijalva, AZ
Doug Lamborn, CO                     Ruben Gallego, AZ
Robert J. Wittman, VA                Katie Porter, CA
Tom Tiffany, WI                      Teresa Leger Fernandez, NM
Jim Moylan, GU                       Melanie A. Stansbury, NM
Harriet M. Hageman, WY               Ed Case, HI

                              -----------                                
                                
                                CONTENTS

                                ----------                              
                                                                   Page

Hearing held on Tuesday, July 18, 2023...........................     1

Statement of Members:

    Radewagen, Hon. Aumua Amata Coleman, a Delegate in Congress 
      from the Territory of American Samoa.......................     1
.................................................................
    Sablan, Hon. Gregorio Kilili Camacho, a Delegate in Congress 
      from the Territory of the Northern Mariana Islands.........     3
    Westerman, Hon. Bruce, a Representative in Congress from the 
      State of Arkansas..........................................     5
    Grijalva, Hon. Raul M., a Representative in Congress from the 
      State of Arizona...........................................     6

Statement of Witnesses:

    Panel I:

    Yun, Hon. Joseph Y., Special Presidential Envoy for Compact 
      Negotiations, United States of America, Washington, DC.....     8
        Prepared statement of....................................     9
        Questions submitted for the record.......................    10
    Nakoa, Keone, Deputy Assistant Secretary, Insular and 
      International Affairs, U.S. Department of the Interior, 
      Washington, DC.............................................    12
        Prepared statement of....................................    14
        Questions submitted for the record.......................    16
    Mohandas, Siddharth, Deputy Assistant Secretary of Defense 
      for East Asia, U.S. Department of Defense, Washington, DC..    17
        Prepared statement of....................................    18
        Questions submitted for the record.......................    21

    Panel II:

    Whipps, His Excellency Surangel S., Jr., President, Republic 
      of Palau...................................................    38
        Prepared statement of....................................    40
        Questions submitted for the record.......................    42
    Kedi, Hon. Kenneth, Speaker, Parliament of the Republic of 
      the Marshall Islands.......................................    44
        Prepared statement of....................................    46
        Questions submitted for the record.......................    53
    Falcam, Leo A., Jr., Chief Compact Negotiator, Federated 
      States of Micronesia.......................................    53
        Prepared statement of....................................    55
        Questions submitted for the record.......................    57

Additional Materials Submitted for the Record:
    Submission for the Record by Representative Grijalva

        CANN--COFA Alliance National Network, Statement for the 
          Record.................................................    64

    Submission for the Record by His Excellency Surangel S. 
      Whipps, Jr.

        Palau Congress 2023 CRA Resolution.......................    66

    Submissions for the Record by Kenneth Kedi

        Renewed Compact of Free Association between the USA and 
          Republic of the Marshall Islands dated July 1, 2022....    69
        Pacific Islands Forum, Henry Puna, Secretary General, 
          Letter to President Biden dated July 10, 2023..........    76

    Submission for the Record by Leo A. Falcam, Jr.

        Simina, Wesley W., President, Federated States of 
          Micronesia, Letter to Task Force dated July 14, 2023...    77
                                     


 
    OVERSIGHT HEARING ON THE BIDEN ADMINISTRATION'S PROPOSED COMPACT
                     OF FREE ASSOCIATION AMENDMENTS
                              ACT OF 2023

                              ----------                              


                         Tuesday, July 18, 2023

                     U.S. House of Representatives

                        Indo-Pacific Task Force

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Committee met, pursuant to notice, at 10:18 a.m., in 
Room 1324, Longworth House Office Building, Hon. Chair Aumua 
Amata Coleman Radewagen [Chair of the Indo-Pacific Task Force] 
presiding.
    Present: Representatives Radewagen, Westerman, Lamborn, 
Wittman, Tiffany, Moylan, Hageman; Sablan, Grijalva, Porter, 
Leger Fernandez, Stansbury, and Case.

    Mrs. Radewagen. The Indo-Pacific Task Force will come to 
order.
    Without objection, the Chair is authorized to declare a 
recess of the Task Force at any time. The task force is meeting 
today to hear testimony on the Biden administration's proposed 
Compact of Free Association Amendments Act of 2023.
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chair and Co-Chair. I therefore ask 
unanimous consent that all other Members' opening statements be 
made part of the hearing record if they are submitted in 
accordance with Committee Rule 3(o).
    Without objection, so ordered.
    I will now recognize myself for an opening statement.

STATEMENT OF THE HON. AUMUA AMATA COLEMAN RADEWAGEN, A DELEGATE 
        IN CONGRESS FROM THE TERRITORY OF AMERICAN SAMOA

    Mrs. Radewagen. Before we start, I want to take this 
opportunity to offer a special welcome to our visitors, who 
have come a long way from Micronesia to be with us today.
    I see many friends in the audience today, including Asterio 
Takesy, who invited me to be his house guest when he was in 
Apia heading up SPREP and the top negotiators were Palau and 
the FSM, whose fathers I knew quite well from my days in 
Micronesia.
    I have chaired other hearings, but this one is special 
because I am talking with family and old friends. Some of you 
may not know that my family spent 17 years in Micronesia, 
including 4 years in the Marshalls, as head of government, and 
4 years in the Northern Marianas as the same.
    I attended and graduated from the University of Guam, while 
my father served as Deputy High Commissioner of the Trust 
Territory of the Pacific Islands, which include the three 
Freely Associated States whose Compact extensions we will 
consider this morning.
    I have a sister born in the Marshalls and brothers who have 
married Micronesian women. The blood of these islands flows 
through the veins of my family. We arrived in the Marshalls 
just 3 years after the final nuclear test, when the experience 
of those tests was still fresh in the minds of the people.
    My father walked through the bomb craters on Bikini, and 
that possibly may have contributed to his passing many years 
later. So, I want to offer my personal gratitude to the people 
of the Marshalls for the sacrifices they made in the interest 
of furthering the quest for international peace and express my 
personal regret for the suffering of the people as an 
unintended consequence of the American testing program.
    [Speaking Native language] and good morning. We meet today 
at a time of great national promise and peril in the Pacific. 
Amid the growing threat from the People's Republic of China, or 
PRC, we must preserve 120 years of American leadership and 
national success in the Pacific.
    The COFA renewal must be understood in its historical 
context. In 1946, the United States placed the islands that 
comprise Palau, the FSM, and RMI today under the UN trusteeship 
system as part of the trust territory of the Pacific Islands, 
or TTPI.
    As the UN's administering authority, the United States held 
a heavy burden ensuring the TTPI played a role in preserving 
international peace. The United States was entrusted by the 
United Nations to promote self-government, and to that end, the 
TTPI was governed under features of both the domestic U.S. 
territorial model and the international self-determination 
model that led to termination of the trusteeship in favor of 
combined international sovereignty and domestic status features 
established under the Compacts of Free Association for Palau, 
RMI, and the FSM.
    Allow me to reiterate the gravity of this. The Compact with 
our Free Association partners is a national security and 
foreign policy success story. Through the Compacts, the United 
States and FAS have developed special relations that can be 
visibly seen in our mutual values and interests.
    As a result, the Chinese Communist Party dictatorship in 
Beijing has pursued a model in which they challenge U.S. 
leadership by attempting to leverage the FAS through systematic 
political warfare, economic disruption, corruption, and 
coercion.
    We have a duty to protect the interests of Americans and 
island peoples alike. We do that by reauthorizing these Compact 
agreements. If enacted by Congress, the Administration's 
proposed legislation will extend economic assistance provisions 
of the COFA agreements with the Freely Associated States.
    I would like to take a moment to give credit to Special 
Envoy Yun for his successful negotiations with the FSM and 
Palau. I hope that he and our friends in the RMI can come to an 
agreement as soon as possible.
    However, I am disappointed by the due diligence conducted 
by the Biden administration. The proposal includes $7.1 billion 
funds marked as mandatory spending, but no suggested offsets 
have been provided to Congress.
    The Administration has yet to finalize the Federal programs 
and services agreements with the FSM, and Palau, and eventually 
RMI, which could drive the total cost more than $7.1 billion.
    It authorizes appropriations for COFA funding to the State 
Department to be transferred to and managed by the Department 
of the Interior. This is a significant change from the previous 
COFA and was not a request by the FAS governments.
    Under the current COFA, Federal funding is sent directly to 
DOI. I am concerned that this could cause bureaucratic delays 
and mismanagement. The authorization language for certain U.S. 
services to the FAS has been changed from previous agreements 
from shall to may.
    While seemingly minor, this change provides significant 
discretion to government officials charged with carrying out 
the U.S. commitments. This could create a situation where U.S. 
agencies would elect to not provide those services, furthering 
opportunities for PRC influence in the FAS.
    There is much work that remains to be done before this 
proposal is ready to be introduced, but I stand ready to work 
with our partners. Thank you to our witnesses for being here 
today, recognizing several that have traveled at a great 
distance to be with us today. I yield back.
    I now recognize the Co-Chair for any statement.

    STATEMENT OF THE HON. GREGORIO KILILI CAMACHO SABLAN, A 
DELEGATE IN CONGRESS FROM THE TERRITORY OF THE NORTHERN MARIANA 
                            ISLANDS

    Mr. Sablan. Thank you, Madam Chair. Good morning, everyone. 
I was heartened by the Chair's comments until we came to the 
very end when I started like, whoa. OK, but congratulations.
    Welcome to all the witnesses on the first panel, of course. 
And of course, all my brothers on the second panel. 
Congratulations to all of you, especially to the Freely 
Associated States here today.
    You have been negotiating for over 2 years now to extend 
these Compacts of Free Association between your nations and the 
United States.
    You have all signed a Memorandum of Understanding on 
Compact funding totaling $6.5 billion over 20 years with site 
agreement to continue U.S. Postal Service. Need to define 
service there.
    In May, the teams from the Federal States of Micronesia and 
the Republic of Palau completed their specific Compact 
agreements. And in June, the Biden administration transmitted 
to Congress those agreements as well as placeholder texts for 
an agreement with the Republic of the Marshall Islands, as the 
Chairwoman alluded to, until negotiations with that nation are 
concluded.
    So, again, congratulations on this progress to the 
representatives of the Freely Associated States and to their 
counterparts, Ambassador Yun, Mr. Nakoa, and Dr. Mohandas. Did 
I get that right? You know, of course, Interior, Defense and 
State here.
    The special relationship between the United States and the 
Freely Associated States began after World War II with 
formation of the United Nations Trust territory, the Pacific 
Islands.
    My district, the Northern Mariana Islands was the Marianas 
District and was part of the trust territory and chose 
political union with the United States in 1975.
    Palau, Micronesia, and the Marshall Islands chose to be 
sovereign nations. And speaking as a Micronesian myself, I can 
say we all feel this special relationship with the United 
States.
    As Micronesians, we have always felt this relationship with 
the United States. It has endured close to 80 years, and we are 
looking forward to another 20 years of partnership and 
hopefully maybe even more after that. After we celebrate 100 
years to get there.
    But the ties are reflected in the high rate, for example, 
of enlistment in the U.S. Armed Forces, gainful employment in 
the United States by migrants from the Freely Associated States 
and by the reliability of the Freely Associated States vote in 
conjunction with U.S. interests in the United Nations and other 
international organizations.
    In addition, of course, through the Compact agreements with 
the Freely Associated States, the U.S. military gains access to 
a vast and strategically important swath of the Pacific between 
Hawaii and the Philippines.
    It would be a mistake, however, to take these special 
relationships for granted. We have seen what happened in 
Congress. I was here when the renewal of the Compact Agreement 
for the Republic of Palau took 8 years.
    Palau's economy suffered and there were reports that the 
People's Republic of China used the opportunity to pressure 
Palau to switch diplomatic recognition from Taiwan to Beijing.
    Thankfully, that effort proved unsuccessful. Thankfully, 
that relationship between Palau and the United States endured 
that pressure. That is what we are here for. To allow another 
20 years of this special relationship in the best interest of 
the United States of America.
    Ambassador Yun, I congratulated you. Wow, you got a very 
good deal. That is what you do, sir. Congratulations. But going 
back to knowing how intent China is to dominate the Pacific 
puts even more pressure on us, on Congress, to move swiftly to 
renew the Compact extensions before they expire this year.
    This also increases the urgency to complete a renewal. 
Ambassador Yun, you see the need to continue on the work that 
is remaining.
    Let me address Speaker Nitijela Kedi, Foreign Minister 
Adding, and Chief Negotiator Mueller. I want you to know that I 
hear and sympathize with your concerns regarding your 
negotiation.
    The dynamics in Congress, however, make it unlikely we will 
have any second opportunity to renew your Compact if we delay.
    That being said, you have my commitment as well as I 
believe others in the House and the Senate. I know the 
Chairwoman feels this way, to address your concerns, 
particularly with respect to the legacy of the U.S. nuclear 
testing program in your islands, your homes.
    And with that acknowledgement of the urgency of maintaining 
the 80-year relationship with the United States, let's reach 
100 years and from there move on to another 100 years.
    In the best interest of the United States and the Federated 
States of Micronesia, the Republic of Palau, and the Republic 
of the Marshall Islands, I welcome all our witnesses today.
    I am pleased to work with my colleagues to swiftly renew 
the Compacts of Free Association. I am over time. Thank you, 
and I yield.
    The Chair will now recognize Chairman Westerman for his 
opening statement.

  STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ARKANSAS

    The Chairman. Thank you, Chair Radewagen and Mr. Sablan, 
for your leadership on the Task Force. I also want to again 
thank Ranking Member Grijalva for working together to make this 
a bipartisan task force because this is a very important issue 
to America and to the Freely Associated States and to, I would 
say, freedom around the world, in a sense.
    I appreciate the witnesses being here today and the work 
that you have done on the Compact Agreements. We are here to 
review the Biden administration's proposal for the Compact of 
Free Association Amendments Act of 2023.
    This is an Act that will ultimately come through this 
Committee for markup and passage. This proposal would amend and 
renew the expiring economic provisions of the current Compact 
Agreements between the United States with the Republic of 
Palau, the Federated States of Micronesia, and the Republic of 
Marshall Islands.
    The current Compact economic provisions are due to expire 
the end of Fiscal Year 2023 for FSM and the RMI, and at the end 
of Fiscal Year 2024 for Palau.
    These agreements provide the United States with access to 
extraordinary security rights over the three sovereign Pacific 
Island countries in return for U.S. economic assistance and 
defense guarantees.
    These security rights include the right to build U.S. bases 
and military installations in the FAS, and the right of 
strategic denial. These rights are increasingly important as 
Chinese aggression and efforts to undermine U.S. interests in 
the Indo-Pacific region increase.
    The United States must respond to the People's Republic of 
China's attempts to exert influence, and to stabilize the FAS 
through political warfare and gray zone activity. We must also 
keep in mind that the PRC is unlike any adversary that the 
United States and its allies, in the FAS and the Indo-Pacific, 
have faced before.
    The PRC is an active threat and challenge to our mutual 
values of democracy, freedom, and human rights. To be clear, 
these agreements are also important beyond the framework of the 
U.S./China competition.
    The Compacts represent the deep and special relationship 
between the United States and its FAS allies. The Committee has 
a responsibility to the American people to ensure these 
Compacts address challenges and serve U.S. interests in a 
fiscally responsible manner.
    With that in mind, we will review the legislative proposal 
set forth by the Administration and hope that this hearing will 
address the concerns that I and this task force have with it.
    First, this $7.1 billion proposal, as Chair Radewagen 
mentioned, was delivered to Congress as an incomplete proposal. 
While I commend Special Envoy Yun on successfully concluding 
negotiations with the FSM and Palau, I am concerned about the 
dire state of negotiations with the RMI.
    Furthermore, it seems that the negotiations on the Federal 
programs and services agreements with all three FAS countries 
are still ongoing. We must do better on due diligence.
    The Administration's proposal again has $7.1 billion of 
funds as mandatory spending, but no suggested offsets have been 
provided to Congress.
    The Pay-Go statute requires that increases in mandatory 
spending must be offset with increases in revenue or reductions 
in mandatory programs. There is also no estimate from the 
Administration of the cost of the Federal Programs and Services 
Agreement, but we know that it will also add more spending on 
top of the $7.1 billion.
    These concerns have to be addressed. It is the right of the 
American taxpayers to know the true cost behind this proposal. 
The Administration must work with Congress to ensure timely 
renewal of the Compacts.
    It is vitally important that agencies, with a stake in 
these negotiations, be involved in discussions with Congress 
about renewing these Compacts. Continued dynamic involvement 
from you all and your agencies is essential to U.S. efforts to 
renew the agreements.
    I want to thank our witnesses for being here, especially 
those from the Freely Associated States for traveling such 
great distances to be with us today. And President Whipps, it 
is great to have you here before the Committee. I yield back.

    Mrs. Radewagen. The Chair will now recognize Ranking Member 
Grijalva for his opening statement.

  STATEMENT OF THE HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Grijalva. Thank you very much, Madam Chair, and I am 
glad to be here today to receive testimony on the Biden 
administration's proposed Compact of Free Association 
Amendments Act of 2023.
    I want to welcome our witnesses, especially the 
representatives from the COFA nations, who have traveled a 
great, great distance to be here with us today.
    For nearly four decades, the United States has maintained 
its special relationship with the Freely Associated States, the 
Federated States of Micronesia, the Republic of the Marshall 
Islands, and the Republic of Palau.
    The agreements before us today are the result of 
negotiations between Presidential Envoy Joseph Yun and three 
Compact States resulting in memorandums of understandings on 
top line Compact funding priorities of $6.5 billion total over 
20 years.
    It is critical that we don't take for granted the goodwill 
that has been generated between us and our FSA partners and 
allies over 80 years of association by failing to pass these 
agreements before the end of the fiscal year.
    The 8 years that it took to pass the second Palau agreement 
caused significant damage to the economy of Palau and created 
an opening for the government of China to attempt to cause 
distrust and division in our relationship.
    We must keep these challenges in mind as we consider 
solutions that will be of mutual benefit to our national 
security as well as to the people and the economy of the Freely 
Associated States.
    I want to add that as we talk about the vital strategic 
importance, as we talk about the need to invest in the Freely 
Associated States as part of a Compact agreement, invest in 
their people and their economy and their development, as we 
talk about those, the issue of mandatory spending and offsets 
and where revenue can be generated becomes a question now.
    And it is a litmus test that I hope doesn't become a 
barrier to progress on this issue because these agreements are 
critical. These agreements carry with it not only the 
continuation of a relationship and an alliance, but they go 
deeper.
    They talk about what our responsibility is, our shared 
responsibility to the Freely Associated States. And it talks 
directly about what our national security and strategic plan 
for the future is going to be.
    If indeed the issue is to offset any intrusion and 
incursion by the Chinese Communist Party, then issues such as 
offsets, revenue generation, I don't say they become secondary, 
but this should not be an impediment to moving forward with an 
agreement, insofar as we really, truly have been talking about 
that urgency, we all believe it that we have to counteract 
that, then these agreements have to be dealt with and they have 
to be dealt with expeditiously. With that, I yield back. And 
thank you, Madam Chair.

    Mrs. Radewagen. I will now introduce our witnesses for our 
first panel.
    The Honorable Joseph Yun, Special Presidential Envoy for 
Compact Negotiations, United States of America, Washington, DC; 
Mr. Keone Nakoa, Deputy Assistant Secretary for Insular and 
International Affairs, Department of the Interior, Washington, 
DC; and Dr. Siddharth Mohandas, Deputy Assistant Secretary of 
Defense for East Asia, Department of Defense, Washington, DC.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statements to 5 minutes, but their 
entire statement will appear in the hearing record.
    To begin your testimony, please press the talk button on 
the microphone. We use timing lights. When you begin, the light 
will turn green. When you have 1 minute left, the light will 
turn yellow. At the end of 5 minutes, the light will turn red, 
and I will ask you to complete your statement.
    I will also allow all witnesses on the panel to testify 
before Member questioning.
    The Chair now recognizes Ambassador Yun for 5 minutes.

STATEMENT OF THE HON. JOSEPH Y. YUN, SPECIAL PRESIDENTIAL ENVOY 
FOR COMPACT NEGOTIATIONS, UNITED STATES OF AMERICA, WASHINGTON, 
                               DC

    Mr. Yun. Chair Radewagen, Co-Chair Sablan, Chairman 
Westerman, and Ranking Member Grijalva, thank you very much for 
this kind invitation and thank you for this opportunity to 
testify before you regarding Compacts of Free Association.
    Madam Chair, with your permission, I will make a few short 
remarks and submit a longer testimony for the record.
    Our history with the three Freely Associated States: Palau, 
Federated States of Micronesia, and the Republic of the 
Marshall Islands began nearly 80 years ago.
    After the Second World War, the United Nations assigned the 
United States as administering authority over the trust 
territories of the Pacific Islands, which of course included 
Micronesia, Marshall Islands, and Palau.
    The Compacts grew out of this relationship. Our Compacts 
with Micronesia and the Marshall Islands entered into force in 
1986 and with Palau in 1994. The Compacts reflect that these 
countries are sovereign nations in free association with the 
United States.
    Under the Compact, the FAS governments conduct their own 
foreign relations, and the United States has full authority and 
responsibility for defense and security matters.
    I would like to note that FSA citizens also serve in U.S. 
armed forces and volunteer at per capita rates higher than most 
U.S. states.
    The Compacts define our partnership with each Freely 
Associated State and have become the bedrock of U.S. policy and 
strategy in the Pacific. These three Compacts do not expire, 
though each can be terminated in accordance with applicable 
provisions in the Compacts.
    However, economic assistance provisions in the Compacts do 
expire and they are, of course, central to the mutually 
beneficial relationships of the Compacts. Unless these economic 
provisions are renewed, they will end after Fiscal Year 2023 
for the FSM and RMI, and Fiscal Year 2024 for Palau.
    Our strategic competitors are well aware of this, and at 
this time of genuine competition from the People's Republic of 
China we certainly should not take the historic friendship of 
our FAS friends for granted.
    Madam Chair, we have coordinated very closely across the 
interagency to develop robust proposals to continue assistance 
to all three countries.
    With me today are my two colleagues Interior Deputy 
Assistant Secretary Nakoa and Deputy Assistant Secretary of 
Defense, Siddharth Mohandas.
    They and their teams have been instrumental in the progress 
we have made. I am also delighted that you have invited 
President Whipps of Palau, Speaker Kedi of the Marshall 
Islands, and FSM Chief Negotiator Leo Falcam.
    We have worked very closely with them and their teams, and 
please also allow my own personal appreciation to my three 
counterparts Chief Falcam, of course, and Minister Udui, who is 
here, and Foreign Minister Kitlang Kabua in RMI.
    They have made huge contributions in getting our agreements 
where it is today. I am glad you will get their perspective 
too.
    Our proposed legislation requests $7.1 billion over the 
next 20 years to fund the two agreements, Palau, and FSM we 
have signed, but also includes the amount specified in the MOU 
with Marshall Islands.
    We have not, as you have noted, reached a final agreement 
with the RMI, and negotiations are ongoing. The $7.1 billion 
also includes $600 million for the U.S. Postal Service to 
continue to provide postal services.
    The requested legislation also provides authorities under 
U.S. domestic law for several U.S. agencies to offer services. 
For example, the Veterans Affairs Agency.
    We appreciate your continued support for our relations with 
the FAS, and we welcome the opportunity to work with Congress 
to secure long-term strategic impact in this vital region. 
Thank you.

    [The prepared statement of Mr. Yun follows:]
   Prepared Statement of Joseph Yun, Special Presidential Envoy for 
                          Compact Negotiations
    Chairwoman Radewagen, Co-Chair Sablan, distinguished members of the 
Indo-Pacific Task Force: thank you for this opportunity to testify 
before you today. I am grateful for the bipartisan approach of this 
committee regarding the Compacts of Free Association (COFA) with the 
freely associated states (FAS)--the Federated States of Micronesia 
(FSM), the Republic of Marshall Islands (RMI), and the Republic of 
Palau.
    Our history with the freely associated states began nearly 80 years 
ago. After World War II, the United Nations assigned the United States 
as administering authority over the Trust Territory of the Pacific 
Islands, which included FSM, RMI, and Palau. The Compacts grew out of 
this relationship with the Trust Territory, with our Compacts with FSM 
and the Marshall Islands entering into force in 1986 and with Palau in 
1994. The Compacts reflect that the countries are sovereign nations in 
free association with the United States. The FAS governments conduct 
their own foreign relations, and, under the Compacts, the United States 
has full authority and responsibility for defense and security matters 
in and relating to the FAS. FAS citizens also serve in the U.S. Armed 
Forces and volunteer at per capita rates higher than many U.S. states.
    Our respective Compacts underpin our partnership with each FAS 
country and are the bedrock of our strategy in the Pacific. These 
Compacts allow the United States to ensure long-term strategic and 
defense interests. The three Compacts do not expire, though each can be 
terminated in accordance with applicable provisions. However, our 
mutually beneficial relationships are also strongly tied to economic 
assistance provisions in each Compact and relevant subsidiary 
agreements, including certain federal programs and services that, 
absent successful negotiations and congressional approval, will end 
after Fiscal Year 2023 for the FSM and RMI, and Fiscal Year 2024 for 
Palau. Our strategic competitors are well aware that the scheduled end 
of U.S. economic assistance is fast approaching--now is not the time to 
leave the FAS open to predatory and coercive behavior by other nations. 
We cannot take the goodwill generated from our historic bonds of 
friendship for granted at a time of increasing competition from the 
People's Republic of China and other countries to exert greater 
influence in the FAS and Pacific region more broadly.
    We have coordinated closely across the interagency to develop 
robust proposals to continue assistance to all three countries. These 
agreements are complex and have required extensive consultations to 
reach the best agreement for all parties. Earlier this year, the U.S. 
Compact team signed MOUs with each of the Freely Associated States that 
reflected our shared understanding on levels and types of future U.S. 
assistance each country requested. On May 22, we concluded negotiations 
on a number of agreements. Minister Kaleb Udui of Palau and I signed 
the 2023 Palau Compact Review Agreement during the U.S. Pacific Island 
Islands Forum Leaders Dialogue in Port Moresby. On May 23, U.S. Charge 
d'Affaires Alissa Bibb and FSM negotiator Chief Leo Falcam signed a new 
Fiscal Procedures Agreement, a new Trust Fund Agreement, and an 
agreement outlining the economic assistance in front of President 
Simina in FSM. Negotiations continue with the RMI on agreements 
relating to future economic assistance and with the FSM and Palau on 
their respective Federal Programs and Services Agreements. On June 16, 
we transmitted the Administration's proposed COFA implementing 
legislation to both chambers of the U.S. Congress.
    As we continue to work diligently to finalize the remaining 
agreements, we are grateful for the opportunity to work with Congress 
on the necessary authorizations and appropriations to avoid any lapse 
in U.S. assistance to these important partners. To that end, our 
proposed implementing legislation includes $7.1 billion over 20 years 
to implement extended economic assistance under the new agreements. 
This total includes $6.5 billion over the next 20 years for direct 
economic assistance and $600 million for the unfunded costs of 
extending U.S. postal services to the FAS. The legislation also 
provides authorities under U.S. domestic law for several U.S. agencies 
to offer services in the FAS like veterans' services and national 
health service corps.
    This investment is key to maintaining the stability and prosperity 
of our closest Pacific Island neighbors and partners and demonstrating 
to the rest of the Indo-Pacific region that the United States' 
commitment is enduring.
    We appreciate your continued support for ongoing negotiations with 
the FAS and welcome the opportunity to work with Congress to secure 
long-term U.S. strategic impact in this vital region.

                                 ______
                                 

  Questions Submitted for the Record to the Hon. Joseph Yun, Special 
              Presidential Envoy for Compact Negotiations

The Honorable Joseph Yun did not submit responses to the Committee by 
the appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman
    Question 1. The Bikini Resettlement Trust Fund was subject to 
federal statute requiring Secretary of the Interior to approve 
specified disbursements.

    Why do you believe the Trust Fund committees can sustain more 
effective oversight and accountability with less specific statutory 
mandate and more decentralized fiscal autonomy?

    Question 2. Please provide more detailed explanation of how the 
COFA Trust Fund accountability mechanism will operate.

    2a) Can you summarize how 2023 Compact proposals for COFA Trust 
governance, management and utilization is different than the current 
COFA Trust Fund model? How do you believe it will be improved and 
better serve bilateral interests?

    2b) Do you believe an international organization constituted under 
an international agreement with mutually agreed membership and 
governance features would be a better structural model and enhance 
institutional capacity for oversight and accountability than the non-
profit organizational and governance model of the current COFA Trust 
Fund committees? If not, why not?

    2c) It's reported that currently members of COFA Trust Fund and 
Economic Assistance Sectoral Grant oversight bodies have been 
designated primarily through selections made by and among staff of 
Interior and State offices responsible for COFA implementation, 
including reportedly unauthorized self-appointment of same Interior 
official as Chairman of both the RMI/FSM joint economic and Trust Fund 
committees for a period of 14 years, is that true?

    Question 3. When asked about the cost of expanding federal programs 
and services for the FAS, you and Mr. Nakoa both stated that this 
proposal does not involve expansion of federal programs and services, 
but rather a continuation. However, the legislative proposal has 
provisions on making available to the FAS countries certain programs 
and services that have not previously existed for the FAS under the 
current Compact agreements. For example, Section 105(a)(2)(A)(v) of the 
legislative proposal would ``make available to students enrolled in 
eligible institutions of higher education in the Federated States of 
Micronesia, the Republic of the Marshall Islands, and the Republic of 
Palau, and to students who are citizens of the Federated States of 
Micronesia, the Republic of the Marshall Islands, and the Republic of 
Palau and enrolled in institutions in the United States and its 
territories, loans authorized under part D of title IV of the Higher 
Education Act of 1965.'' This explicitly makes available the William D. 
Ford Federal Direct Loan program to the FAS when they were not 
previously eligible under the current COFA with the RMI, the FSM, and 
Palau.

    If this is not expanding U.S. federal programs and services for the 
FAS then please provide us with a definition of expanding.

    Question 4. We have yet to receive a clear explanation on why this 
proposal has the authorizations and appropriations to the State 
Department and then transferred to the Department of the Interior 
(DOI). This is a change from the current and previous Compact 
agreements, which authorized and appropriated to the DOI. The only 
explanation we received was that this is part of a signaling effort to 
elevate the importance of the U.S. relationship with the FAS as part of 
U.S. national security interests. It does not make sense to us why it 
is necessary to create additional bureaucratic layers when the current 
process has not had issues. As we heard from the Assistant Secretary 
Carmen Cantor's response to Senator Joe Manchin's question during the 
July 13, 2023, Senate Energy and Natural Resources Committee hearing, 
this change was clearly not requested by the DOI. Furthermore, Palau 
President Surangel Whipps, Jr. raised the issue of the State 
Department's ``lack of understanding of the uniqueness'' of the U.S. 
relationship with the FAS during our July 18, 2023, hearing. Thus, the 
signal that the FAS would receive from this change is that the U.S. is 
seeking downgrade the importance of the U.S. relationship with the FAS 
from a special relationship to a bilateral one.

    Can you provide us with a clear explanation on why this proposal 
has authorizations and appropriations going to the State Department, 
beyond the imagined signals it would send?

              Questions Submitted by Representative Moylan

    Question 1. Ambassador Yun said it wouldn't be appropriate to raise 
the issue of diplomatic recognition 40 years after FSM switched. But 
this ignores the fact that 40 years ago, China was not the greatest 
threat to the U.S.

    1a) Given this, why would we not expect our close allies to show 
the same support for Taiwan, and lack thereof for China, and those 
countries that wish us and our allies harm?

    Question 2. Another major issue in this discussion is funding. At 
$7.1 billion over the next 20 years, funding COFA is no small feat, and 
neither is looking for funding sources. Additionally, since the 
administration has yet to provide Congress with an estimate of the 
costs of continuing and beginning FAS eligibility for U.S. federal 
programs and services, it is likely that COFA costs will far exceed 
$7.1 billion.

    2a) Why isn't the Biden administration taking a more active role to 
secure funding?

    2b) Additionally, with little Congressional oversight into how 
funds are expended, Freely Associated States are spending money as they 
see fit. With funding already being extremely difficult to secure, 
could you explain why the administration wants to weaken Congress's 
oversight on how these funds are spent?

    Question 3. The Biden administration has submitted a legislative 
proposal before fully concluding COFA negotiations. The current 
proposal is incomplete and not ready for introduction on the house 
floor. With the September 30 deadline fast approaching, several of the 
kinks have not been worked out and there is still much work that needs 
to be done.

    3a) Would a simplified one-year extension be feasible while we work 
out a long-term solution?

    Question 4. Committee staff have raised the issue with the COFA 
negotiation team about the potential cost of expanding federal programs 
and services for the FAS and have specifically requested your team to 
provide an estimate of the costs. Rather than finding out and sending 
our staff with those estimates, your team suggested that our staff 
reach out to each agency and calculate the costs themselves. While it 
may be the case that your respective agencies are not responsible for 
estimating those costs, it is the responsibility of the administration 
to do its due diligence and providing Congress with information it 
needs to carry out its oversight responsibilities.

    4a) Is there a cost estimate regarding the expansion of federal 
program and services for the FAS? If not, will you assign this task to 
a member of your team and have it sent to us by the end of the month?

    4b) These cost estimates are vital in understanding the true cost 
of these COFA agreements. These agreements can very well total to far 
beyond $7.1 billion when factoring in these additional costs. We 
understand that calculating a cost estimate is a difficult task, but it 
is our collective responsibility to make sure that these agreements are 
fiscally responsible and serve U.S. interests.

    Question 5. We are very concerned about the current situation with 
the RMI. Needless to say, failure to come to an agreement will have 
large implications for U.S.-RMI relations and U.S. interests in the 
region.

    5a) What can Congress do to help spur the negotiations?

    Question 6. The administration has characterized this proposal as 
part of its broader China strategy. However, this proposal seems to do 
nothing to counter growing PRC influence beyond just giving a large sum 
of money to the FAS with little oversight.

    6a) Are we missing something here?

                                 ______
                                 

    Mrs. Radewagen. The Chair now recognizes Mr. Nakoa for 5 
minutes.

 STATEMENT OF KEONE NAKOA, DEPUTY ASSISTANT SECRETARY, INSULAR 
  AND INTERNATIONAL AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR, 
                         WASHINGTON, DC

    Mr. Nakoa. [Speaking Native language] to Chair Radewagen, 
Co-Chair Sablan, and Aloha to Chair Westerman and Ranking 
Member Grijalva, and to the other distinguished members of the 
Indo-Pacific Task Force.
    The Department of the Interior welcomes the opportunity to 
join you today, alongside our colleagues from the White House 
and DOD, to recognize the importance of the Freely Associated 
States FSM, RMI, and Palau to U.S. national interests in the 
Indo-Pacific for more than 75 years.
    I refer the Task Force to my full written testimony, but 
would like to summarize some of the highlights for you this 
morning.
    Just over a month ago, the Administration submitted to 
Congress a legislative proposal, The Compacts of Free 
Association Amendments Act of 2023. This proposal contains 
funding and provisions to implement renewed COFA provisions 
over the next 20 years, including $3.3 billion for the FSM, 
$889 million for Palau, as well as $2.3 billion for agreements 
to be negotiated with the RMI, based on an MOU signed in 
January.
    This full legislative package would not only deepen our 
relationships with the FAS over the coming decades, but serve 
as a clear signal of the United States' commitment to achieving 
and maintaining a free and secure Indo-Pacific.
    Among the bedrock provisions of the original Compacts, FAS 
citizens are permitted to come and go between their islands and 
the United States.
    Under the Compacts, they have contributed greatly and have 
become woven into the fabric of our country. According to the 
U.S. Government Accountability Office in 2018, there were an 
estimated 94,000 FAS individuals living in the United States, 
in nearly every state and territory.
    To put it into perspective, 94,000 is roughly equivalent to 
about half the population of the three nations. Moreover, 
roughly half of that population are now U.S. citizens.
    These FAS citizens serve at among the highest per capita 
rates in the U.S. military. They live, work, and pay taxes 
throughout the United States. And for the past 35 years, the 
Compacts, as the Chair recognized, have been a foreign policy, 
national security, and people-to-people success story.
    The Administration's proposal further builds upon that 
success. Our proposal includes supplemental provisions that 
rectify two long-standing challenges for FAS citizens.
    First, our proposal adopts language from the Bipartisan 
Compact Impact Fairness Act, co-sponsored and introduced by 
several members of this task force.
    This Act restores eligibility for key Federal programs for 
FAS citizens living in the United States. The Act, or CIFA, is 
an important long-term solution which would allow the Federal 
Government to rightfully share in covering a significant 
portion of the financial burden currently placed on state and 
territorial governments.
    Further, the benefits and compensation from the Federal 
Government would follow these FAS communities in whichever 
state or territory they choose to live.
    Second, our proposal would provide U.S. military veterans 
in the FAS improved access to the VA benefits they earned and 
deserve for their service.
    Again, FAS citizens are highly represented in the U.S. 
military. However, if they choose to return home after their 
service, they face disproportionate challenges to receiving 
their full benefits.
    Our proposal would remove various restrictions that impede 
the Secretary of Veterans' Affairs from offering medical care 
to these service members.
    Moving on to the contours of this agreement reached by 
special presidential envoy and his counterparts behind me, many 
of whom are in this room, the terms of economic assistance for 
the FAS include funding generally for education, health, 
environmental issues, and infrastructure.
    Our interagency team has worked tirelessly with colleagues 
from across the U.S. Government and our counterparts in the FAS 
to negotiate the robust terms of these agreements with FSM and 
Palau.
    As a result, the negotiated terms and procedures governing 
both financial assistance and the Compact trust funds maintain 
strong U.S. oversight over every taxpayer dollar spent.
    And at the same time, we have carved out room to 
accommodate FSM and Palau requests for more autonomy and 
flexibility in framing annual budget proposals for the most 
effective expenditure of economic assistance.
    While some may argue that the United States is expending 
too many resources to secure renewed engagements through these 
packages, the reality is what the United States truly cannot 
afford is to abandon decades of investment in these special 
relationships at such a critical time.
    Rather, now is the time to send a clear signal across the 
Pacific that these Compacts remain a cornerstone of U.S. 
national interest in the region. The Department of the Interior 
urges Congress to swiftly introduce and approve this Compact 
related implementing legislation package.
    Thank you.

    [The prepared statement of Mr. Nakoa follows:]
 Prepared Statement of Keone J. Nakoa, Deputy Assistant Secretary for 
   Insular and International Affairs, U.S. Department of the Interior
    Chair Radewagen, Co-Chair Sablan, and distinguished members of the 
Indo-Pacific Task Force, the Department of the Interior welcomes the 
opportunity to join Congress today to recognize the importance of the 
Federated States of Micronesia (FSM), the Republic of the Marshall 
Islands (RMI), and the Republic of Palau (collectively, the freely 
associated states or FAS) to U.S. national interests in the Indo-
Pacific for more than 75 years.
    A month ago, on June 16th, the Administration submitted a 
legislative proposal, the Compact of Free Association Amendments Act of 
2023, to the U.S. Congress. The proposal contains funding and related 
provisions necessary to implement agreements related to the Compacts of 
Free Association (COFAs) that the United States negotiated with FSM and 
Palau. The proposal also includes funding for agreements relating to 
future assistance to be negotiated with the RMI based on a Memorandum 
of Understanding signed in January 2023. This full legislative package 
would deepen our relationships with the FAS over the coming decades and 
serves as a clear signal of the United States' commitment to achieving 
and maintaining a free and secure Indo-Pacific region.
    The Department of the Interior carries out responsibilities to 
islands in the Pacific, including the U.S. Territories of Guam, the 
Northern Mariana Islands, and American Samoa, as well as the 
strategically vital freely associated states. Additionally, from 1951 
to 1986, the Interior Department was also the lead federal agency with 
primary and comprehensive responsibility when the United States was the 
administering authority under a U.N. trusteeship for jurisdictions that 
have since become the sovereign freely associated states.
    Among the bedrock provisions of the original Compacts, eligible FAS 
citizens are granted the opportunity to come and go between their 
islands and the United States, and have since then contributed to the 
fabric of our country.
    According to the U.S. Government Accountability Office, in 2018, 
after over 70 years of close social, political, economic, and cultural 
ties first under the U.N. trusteeship and then as sovereign nations in 
free association with the United States, there were an estimated 94,000 
FAS individuals living in the United States, with a presence in nearly 
every state and territory, including about 25,000 in Hawaii, 6,000 in 
Arkansas, and 4,000 in California. To put this in perspective, 94,000 
is equivalent to about half the total population of the three nations. 
Moreover, roughly half of the FAS population in the United States are 
now U.S. citizens.
    These FAS communities serve in the U.S. military at among the 
highest rates per capita, and they live, work, and pay taxes throughout 
the United States. For the past 35 years, the Compacts have been a 
foreign policy, national security, and people-to-people success story. 
The Administration's Compact of Free Association Amendments Act of 2023 
proposal builds on this success story.
    The Administration's proposal includes supplemental provisions that 
rectify two long-standing challenges for FAS citizens. First, our 
proposal adopts language from the bipartisan Compact Impact Fairness 
Act (S. 792/H.R. 1571), as introduced in the 118th Congress, which 
restores eligibility for key Federal public benefit programs for FAS 
individuals while they are lawfully present in the United States--an 
important long-term solution to the financial impacts of these 
communities on U.S. state and territorial governments. Restoring access 
to federal public benefits would not only make a difference to these 
families, it also would allow the federal government to rightfully 
share in covering a significant portion of the financial burden 
currently placed on impacted state and territorial governments for 
hosting these small, but unique, communities without a significant 
additional administrative burden. Further, the benefits and 
compensation from the federal government would follow these FAS 
communities in whichever state or territory within the United States 
they choose to live.
    Second, our proposal also includes language to achieve the same 
goals as another bipartisan bill (S. 1913/H.R. 3948) to provide U.S. 
military veterans residing in the FAS with improved access to the 
Department of Veterans Affairs benefits they earned and rightfully 
deserve for their service. As mentioned above, FAS citizens serve in 
the U.S. military at among the highest rates per capita. However, the 
brave FAS citizens who have chosen to return home after their service, 
face disproportionate challenges to receiving their full benefits from 
their Pacific islands. These provisions would remove various 
restrictions from the Secretary of Veterans Affairs that currently 
impede the offering of medical care to these service members.
    Special Presidential Envoy Yun and his fellow Chief Negotiators 
from our FAS partners have reached agreements or understandings for 
future Compact assistance for each country that continues U.S. 
assistance in a reasonable and prudent manner. That includes assistance 
for education, health, environmental issues, and infrastructure.
    The United States and FSM agreed to a package that will provide 
$2.8 billion in grants over 20 years for core public services and 
infrastructure. Additionally, our countries agreed to bolster the long-
term health of FSM's Compact Trust Fund through a combination of $500 
million in new contributions and limiting withdrawals over the next 20 
years.
    The United States and Palau agreed to a package that will provide 
$729 million in grants over 20 years for core public services and 
infrastructure. Our countries agreed to bolster the long-term health of 
Palau's Compact Trust Fund through a combination of $100 million in new 
contributions and limiting withdrawals over the next 20 years. The 
United States will also provide Palau with $60 million to lighten 
Palau's debt burden resulting from the campaign of economic pressure by 
the People's Republic of China (PRC) and the COVID-19 Pandemic--the 
combination of which decimated Palau's tourism-based economy.
    While the United States and RMI have yet to complete negotiations 
on a full suite of agreements, we signed a Memorandum of Understanding 
on January 11th of this year reflecting an understanding that we would 
offer future assistance totaling $2.3 billion. The United States and 
RMI negotiators have committed to finalizing agreements expeditiously 
so our respective legislatures can consider them in a timely fashion.
    Under the leadership of the White House, led by Special 
Presidential Envoy Yun, my team and I worked tirelessly with colleagues 
from across the United States Government and our counterparts in the 
FAS to negotiate the robust terms of these agreements, particularly the 
accountability and oversight provisions in the Fiscal Procedures 
Agreement and the Compact Trust Fund Agreement with the FSM, and the 
Compact Review Agreement, including its appendices, with Palau. As a 
result of that work, the negotiated terms and procedures governing both 
financial assistance and the Compact trust funds maintain strong U.S. 
oversight over every taxpayer dollar being proposed. At the same time, 
we have carved out room to accommodate FSM and Palau requests for more 
autonomy and flexibility in framing the annual budget proposals for the 
effective expenditure of economic assistance.
    While some may argue that the United States is expending too many 
resources to secure renewed engagement through these Compact-related 
agreements, others will counter that the United States, as a Pacific 
nation itself, cannot afford to abandon decades of investment in these 
special relationships at such a critical time for the Indo-Pacific 
region. I am firmly in the latter group.

    As Secretaries Haaland and Blinken noted in their letter 
transmitting the Compact of Free Association Amendments Act of 2023 
proposal to Congress last month:

        Our strategic competitors are well aware that the scheduled end 
        of U.S. economic assistance is fast approaching-now is not the 
        time to leave the FAS open to predatory and coercive behavior. 
        We cannot take the goodwill generated from our historic bonds 
        of friendship for granted at a time of increasing competition 
        from the People's Republic of China (PRC) and other countries 
        to exert greater influence in the FAS. Together, these three 
        countries form a strategic bridge that stretches from Hawai'i 
        to the Philippines, an area that is geographically larger than 
        the continental United States. Under the Compacts, we have full 
        responsibility and authority for security and defense matters 
        in, or relating to, these three countries. We can deny other 
        countries' militaries access to FSM, RMI, and Palau. 
        Recognizing our responsibility and authority for defense and 
        security matters, these three countries consult closely with us 
        on their foreign policies and, recognizing the sovereign 
        foreign affairs authority of each of these three countries, we 
        consult with each of them on foreign policy matters that we 
        determine relate to them.

    The Compact-related packages will be debated in the U.S. Congress 
and national legislatures of our Compact partners. Now is the time to 
send a clear signal across the Pacific that these Compacts, and their 
related agreements, are a cornerstone of U.S. national interests in the 
Pacific.
    The Department of the Interior urges Congress to swiftly introduce 
and approve this Compact-related implementing legislation. Let us 
productively debate any issues in the most celebrated of deliberative 
bodies of our time. And finally, let us conclude our work with Congress 
and for the American people to secure a bipartisan success that lays to 
rest how committed the United States is to the Pacific and to remain 
the preferred partner for our friends and cousins in the Pacific 
Islands.

                                 ______
                                 

  Questions Submitted for the Record to Keone Nakoa, Deputy Assistant 
            Secretary for Insular and International Affairs,
                    U.S. Department of the Interior

Mr. Nakoa did not submit responses to the Committee by the appropriate 
deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman
    Question 1. The proposal has bracketed text for the Federal 
Programs and Services Agreements (FPSAs) as they are still being 
negotiated. The FPSAs are agreements that U.S. agencies are required to 
provide to the FAS, including the U.S. Postal Service. The proposal 
also has non-bracketed text for authorizing $634 million in mandatory 
appropriations for the USPS. If Congress passes this proposal before 
the FPSAs are finalized, then that would mean that the USPS would 
receive its funds without having requirements on how to spend such 
funds.

    Why does the proposal not contain brackets for the $634 million 
going to the USPS? Is the Administration asking Congress to hand 
hundreds of millions of American taxpayer dollars to the USPS and let 
them use the money as they see fit?

              Questions Submitted by Representative Moylan


    Question 1. Another major issue in this discussion is funding. At 
$7.1 billion over the next 20 years, funding COFA is no small feat, and 
neither is looking for funding sources. Additionally, since the 
administration has yet to provide Congress with an estimate of the 
costs of continuing and beginning FAS eligibility for U.S. federal 
programs and services, it is likely that COFA costs will far exceed 
$7.1 billion.

    1a) Why isn't the Biden administration taking a more active role to 
secure funding?

    1b) Additionally, with little Congressional oversight into how 
funds are expended, Freely Associated States are spending money as they 
see fit. With funding already being extremely difficult to secure, 
could you explain why the administration wants to weaken Congress's 
oversight on how these funds are spent?

    Question 2. The Biden administration has submitted a legislative 
proposal before fully concluding COFA negotiations. The current 
proposal is incomplete and not ready for introduction on the house 
floor. With the September 30 deadline fast approaching, several of the 
kinks have not been worked out and there is still much work that needs 
to be done.

    2a) Would a simplified one-year extension be feasible while we work 
out a long-term solution?

    Question 3. Committee staff have raised the issue with the COFA 
negotiation team about the potential cost of expanding federal programs 
and services for the FAS and have specifically requested your team to 
provide an estimate of the costs. Rather than finding out and sending 
our staff with those estimates, your team suggested that our staff 
reach out to each agency and calculate the costs themselves. While it 
may be the case that your respective agencies are not responsible for 
estimating those costs, it is the responsibility of the administration 
to do its due diligence and providing Congress with information it 
needs to carry out its oversight responsibilities.

    3a) Is there a cost estimate regarding the expansion of federal 
program and services for the FAS? If not, will you assign this task to 
a member of your team and have it sent to us by the end of the month?

    3b) These cost estimates are vital in understanding the true cost 
of these COFA agreements. These agreements can very well total to far 
beyond $7.1 billion when factoring in these additional costs. We 
understand that calculating a cost estimate is a difficult task, but it 
is our collective responsibility to make sure that these agreements are 
fiscally responsible and serve U.S. interests.

    Question 4. We are very concerned about the current situation with 
the RMI. Needless to say, failure to come to an agreement will have 
large implications for U.S.-RMI relations and U.S. interests in the 
region.

    4a) What can Congress do to help spur the negotiations?

    Question 5. The administration has characterized this proposal as 
part of its broader China strategy. However, this proposal seems to do 
nothing to counter growing PRC influence beyond just giving a large sum 
of money to the FAS with little oversight.

    5a) Are we missing something here?

                                 ______
                                 

    Mrs. Radewagen. I thank the witness for their testimony.
    The Chair now recognizes Dr. Mohandas for 5 minutes.

STATEMENT OF SIDDHARTH MOHANDAS, DEPUTY ASSISTANT SECRETARY OF 
DEFENSE FOR EAST ASIA, U.S. DEPARTMENT OF DEFENSE, WASHINGTON, 
                               DC

    Dr. Mohandas. Thank you, Chair Radewagen, Chair Sablan, 
Chairman Westerman, and Ranking Member Grijalva, as well as 
distinguished members of the task force for inviting me to 
testify today about the importance of renewing the Compacts of 
Free Association for the Department of Defense, and the 
critical role that the Compact States play in implementing the 
national defense strategy of the United States and our 
strategic vision for the Indo-Pacific region.
    The Compact renewal comes at a time of unprecedented U.S. 
commitment to the Pacific Islands. In September last year, the 
Biden administration released the first ever Pacific 
Partnership Strategy, which prioritizes broader and deeper 
engagement with the Pacific Islands and specifically identifies 
the successful conclusion of the Compact negotiations as a key 
objective.
    We are moving out on implementing this strategy in concert 
with our allies and partners. As you have heard from my 
colleagues, we have made great progress toward renewing the 
Compact Agreements, and we appreciate recent opportunities to 
engage with you and your staffs on the importance of renewal.
    We are here today to seek the Task Force's support to 
ensure continued economic assistance for the Compact States. 
The defense rights guaranteed by the Compact agreement provide 
security not only for the Compact States, but also the Pacific 
Islands region, and the U.S. homeland.
    I can tell you today that the renewal of the Compact 
agreements is vital to the Department of Defense's ability to 
counter aggression, deter aggression, and if necessary, prevail 
in conflict, ensuring peace, stability, and security in the 
Indo-Pacific.
    The most comprehensive challenge to U.S. national security, 
as identified by the Department's National Defense Strategy, is 
the PRC's coercive and increasingly aggressive effort to change 
the status quo in the Indo-Pacific region.
    The PRC seeks to challenge U.S. alliances and partnerships 
in the Indo-Pacific and leverage its growing capabilities, 
including its economic influence, to coerce its neighbors and 
threaten their interests.
    The PRC has also expanded and modernized nearly every 
aspect of the People's Liberation Army, with a focus on 
offsetting U.S. military advantages.
    As the NDS states, the PRC is the pacing challenge for the 
Department. Now, with our Pacific Island partners, we are bound 
by a shared history, shared values, and profound links between 
our people.
    A renewal of the Compact honors our commitments to the 
people of the Freely Associated States and facilitates 
continued strategic partnership with our FAS partners, which is 
critical to our ongoing operations, force posture, and 
footprint in the Indo-Pacific.
    Additionally, a unique aspect of our relationship with the 
FAS is their commitment and service in the U.S. military, for 
which the Department of Defense is forever grateful.
    The Compacts of Free Association demonstrate our long-term 
commitment to our Pacific Island partners, and they provide 
value across two priority areas.
    First, assured access under the Compacts provides locations 
for bilateral and multilateral training exercises and force 
posture. The assured access guaranteed by the Compact 
agreements protects the strategic approaches to the United 
States and provides for access to operate freely on critical 
terrain in the Indo-Pacific.
    The Compacts also enable the establishment of defense sites 
like the U.S. Army Garrison at Kwajalein Atoll in the Marshall 
Islands, as well as construction of the tactical multi-mission 
over-the-horizon, or TACMOR radar in Palau, as well as a 
variety of defense sites in the Federated States of Micronesia 
to facilitate agile combat employment by the U.S. Air Force.
    Failure to enact this implementing legislation for the new 
Compacts would complicate sensitive, ongoing conversations 
regarding future defense sites.
    Second, the Compact provides for mutual commitment between 
the United States and the FAS. The Compacts provide strategic 
denial rights in the FAS, enabling the United States to deny 
adversaries and third parties access to the territory, 
airspace, and territorial waters of the FAS, which is coupled 
with the United States' significant role as the Defense Force 
of the Freely Associated States.
    The Compacts are an important signal to both our partners 
and our competitors that the U.S. commitment to the FAS is 
ironclad. Thank you very much for the opportunity to testify 
before you today and I am happy to take your questions.

    [The prepared statement of Dr. Mohandas follows:]
    Prepared Statement of Dr. Siddharth Mohandas, Deputy Assistant 
                          Secretary of Defense

Introduction

    Chair Radewagen, Chair Sablan, distinguished Members of the 
Committee Taskforce, my name is Dr. Siddharth Mohandas and I serve as 
the Deputy Assistant Secretary of Defense for East Asia. I am pleased 
to be here today alongside my colleagues, Special Presidential Envoy 
for Compact Negotiations, Ambassador Joe Yun, and Ambassador Carmen 
Cantor, Assistant Secretary of the Interior for Insular and 
International Affairs. I thank you for the opportunity to testify 
before you about the strategic importance of the Compacts of Free 
Association to U.S. national security interests.
Shared Values, Interests, and History

    The United States is an Indo-Pacific nation with deep links with 
our partners in the Pacific Islands region. We share a unique and 
special relationship with this critical crossroads in the Indo-Pacific 
region. Forged on the World War II Pacific campaign battlefields of 
Guadalcanal, Tarawa, and Peleliu, we share a history of service and 
sacrifice. Today, our peoples value democracy, freedom, and human 
rights. We share the same profound concerns over the existential threat 
from climate change and seek opportunities to build prosperous and 
healthy societies. The United States recognizes that geography links 
the Pacific's future to our own: U.S. prosperity and security depend on 
the Pacific Islands region remaining free and open.
    The Compacts' renewal comes at a time of unprecedented U.S. 
commitment to the Pacific Islands. In September of last year, the Biden 
administration released the first-ever Pacific Partnership Strategy, 
which prioritizes broader and deeper engagement with the Pacific 
Islands and identifies successful conclusion of Compact negotiations as 
a key objective. It emphasizes the importance of fulfilling our 
historical commitments and strengthening our enduring relationships 
with the Pacific Islands region, including our special relationships 
with the Freely Associated States. We are implementing this strategy 
alongside our Allies and partners, including through the Partners in 
the Blue Pacific (PBP) initiative with Australia, Canada, Japan, New 
Zealand, and the United Kingdom. The PBP initiative builds on those 
countries' long-standing commitment to the region and shared 
determination to support a region that benefits the peoples of the 
Pacific. The PBP is executed according to principles of Pacific 
regionalism, sovereignty, transparency, and accountability, and, most 
importantly, is led and guided by the Pacific Islands.
    The foundation of the United States' engagement in the Pacific 
Islands region is the strong ties between the United States and the 
Pacific Islands, individually and collectively. As we engage and 
partner with Palau, Micronesia, and the Marshall Islands, the Compacts 
of Free Association communicate our long-term commitment to our Pacific 
Islands partners.
    Another unique aspect of our relationship with the Freely 
Associated States is their commitment and service in the U.S. military. 
Citizens of Palau, Micronesia, and the Marshall Islands have a long and 
proud history of service in all branches of the U.S. Armed Forces--
often higher enlistment per capita than many U.S. states. They've 
fought in our ranks in Vietnam, Iraq, and Afghanistan. The Department 
of Defense will be forever grateful for their service.
Strategic Environment

    It is impossible to discuss the national security importance of the 
Compacts without first understanding the strategic environment. The 
most comprehensive and serious challenge to U.S. national security, as 
identified by the Department's 2022 National Defense Strategy, is the 
Peoples Republic of China's coercive and increasingly aggressive effort 
to change the status quo of the Indo-Pacific region and the 
international system to align with its interests. The PRC seeks to 
challenge U.S. alliances and partnerships in the Indo-Pacific, and 
leverage its growing capabilities, including its economic influence, to 
coerce its neighbors and threaten their interests. The PRC has also 
expanded and modernized nearly every aspect of the People's Liberation 
Army, with a focus on offsetting U.S. military advantages. As the 
National Defense Strategy states, the PRC is the pacing challenge for 
the Department.
    The PRC is the only competitor with both the intent--and 
increasingly the capability--to systemically challenge the United 
States' vision of a free and open Indo-Pacific across the board--
militarily, economically, technologically, and diplomatically. The PRC 
is also seeking to expand its influence in the Freely Associated States 
and is increasing its coercive activities throughout the Pacific 
Islands region. From illegal, unreported, and unregulated (IUU) fishing 
to coercion aimed at sovereign nations that have diplomatic ties with 
Taiwan instead of the PRC, the PRC's provocative behavior appears 
focused on eroding the U.S. strategic partnership with the Freely 
Associated States.
    The Compacts of Free Association are an important signal to both 
our partners and our competitors that the U.S. commitment to the Freely 
Associated States is iron-clad.
Compacts of Free Association (COFA)

    The Compacts of Free Association with the Freely Associated States 
facilitate an unprecedented strategic partnership with our Palauan, 
Micronesian, and Marshallese partners. The Compacts of Free Association 
demonstrate our long-term commitment to our Pacific Island partners and 
they are an unparalleled pact for the Department, providing value 
across three priority areas.
    First, assured access under the Compacts provides locations for 
bilateral and multilateral training, exercises, and force posture. The 
assured access guaranteed by the Compact Agreements protects strategic 
approaches to the United States, allows for a key area for access to 
enable responses to humanitarian assistance and disaster relief 
efforts, and enables United States' power projection in a conflict. The 
FAS have previously hosted exercises including KOA MOANA, COPE NORTH, 
and PACIFIC PARTNERSHIP, which support the readiness of the joint force 
and often provide opportunities for U.S. forces to exercise alongside 
allies and partners--including critical Allies like Australia and 
Japan--enhancing our comprehensive engagement in the FAS.
    For example, throughout the summer in 2023, the United States will 
have over 100 U.S. service members in FSM participating in activities 
ranging from U.S. Navy Seabees providing civil construction and 
engineering support to U.S. Marines from the 1st Marine Expeditionary 
Force participating in KOA MOANA for small scale construction, medical, 
communications, and community engagement projects. Additionally, 
earlier this year, in support of exercise COPE NORTH 23, Pacific Air 
Forces spent time in Koror to present Palau's support to multinational 
forces, enabling intelligence surveillance, reconnaissance, and 
tactical airlift operations. The exercise aimed to further integrate 
the contributions of allies and partners to enhance security and 
stability to maintain a free and open Indo-Pacific region. COPE NORTH 
23 operations were also held in Guam, the Commonwealth of the Northern 
Mariana Islands, Japan, and FSM, and it included air forces from 
Australia, Japan, and the United States. Of note, the exercise 
concluded with a humanitarian/disaster relief event that reinforced the 
militaries' combined ability to support response to any type of 
disaster in the Indo-Pacific region, including the Commonwealth of the 
Northern Mariana Islands, the Republic of Palau, and the FSM. In 
January 2024, the USNS MERCY Hospital Ship, along with more than 600 
military and civilian personnel, will visit the FSM through the Pacific 
Partnership, providing medical services to FSM citizens. The Pacific 
Partnership began in response to the December 2004 tsunami that 
devastated parts of South and Southeast Asia, and it is the largest 
multinational humanitarian assistance and disaster relief preparedness 
mission conducted in the Indo-Pacific. The Pacific Partnership hosted 
activities in the Republic of the Marshall Islands in 2019, and then in 
Palau in 2022. U.S. military personnel are joined by other nations' 
militaries including Australia, Canada, Japan, and the United Kingdom.
    Beyond exercises, the Compacts enable key defense posture 
initiatives in the Indo-Pacific region. The Republic of the Marshall 
Islands hosts the Ronald Reagan Ballistic Missile Defense Test Site at 
U.S. Army Garrison--Kwajalein Atoll. The site conducts regular space 
operations to provide space situational awareness and the protection of 
key space assets supporting three Geographic Combatant Commands. It is 
ideally located for observation of foreign missile launches and 
facilitates advanced technology testing to provide the Department of 
Defense a cutting-edge advantage. Future cooperation with the Federated 
States of Micronesia will facilitate Agile Combat Employment (ACE) for 
the U.S. Air Force. The highly anticipated Tactical Multi-Mission Over-
the-Horizon Radar (TACMOR) in Palau will provide the Department of 
Defense an unprecedented level of situational awareness of the maritime 
domain in the Indo-Pacific region. Failure to enact implementing 
legislation for the new Compacts would complicate sensitive ongoing 
conversations regarding future such defense sites.
    Second, the Compacts provide for a mutual commitment between the 
United States and the FAS. The Compacts provide strategic denial rights 
for the FAS, enabling the United States to deny adversaries and third 
parties access to the territory, airspace, and territorial waters of 
the FAS, which is coupled with the United States' significant role as 
the defense force for the FAS. In an era of intensifying geopolitical 
competition, this mutual commitment is vital to U.S. national security 
interests and demonstrates that the United States and the FAS are bound 
together as allies.
    While the PRC seeks to expand its influence in the FAS and is 
increasing its coercive activity throughout the Pacific Islands region, 
the United States must fulfill its commitment to the FAS. Economics and 
national security are intrinsically linked; the economic assistance 
provisions in the Compacts work to combat PRC economic coercion and 
therefore reinforce the security provisions of the Compacts.
    Successful conclusion of the Compact-related agreements will allow 
the Department to continue to bolster our strategic partnerships with 
Palau, the Federated States of Micronesia, and the Republic of the 
Marshall Islands, enabling the United States to continue to demonstrate 
and exercise its unique defense relationship with the FAS.
Security Cooperation and Future Opportunities

    U.S. security cooperation operations, activities, and investments 
in the Freely Associated States are mutually beneficial and advance 
strategic partnerships with each of our partners. From routine 
exercises to strengthen U.S. readiness to subject-matter expert 
exchanges to address shared challenges such as climate resiliency and 
maritime law enforcement, we are deeply engaged with our partners in 
Palau, Micronesia, and the Marshall Islands. Each of our partners' 
economies are threatened by the impact of illegal, unregulated, and 
unreported fishing in their waters. To address this, the Department of 
Defense budgeted and began implementing $24M of International Security 
Cooperation Program funding (ISCP), under section 333 of title 10, U.S. 
Code, for Building Partner Capacity activities and is projected to 
commit more ISCP funds in future years to address maritime capacity 
building with each of the Freely Associated States.
    One of our most enduring security cooperation programs is our Civic 
Action Team (CAT) in Palau. For the past fifty years, rotational 
detachments of engineers and medical teams have promoted people-to-
people ties through community relations programs. The tri-service 
deployments of small teams to Palau facilitate larger rotational force 
rotations associated with joint and service exercises in Palau.
    The Pacific Islands region also presents opportunities for 
increased cooperation with our closest allies and partners. Australia, 
New Zealand, Japan, France, and others all share our interest in the 
region's strategic importance, and we will find ways to leverage our 
comparative advantages to further strengthen our capacity building 
activities in the region.
    For example, in 2020, the United States, Australia, and Japan 
partnered to finance a $30M undersea cable project for Palau. The Coral 
Sea Cable minimizes the risk of espionage and telecommunications 
interceptions by Chinese adversaries. This unique and multilateral 
approach will promote secure and reliable communications for our 
Palauan partners. Additionally, Australia has committed to provide 
patrol boats, supported by a regional surveillance capability and 
infrastructure upgrades to the FAS through their bilateral Pacific 
Maritime Security Program (PMSP). Japan has also assisted with donation 
of equipment, in addition to involving itself in construction of the 
Maritime Coordination Center in Palau. With our partners providing 
high-quality patrol boats, U.S. cooperation with the FAS focuses on the 
other aspects of maritime capacity-building such as training, 
infrastructure, and intelligence, surveillance, and reconnaissance 
(ISR). This demonstrates a collaborative and needs-based approach to 
security cooperation with our partners in the Pacific Islands region.
Conclusion

    Chair Radewagen, Chair Sablan, distinguished Members of the 
Committee Taskforce, and colleagues. Thank you again for the 
opportunity today to testify before you today about the strategic 
importance the Freely Associated States and the COFA-enabled strategic 
partnerships to U.S. national security. I will be happy to answer your 
questions.

                                 ______
                                 

 Questions Submitted for the Record to Dr. Siddharth Mohandas, Deputy 
  Assistant Secretary of Defense for East Asia, Department of Defense

Dr. Mohandas did not submit responses to the Committee by the 
appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman
    Question 1. What would be the estimated dollar cost if the U.S. had 
to cover or properly control the area that we currently have access to 
under the COFAs, in the absence of those agreements?

    Question 2. During the July 13, 2023 Senate Energy and Natural 
Resources Committee hearing, you were asked if you would support re-
establishment of the Office of Freely Associated States Affairs (OFASA) 
in the State Department to restore better interagency cohesion and 
coordination in COFA implementation over the next 20 years. You said 
that you would not want to ``tell the State Department how to organize 
itself for purposes of COFA'' but that you thought it could be a good 
idea.

    Are there any additional views or matters you can share with the 
Committee based on this more complete understanding of the OFASA model?

              Questions Submitted by Representative Moylan


    Question 1. Another major issue in this discussion is funding. At 
$7.1 billion over the next 20 years, funding COFA is no small feat, and 
neither is looking for funding sources. Additionally, since the 
administration has yet to provide Congress with an estimate of the 
costs of continuing and beginning FAS eligibility for U.S. federal 
programs and services, it is likely that COFA costs will far exceed 
$7.1 billion.

    1a) Why isn't the Biden administration taking a more active role to 
secure funding?

    1b) Additionally, with little Congressional oversight into how 
funds are expended, Freely Associated States are spending money as they 
see fit. With funding already being extremely difficult to secure, 
could you explain why the administration wants to weaken Congress's 
oversight on how these funds are spent?

    Question 2. The Biden administration has submitted a legislative 
proposal before fully concluding COFA negotiations. The current 
proposal is incomplete and not ready for introduction on the house 
floor. With the September 30 deadline fast approaching, several of the 
kinks have not been worked out and there is still much work that needs 
to be done.

    2a) Would a simplified one-year extension be feasible while we work 
out a long-term solution?

    Question 3. Committee staff have raised the issue with the COFA 
negotiation team about the potential cost of expanding federal programs 
and services for the FAS and have specifically requested your team to 
provide an estimate of the costs. Rather than finding out and sending 
our staff with those estimates, your team suggested that our staff 
reach out to each agency and calculate the costs themselves. While it 
may be the case that your respective agencies are not responsible for 
estimating those costs, it is the responsibility of the administration 
to do its due diligence and providing Congress with information it 
needs to carry out its oversight responsibilities.

    3a) Is there a cost estimate regarding the expansion of federal 
program and services for the FAS? If not, will you assign this task to 
a member of your team and have it sent to us by the end of the month?

    3b) These cost estimates are vital in understanding the true cost 
of these COFA agreements. These agreements can very well total to far 
beyond $7.1 billion when factoring in these additional costs. We 
understand that calculating a cost estimate is a difficult task, but it 
is our collective responsibility to make sure that these agreements are 
fiscally responsible and serve U.S. interests.

    Question 4. We are very concerned about the current situation with 
the RMI. Needless to say, failure to come to an agreement will have 
large implications for U.S.-RMI relations and U.S. interests in the 
region.

    4a) What can Congress do to help spur the negotiations?

    Question 5. The administration has characterized this proposal as 
part of its broader China strategy. However, this proposal seems to do 
nothing to counter growing PRC influence beyond just giving a large sum 
of money to the FAS with little oversight.

    5a) Are we missing something here?

                                 ______
                                 

    Mrs. Radewagen. I thank the witness for their testimony.
    The Chair will now recognize Members for 5 minutes for 
questions, and I will now recognize myself.
    Ambassador Yun, I am concerned by the way in which the 
proposal's language regarding responsibilities by U.S. agencies 
in carrying out services to the FAS have been changed from the 
2003 agreements.
    Many of the responsibilities have changed from shall to 
may, and therefore relinquishes U.S. agency obligation to carry 
out those services. In effect, the new language changes the 
responsibilities from being mandatory to discretionary.
    Is there a reason this is necessary, beyond creating space 
for agencies to have an option to not carry out those 
responsibilities?
    Mr. Yun. Madam Chair, I believe we changed the language 
because some agencies wanted a degree of flexibility and I 
don't think it changes, in any way, our commitment. But 
certainly you, as Congress, have the right, of course, to 
change that language back should you wish.
    Mrs. Radewagen. Ambassador Yun, beyond the RMI agreement, 
we have yet to receive a finalized Federal Programs and 
Services Agreement for the FAS countries. As we understand, the 
hold-up is with the U.S. Postal Service.
    Can you provide us with an estimated timeline on when we 
would receive a finalized FPSA? The lack of a clear timeline is 
further delaying our process here when we have little time as 
it is.
    Mr. Yun. We are getting very close to an agreement with the 
Post Office. As we have informed Members and staff, this has 
not been an easy negotiation, I must admit, with the Post 
Office.
    In the end, we agreed to put in language $600 or so million 
over 20 years to compensate USPS for their services. We just 
have one item that is dividing us at the moment, and I do fully 
expect we will be there very, very soon, Madam Chair.
    Mrs. Radewagen. I do have one or two other questions for 
you, Ambassador Yun. I will submit them for the record.
    I have questions for all witnesses. This task force has 
raised the issue with the COFA negotiation team about the 
potential cost of expanding Federal programs and services for 
FAS and have specifically requested your team to provide an 
estimate of the cost.
    Rather than finding out and sending our staff out with 
those estimates, your team suggested that our staff reach out 
to each agency and calculate the costs themselves.
    While it may be the case that your respective agencies are 
not responsible for estimating those costs, it is the 
responsibility of the Administration to do its due diligence in 
providing Congress with information it needs to carry out its 
oversight responsibilities.
    My question for each of you, do you have a cost estimate on 
the expansion of Federal programs and services for FAS? If not, 
I would advise you all to delegate this task to a member of 
your team, as I will be making a formal request after this 
hearing.
    Mr. Yun?
    Mr. Yun. If I may, Madam Chair, of course, we do have an 
estimate for the biggest item which is of course the Post 
Office. And the other item we don't have the exact estimate, 
but I would note that it does not involve expansion of services 
per se.
    It is the continuation of the services. But we will give 
you an estimate for sure.
    Mrs. Radewagen. Mr. Nakoa?
    Mr. Nakoa. I concur with what Ambassador Yun just 
mentioned, and I would also point out that one of the 
differences from the last Compact is that we brought in and we 
recognized the education programs, SEG, and we put it into the 
mandatory spending.
    So, whereas that once was in the discretionary side of the 
ledger for the last Compact, it is now included in the 
mandatory spending $6.5 billion package.
    So, when you talk about, like Ambassador said, expansion of 
services, that is not, I guess, what we are looking at and 
intending in our proposal.
    Mrs. Radewagen. Dr. Mohandas?
    Dr. Mohandas. Thank you, Madam Chair. I would just note 
that the Department of Defense is not directly involved in 
management of the economic assistance provisions, but we will 
continue to support Ambassador Yun, State, and Interior in 
their efforts.
    Mrs. Radewagen. I now call on Co-Chair Sablan for his 
questions.
    Mr. Sablan. Thank you very much, Madam Chair.
    Good morning again, Ambassador Yun. One issue that Congress 
will have to deal with as we work toward passage of the COFA 
agreements will be the provision for mandatory funding for 
payments under the Compacts.
    Can you please tell us why it is important to the Freely 
Associated States that Compact funding be mandatory?
    Mr. Yun. We believe it is critically important that funding 
be mandatory. I think, you, yourself, alluded, as well as 
several others to the 8-year experience in which Palau did not 
have the legislation authorized for the whole funding and it 
made their planning very difficult, and it made their budgets 
very difficult for the planning purpose and economic welfare of 
the Freely Associated States.
    It was, in fact, one of their first requests when I came on 
board last year. So, I think it is critically important.
    Second, these are long-term commitments of the United 
States. We are not there one year and then think about it again 
the next year. This is a long-term commitment.
    Compacts are long term commitments. We first entered into 
them in 1986. They define our relations with Compact States. It 
is not typical foreign assistance. We get plenty out of it.
    You noted yourself the strategic rights. And these have 
become much more urgent. Through Compacts, we control, 
essentially, the northern half of the Pacific between Hawaii 
and Philippines. This includes what I would call the first 
island chain of China.
    So, these have become critically important. Without the 
long-term commitment, I think our credibility will suffer 
enormous damage.
    Mr. Sablan. Thank you. Should we be concerned that the 
Federal Programs and Services Amendments are still being 
finalized, Ambassador?
    Mr. Yun. I don't think we should be concerned at all. As 
you know, the Federal services and programs are done on the 
basis of notification. That is, we notify you. And, of course, 
you have the right to amend those parts.
    So, in that sense, we do have a little bit of time to do 
this, and I don't see any interruptions out there, provided the 
Compact Legislation package, as it is, passes before the end of 
the current fiscal year.
    That, to me, is the most important thing. And with that 
package, our Federal services and programs will follow. Thank 
you.
    Mr. Sablan. And our major strategic competitor in the 
Pacific, of course, has been increasingly active on the ground 
in the Freely Associated States and throughout the Pacific, 
using tactics to undermine, subvert, and intimidate local 
leaders.
    Are you aware of any attempts by any government, or 
persons, or entities affiliated with the People's Republic of 
China government to derail the negotiations in any way?
    Mr. Yun. I think we see the presence and influence of China 
on a daily basis. About 3 months ago, some of you will have 
seen an 11-page letter outlined by President David Panuelo of 
FSM detailing the corruption that is practiced by China as well 
as other coercive tactics.
    We see this just below where we are from the Compact 
States. We have seen it in Solomon's, we have seen it in Fiji. 
We have seen it in many parts.
    So, to take somehow our friendship of these Compact States 
for granted will be a real mistake. And we have seen it in 
Marshall Islands where Chinese have attempted to buy, 
essentially, this is hard to imagine, but we are seeing it on 
daily basis.
    And I do think our own credibility is very much at stake 
here.
    Mr. Sablan. And it would be a shame, more than a shame, it 
would be a huge mistake if foreign government were to set 
itself up right within the quadrant right next door to it. I 
have no further time, so Madam Chair, I yield back. Thank you.
    Mrs. Radewagen. I now recognize Mr. Lamborn for 5 minutes.
    Mr. Lamborn. I want to thank the two of you for chairing 
this very important committee. And I thank our Chairman 
Westerman, Ranking Member Grijalva, for taking this so 
seriously.
    The fact that we are having this hearing, that we are all 
here, that we have set up this Committee, that we are engaged, 
shows that we agree with Ambassador Yun, that this is a very 
vital issue, with all of you.
    If there was no China, this would still be an important and 
good thing to do. The fact that China is trying to spread its 
influence in malign and negative ways makes this even more 
important, though.
    I do have some concerns with the way things stand right 
now, and I know these have been addressed in previous 
statements already, but the open-ended eligibility for various 
U.S. programs makes the final cost hard to pin down, and that 
is a concern to me.
    There are not enough guardrails, I believe, in place to 
prevent potential mismanagement. You probably all saw the 
article in the Wall Street Journal about the Bikini Atoll and 
how trust funds were depleted faster than people thought they 
should have been, and pointing to potential mismanagement.
    We have to prevent that from happening in the future, 
whether it is for an entire country or for a subdivision within 
that country.
    Also, I want to see the Department of Defense more engaged. 
You have said some good things in your testimony today and in 
Senate testimony earlier, but I want to see you very engaged in 
helping get this through Congress.
    You have to tell people, Members of Congress, that this is 
important for our national security, and you have an 
authoritative voice to make that happen. And I would like to 
see that happen.
    And, finally, I have a huge concern that money transfers, 
as good as they are, as positive as they are, if they are open 
ended, they may not accomplish what we want them to accomplish.
    I would love to see the money that is given out over the 
next 20 years create jobs, lead to better infrastructure, and 
just more prosperity.
    And I mentioned infrastructure because China uses that 
leverage to do deals with countries, and they trick countries. 
They use shoddy construction; they use bribery to get the deals 
passed in the first place.
    They use Chinese labor a lot of times, not local labor, and 
they impose debt on the recipient that is a burden for years in 
the future.
    So, to prevent, apart from all the national security things 
that China is doing that is troubling, my heart goes out to 
people where they have had these bad deals, and they don't give 
away something for nothing.
    They are not like the United States. The United States is 
not perfect, but we are very generous. And China does not do 
anything out of generosity. They always want more back than 
what they give.
    So, Ambassador Yun, can more be done in the language and in 
the deal to create jobs, and infrastructure, and things like 
this that would prevent China from getting a foothold in the 
future with the hearts and minds of the people of these three 
important countries?
    Mr. Yun. Absolutely, sir. I think I firmly believe our 
assistance must lead to sustainable economic future for them. 
This is why we have concentrated heavily on infrastructure 
investment and education. Those are the keys we believe.
    And, of course, the third one is health. Our oversight 
rate, in fact, if you look at our FPA, the Fiscal Procedures 
Agreement, it is 40 pages long. I mean, if you have problems 
sleeping, I urge you to read that.
    But it has a very strong oversight.
    Mr. Lamborn. OK, let me interrupt you because my time is 
about over. Will that language, that you just referred to, 
prevent the kind of problems that we read about in the 
newspapers?
    Mr. Yun. Absolutely. Because our trust funds are materially 
different. The United States maintains control of our trust 
fund through our voting rights in the trust fund committee, 
which is decided.
    The trust fund just went belly up in the Marshall Islands, 
it was a resettlement trust fund which had been managed since 
late 1990s, sorry, since about 2017, by the local government in 
the Marshall Islands.
    So, that was the problem, that we did indeed give up the 
management rights to that trust fund.
    Mr. Lamborn. OK, thank you. I yield back, Madam Chair.
    Mrs. Radewagen. I now recognize Mr. Grijalva for 5 minutes.
    Mr. Grijalva. I am going to yield to Mr. Case.
    Mr. Case. Thank you, Mr. Grijalva. Thank you to the 
witnesses.
    First of all, to everybody in the room and listening who 
has contributed to the negotiations, thank you very much for 
your efforts. They are coming together. We are trying to make 
sure they come together, but I just wanted to express 
appreciation.
    These Compacts must be reauthorized. That is a working 
fundamental principle on all parts. They are good for all of 
us, and I hope nobody takes that statement as leverage in the 
remaining negotiations. That would be a big mistake, but let's 
just get it done.
    No. 2, I am going to repeat something I said back in 2019, 
with other members of this Committee and this Congress, which 
was to the effect that it is fundamentally unfair to 
renegotiate these Compacts unless the legitimate concerns of 
states that gladly host Compact residents within their ohana, 
as we say in Hawaii, but who have been asked to bear the 
expense of billions of dollars in caring for these residents 
because our country has not.
    Even though this is a national issue, those concerns must 
be addressed as part of a renegotiated Compact. I am unwilling 
to let this go again, as has happened in the past, with the 
same result as we had the last time.
    So, I send that out there. Again, this must be solved. The 
Administration has come up with a solution, which is to 
incorporate the Combat Impact Fairness Act, which for most 
jurisdictions would address that.
    Mr. Moylan will have comments as well, and his concerns 
also must be addressed. And I just commend that to you. Don't 
forget this.
    Now, in that context, Dr. Mohandas, I am going to ask you, 
do you recognize that the accommodation of the concerns of 
communities that host Compact residents is an integral part of 
the submission to Congress?
    Dr. Mohandas. Yes, sir.
    Mr. Case. OK. Mr. Nakoa, you are representing the 
Administration as well. Do you recognize that?
    Mr. Nakoa. Yes, absolutely.
    Mr. Case. OK, thank you very much.
    Now, members of this Committee and others have asked a very 
legitimate question, which is, there is obviously an expense 
attached to the Compacts, and we need to fund it. We need to 
find a way to fund it.
    That projected expense at present is $7.1 billion. And by 
the way, let's make sure that we all understand that is not one 
year. That is over a long period of time.
    And, similarly, there is an expense to the Compact Impact 
Fairness Act. And presumably, if there is separate Compact 
Impact Aid, obviously that is an expense.
    CIFA has an expense of somewhere around $35 million a year, 
over 10 years, which is not a lot of money in the big picture.
    Members of this Committee and others have asked of the 
Administration the question, where is this money going to come 
from?
    And I don't think that you have come up with an answer, or 
at least you have deferred it over to Congress. We have asked 
you to come up with some suggestions, and those don't have to 
be from the Interior budget, which, as we speak in my House 
Appropriations Committee is getting slashed. And they don't 
have to come from the State Department, which in my 
Appropriations Committee last week got slashed.
    To expect that to come from Interior and Appropriations 
seems a pretty heavy lift, to be honest.
    Do you have any concrete recommendations about how we are 
going to pay for these, as we must, as we should, and again, I 
would make the submission that these are significant amounts, 
but in the context of an entire defense budget as an example, 
they are not large amounts.
    So, to all of you, where is this money going to come from?
    Mr. Yun. Thank you, Representative Case, regarding your 
question, where does the money come from? As you noted, we are 
not providing specific offsets attached to this legislation.
    However, the Administration has proposed offsets, as a 
whole, across the FY 2024 President's Budget. So, that would be 
what we have proposed.
    Mr. Case. OK. And just to clarify, in my mind, those 
offsets come from where?
    Mr. Yun. Overall President's Budget, sir.
    Mr. Case. OK, my time is winding down. Any quick ones? I 
can also submit this for the record.
    Mr. Nakoa. We can take it back, but as Ambassador Yun has 
mentioned, it is throughout the entire U.S. government, the 
President's budget presents it balances out any additional 
spending with offsets as well.
    Mr. Case. OK. I am out of time. I will get back. Thank you.
    Mrs. Radewagen. I now recognize Mr. Moylan for 5 minutes. 
Happy birthday, Mr. Moylan.
    Mr. Moylan. Very kind, Madam Chair. Thank you, Madam Chair. 
Thank you to the panel.
    To start off, in April of this year, the 22nd FSM Congress 
adopted Congressional Resolution 22-200 to reaffirm and 
reiterate that one China policy would remain as the official 
policy of the FSM.
    Madam Chair, I ask unanimous consent to insert that 
resolution into the record, Madam Chair? Just asking unanimous 
consent that we insert the Resolution 22-200 into record, Madam 
Chair?
    Mrs. Radewagen. Without objection.
    Mr. Moylan. Thank you. Madam Chair, this resolution further 
requests that the President of the Nations make no alterations 
to the diplomatic relations with the People's Republic of China 
and further expressed the mutual beneficial relationship both 
countries have benefited from over 30 years.
    So, for the panel, considering this position of FSM 
government and the reality that the COFA Agreement would allow 
the legal migration of FSM citizens to U.S. states and 
territories, is this not a concerning term of our nation's 
defense?
    We are talking about this relationship that they maintain 
with China and still allowing freedom to come on over to the 
United States, which we would like, of course, but there is 
that relationship based on the resolution with China.
    Are we not going to at least establish some vetting 
process? It is a great concern.
    Mr. Yun. So, as that noted, FSM has had a relationship or 
diplomatic relationship with China since the 1980s, and foreign 
policy is, of course, the domain of FSA states.
    And I am not sure how appropriate it would be, on our part, 
to make an objection 35 years after they have recognized China.
    Secondly, it is not diplomatic relations, per se, that 
define the nation's relationship. It is economic relationship. 
More important in our concern is the security relationship.
    So, in that sense, through Compact security relationship, 
the way we have security denials, strategic denials have not 
changed at all. Thank you, sir.
    Dr. Mohandas. Sir, what I would say from a DOD perspective 
is that FSM has been a strong security partner for the 
Department of Defense.
    We have a number of ongoing security cooperation efforts, 
and as I mentioned in my testimony, we are seeking additional 
defense sites that we believe will be valuable from the 
perspective of the National Defense Strategy and specifically 
to the U.S. Air Force.
    But I take your point, and I think that what this reflects 
is that competition with China in the Indo-Pacific is very 
real. And it is in the context, or at least partially in the 
context of that competition that we, at the Department of 
Defense, feel that the economic assistance provisions of the 
COFA are so important and that is why we are here to support 
passage of this legislation.
    Mr. Moylan. I am still very concerned that they maintain 
this relationship, but I understand what we are trying to do. 
We need them. And I appreciate the dedication that all the 
citizens of FSM and COFA States are participating in and 
joining our military service, and it is good.
    But still, to maintain that relationship with China, it is 
just really odd. We are giving them all this money, right? And 
we are still having that relationship, but that is something 
else.
    But I also like you to also continue with Congressman's 
Case and your response for where is this money supposed to come 
from, please?
    Dr. Mohandas. Thank you, sir. As you know, the Department 
of Defense is not managing the economic assistance provision, 
so ultimately, we have to defer to OMB, and State, and Interior 
on the offset question.
    What I will just say, from a DOD perspective, is that we 
have made significant progress in the Indo-Pacific in recent 
years. We are grateful for the bipartisan nature of that 
progress, and we believe this economic assistance package can 
be another bipartisan win in that respect.
    Mr. Moylan. Thank you. Madam Chair, I yield back.
    Mrs. Radewagen. I now recognize Ms. Stansbury for 5 
minutes.
    Ms. Stansbury. Thank you, Madam Chair. And I want to 
welcome the Honorable Yun, Mr. Nakoa, and also Dr. Mohandas. 
Thank you so much for being here today.
    And Madam Chair, and Mr. Ranking Member. I am truly honored 
to serve on this special task force. Obviously, the national 
security, not only of the United States, but of the globe, 
depends on our ability to address issues in the South Pacific.
    And I was heartened last week, in our bipartisan 
conversations, with our panelists and with the administration 
to hear that both sides of the aisle are deeply committed to 
getting these Compacts finished, to getting them across the 
finish line and the authorization, and to ensure that the 
United States makes good on its financial commitments through 
these Compacts and that both Republicans and Democrats are 
committed to getting this done. And I want folks out there to 
know that that truly is our commitment on a bipartisan basis.
    We are here today to discuss not only the substance of the 
Compacts, which have been deftly negotiated by the State 
Department and our special envoy because of the implications 
that it has for our national security. Especially, as China 
continues to make a concerted effort to undermine long-standing 
security relationships and economic relationships in the 
Pacific in order to gain advantages which, as we know, are 
advantages in the political, economic, and military sphere.
    New Mexico, my home state, has a strong interest in these 
issues, not only because many of my constituents play a vital 
role in serving our country as service members, but also 
because the airmen and women at Kirtland National Air Force 
Base, as well as Sandia National Labs play a vital role in 
helping to support our missions in the South Pacific. And, of 
course, many New Mexicans serve in the Pacific and have for 
many generations.
    So, I do not take these issues lightly. And the safety and 
well-being of our service members and our broader communities 
and allies in the region, including South Korea and Japan, are 
actively imperiled by expanding Chinese influence.
    Maintaining strong relationships with the Freely Associated 
States is essential to countering this influence and to 
maintaining peace and economic stability abroad and at home.
    Now, it is clear that China is gearing up to take advantage 
of strains on relationships between the United States and 
Freely Associated States, and we have no time to lose.
    In fact, as has been stated here this morning, we have 
until September 30 to get these Compacts done. So, I want to 
just take a moment to ask our panelists a few questions.
    Ambassador Yun, how would the exploration of these Compacts 
with the Freely Associated States impact our national security?
    Can you please explain some of the more nuanced aspects of 
how this affects security in the region, how that affects the 
United States position in the South Pacific, and how that 
affects global security?
    Mr. Yun. Thank you. Representative Stansbury, I really 
don't believe that this is a question of three Compact States 
turning around and giving security access to China. It is not 
that.
    But rather, it is the case that the United States will lose 
credibility within the region and beyond. And I think there 
will be erosion that will start if we don't pass. And that 
erosion will become a cliff sooner or later.
    That date might not be October 1, but it will certainly be 
a future date. Compacts are and these Freely Associated States 
are really bedrock, cornerstone, whatever you want to call it.
    I have worked with alliance relationship with Japan and 
South Korea. This is beyond that. Beyond that, and we will be 
imperiling our own influence and control of northern half of 
the Pacific. Thank you.
    Ms. Stansbury. Thank you, Ambassador, and Dr. Mohandas, you 
touched on this, but can you please help us better understand 
the role that the Compacts and our relationships with the 
Freely Associated States play in our ability to maintain 
military readiness in the Pacific?
    Dr. Mohandas. Absolutely, Congresswoman. We have two 
fundamental benefits from our Compact relationships. One is 
unfettered access, the ability to freely operate in critical 
terrain in the Indo-Pacific, and exclusive access, the ability 
to deny access to adversaries.
    Those combined allow U.S. forces to maintain readiness to 
be positioned forward in a way that strengthens deterrence and 
protects the homeland.
    Ms. Stansbury. Thank you. And Madam Chairwoman, I 
understand I am out of time, but I just want to say I am deeply 
committed to making sure that we get these Compacts done.
    We find the funding to make good on our promises and 
commitments to the Freely Associated States, and I appreciate 
your leadership on these issues. Thank you. I yield back.
    Mrs. Radewagen. I now recognize Ms. Hageman for 5 minutes 
of questions.
    Ms. Hageman. Thank you, Ms. Chairwoman.
    The Administration has characterized this proposal as part 
of its broader China strategy. However, it is unclear how this 
proposal counters growing Chinese influence beyond just giving 
a large sum of money to the FAS with little oversight.
    Does the Administration still believe this proposal is 
critical to its Chinese strategy? And if so, then can you 
explain to us how this proposal counters Chinese influence 
beyond giving the FAS billions of dollars, with each of you?
    Mr. Yun. Thank you. Representative Hageman. The underlying 
item in the Compact is our ability to control access to the 
land, the sea, and air of these countries. As long as we have 
Compacts, we do not let anyone else access we don't like. And 
that is the key, I believe.
    So, the Compacts are not something we give economic 
assistance. I would say the most important pillar of the 
Compact is the security aspect. So, without economic 
assistance, I do believe it is not going to be immediate that 
China will try to enter there or our Freely Associated States 
will allow that, but it will begin erosion, terrible erosion.
    And No. 2, I do believe all these things, our strategic 
imperative, not just in East Asia or the Pacific, but 
throughout the globe of the China challenge, will seem a little 
bit, I would say, will be hard. Our credibility will be hard. 
Thank you. And let me ask, if I may, Dr. Mohandas, to give 
Pentagon perspective on that.
    Ms. Hageman. Thank you, Mr. Ambassador.
    Yes, Mr. Mohandas, would you please respond?
    Dr. Mohandas. Thank you, Congresswoman. Fundamentally, as 
you correctly note, we are facing a profound security challenge 
from the People's Republic of China.
    It is engaging in more aggressive behavior. It is expanding 
its military, and it is expanding its activities throughout the 
Indo-Pacific in ways that often resort to coercion and pressure 
against countries in the Indo-Pacific.
    In that context, it is critically important for the 
Department of Defense, for the United States, that we maintain 
a forward presence in the Indo-Pacific, to maintain stable 
deterrence and, if necessary, to prevail in conflict.
    The access that we receive from the Freely Associated 
States is critical to our efforts to do that. As I just noted 
earlier, we have unfettered and exclusive access in critical 
terrain in the Indo-Pacific.
    And this is important to protecting the strategic 
approaches to the United States, but it is also important to 
projecting power in this vital region.
    The failure to pass this legislation would be damaging to 
our relationships with our Freely Associated States partners 
and as, Ambassador, you noted, would be, I think, deeply 
damaging to our credibility in the region at a time that we 
actually have a lot of momentum and are moving forward.
    Ms. Hageman. Dr. Mohandas, I appreciate that answer, and I 
think that is good information for the people who are watching 
this hearing and attempting to understand what it is that you 
have been working on, and what it is that we are attempting to 
do as a task force as well as the Committee as a whole.
    I would echo the sentiments that have been voiced by the 
other folks on this task force, as to all of us believing that 
this is important that we are able to enter into these 
agreements.
    At the same time, we need to make sure that we are 
protecting the fiscal responsibility of the United States and 
that we are moving forward with the correct policies.
    Just very quickly, Mr. Nakoa, I am going to ask you a very 
quick question, and that is that I understand that the RMI 
government is asking for additional funds from the U.S. 
Government. Can you explain to us exactly how much money they 
are requesting?
    Mr. Nakoa. Above it? I believe we just got some 
correspondence from RMI a few days ago that characterizes that 
they are, I believe, willing to accept $2.3 billion that we 
decided on the memorandum in June.
    Ms. Hageman. And how did you come up with that $2.3 
billion?
    Mr. Nakoa. I believe we would defer to Ambassador Yun, but 
it was characterized within the whole of the entire budget that 
we are dealing with the FAS.
    Ms. Hageman. OK, Mr. Ambassador, if you could provide just 
a bit more information on that?
    Mr. Yun. So, $2.3 billion is, of course, part of $6.5 
billion. We came to it after, I would say, 7, 8 months of 
intensive meeting where I went to both RMI and Hawaii, and my 
counterpart, Ken Kedi at the time came.
    This is an amount based No. 1 on their need, their need for 
education, their need for health care, their need for 
environment. I would say those were critical.
    We also took into consideration the ongoing nuclear issue. 
The nuclear issue, as you know, the United States tested 67 or 
so nuclear weapons in the late 1940s and 1950s. And although 
the legal issue has been settled on the nuclear issue, we also 
believe that we have an ongoing moral and political 
responsibility because radiation continues and resettlement 
continues.
    So, to deal with that, we set aside certain amount of money 
in the trust fund to be expended after discussions with the 
U.S. government according to priorities of the RMI government. 
That is why we came up with $2.3 billion, ma'am.
    Ms. Hageman. I appreciate that explanation. I am out of 
time. Thank you, gentlemen, for being here. We appreciate the 
work that you have been doing.
    Mrs. Radewagen. I now recognize Ms. Leger Fernandez for 5 
minutes.
    Ms. Leger Fernandez. Thank you so very much, Madam Chair, 
for holding this hearing. And thank you to the witnesses for 
taking your time at this hearing and throughout as we move 
forward on these Compacts to make sure that both the Committee 
understands their importance and that the American public 
understand their importance.
    And when you look at a map at where these islands and 
countries sit, where China sits, and where Hawaii and our other 
interests in the Pacific sit, it is incredibly clear that these 
Compacts are essential for continued security and our ability 
to do our work from a national security perspective.
    That map tells us everything. What I would like to hear a 
bit more about is the role in looking at this. We have had 
bases there. We have conducted military operations from there, 
but we are also building in the various countries.
    And that climate change, which is its own national security 
imperative, has uniquely impacted the FAS Island nations and 
our operations.
    Could you discuss a bit about how climate change has 
impacted us, and whether the COFA amendments, in a sense, help 
address some of the consequences of that impact? And could I 
maybe ask Ambassador Yun and then Dr. Mohandas to respond to 
that question?
    Mr. Yun. Thank you. Climate change is a serious, serious 
challenge. In the Marshall Islands, the highest point in the 
Marshall Islands, I believe, is 6 feet. We are seeing farmlands 
eroded, port facilities eroded, airport runways eroded through 
rising seawater.
    We have dealt with climate change within the overall 
context of environment issues. So, each of these pillars that I 
have discussed and the money that would be devoted to them 
includes environment.
    And, of course, the Compact money cannot deal with 
everything that goes with climate change. But we need to make a 
contribution and we will make a contribution through Compact as 
well as separate climate initiatives. Thank you.
    Dr. Mohandas. Thank you, Congresswoman. We agree, climate 
change is a national security issue and that is something that 
is clearly stated in our national defense strategy.
    Certainly, for our partners in the Freely Associated 
States, it is an existential issue, as it is indeed for us. And 
we believe that one of the strengths of the economic assistance 
package is its laudable attention to climate change and 
providing some assistance there.
    But it is part of a broader effort that the Biden 
administration has pursued, including through the Pacific 
Partnership strategy.
    This is very clearly the No. 1 issue in the Pacific 
Islands, and we are committed to being strong partners to 
assist however we can.
    From a DOD perspective, we are always thinking about the 
resilience of our facilities and installations, and that is 
something we are looking at globally, but I can assure you is a 
major focus with respect to facilities in the FAS.
    Ms. Leger Fernandez. Thank you very much. And speaking of 
security, I think we always need to remember who is it that is 
working to keep us secure and they are our service members, and 
we often hear the words thank you for your service over and 
over again. Thank you for your service.
    I believe we must say that all the time, but I think even 
more importantly is that we need to recognize and provide the 
services and the honor and respect that our veterans deserve.
    So, I would like to have you discuss a bit how the amended 
agreements account for U.S. military veterans and the need to 
improve access to VA benefits for those who dedicate their 
lives and sometimes their life to serving our country, 
Ambassador?
    Mr. Yun. In the next panel, you are going to have Chief Leo 
Falcam, who was a U.S. Marine officer for 30 years, gone back 
to Micronesia to serve his government there.
    I think that is an example of what we have in FAS 
countries. They volunteer at, I think, it is the highest rate 
of any state or territory to serve in the armed forces.
    But if you are a veteran living back home, then you don't 
get the health benefits unless you travel to Guam or Hawaii. 
And it is very expensive to travel there.
    So, what we have done is we have given Secretary of 
Veterans Affairs authority to offer full suite of services to 
the veterans of FAS.
    There is no money attached to it because he needs to decide 
which items he can offer, but what we have in mind, for 
example, is telehealth to begin with, and prescription medicine 
going there, and doctors from VA traveling now and then and to 
hold clinics there.
    I think certainly if this is enacted we will be having 
discussions with Veterans Administration to see what they can 
offer to our veterans there. Thank you.
    Ms. Leger Fernandez. Thank you, Ambassador. And I see my 
time is up and I yield back. Thank you, Chairwoman, for your 
leadership.
    Mrs. Radewagen. I now recognize Mr. Grijalva for 5 minutes 
for questions.
    Mr. Grijalva. Thank you again, Madam Chair.
    Mr. Ambassador, Mr. Yun, the discussion that the Chair 
brought up about the language change from shall to may, if this 
Committee in its wisdom decides that that language reverts back 
to the way it was, does this destroy the whole Compact 
negotiating process?
    Mr. Yun. No, sir.
    Mr. Grijalva. Those are kind of, I think, the legislative 
corrective issues that appropriate were brought up with the 
share that the Committee could take care of.
    On the issue of offset, how much is it going to cost, where 
are the resources coming from? We are going to get caught in 
that morass about we have a balanced budget, where do we go 
look for money?
    And I think the issue of mandatory is essential in this 
discussion. And where the money comes from, I think, is a 
shared responsibility on the part of the Federal Government, 
that includes DOD, that includes Commerce, not just Interior, 
as the only likely source for this money, or State Department.
    This is shared. Indeed, this issue is of such strategic and 
alliance importance, that the issue of the resources and the 
offset is a shared responsibility across all the Federal 
agencies with no exceptions.
    So, I leave that as not an answer, but it is an observation 
going forward and want to thank you for where we are at right 
now. I think there is still urgency. I don't know how the 
discussions have gone in terms of, Mr. Ambassador, your 
discussions with the Senate.
    Any reflection on your part as to where that is at, at this 
point and those in the work on the Senate side? Because I am 
assuming they are on this process as well as we are.
    Mr. Yun. Yes. Just like your task force, we have gotten 
strong bipartisan support from the Senate side. So, on both 
Senate side and House side, we see nothing but substantive 
support.
    So, I am very hopeful that we will find a path.
    Mr. Grijalva. I appreciate it. And thank you, Madam Chair 
Radewagen, and I yield back.
    Mrs. Radewagen. I will now recognize Chairman Westerman for 
5 minutes for questions.
    The Chairman. Thank you, Chair Radewagen. Also, again, 
thank you to the witnesses. You have all communicated to us the 
request to keep the bracketed RMI funds and provisions in place 
even if the negotiations are not completed before the September 
30 deadline.
    Is it the view of the Administration that it is appropriate 
to ask Congress to approve funds for an agreement that is not 
completed yet?
    And do you all understand where I am coming from, and where 
the Committee is coming from, on how this could be fiscally 
irresponsible and open the door for the misuse of funds?
    Mr. Yun. Of course, the agreement will have to be approved 
by you. We are not asking to approve the agreement that has not 
been signed, we will submit the assigned agreement to you for 
approval.
    So, your own decision, I believe, will come at that point, 
sir.
    The Chairman. Anybody else wish to add to that?
    Mr. Nakoa. Just concurrence. And to say that the $2.3 
billion that we are requesting to be included and set aside 
would help us to just ensure that that funding is available 
when we do reach that agreement with the RMI, as opposed to 
ending up in a situation like we saw in 2010, with Palau, where 
we had to keep going back again.
    The Chairman. Right. And the $7.1 billion proposal has all 
the funds as mandatory spending. And as Mr. Grijalva talked 
about, there are pros to mandatory spending, and from our 
perspective, there are also cons to mandatory spending.
    That means that Congress will not have the opportunity to 
exercise annual oversight over the authorization and 
appropriation of the funds if it is mandatory.
    And considering the news regarding the depletion of the 
Bikini Resettlement Trust Fund, it seems to me that Congress 
needs to really consider strongly whether we should waive our 
oversight authority by making the funds available.
    Why is the Administration requesting that the funds be 
mandatory?
    Mr. Yun. This is for the economic well-being of FAS states. 
I think that is the primary reason they need to plan. They need 
to plan and not depend on uncertainties of year-to-year 
appropriation.
    Second, these are long-term commitments by the United 
States. These are long-term commitments for our own strategic 
reasons, for our own strategic dependence on these countries.
    So, I would say if we don't do mandatory 20-year agreement 
this time, it will show our adversaries, our competitors, that 
our commitment to this region has declined.
    And I think that will be a poor signal to send at this 
time, sir.
    The Chairman. I know our Federal agencies and states that 
receive Federal funding, they depend on appropriations and have 
to plan around that.
    So, I am not saying it couldn't be done, but also 
understand the point you are coming from, from long-range 
planning and doing an agreement like this to have the funding 
secure.
    In the July 13 Senate hearing, Mr. Mohandas, you stated 
that your office was not directly involved in the COFA 
negotiations and that, in essence, as a Defense Department 
official, you deferred to other administration agencies on COFA 
renewal questions.
    While we understand that we are here to renew economic 
provisions of the agreement, there is some concern about the 
seemingly minimal effort by your agency to be part of the 
negotiations.
    We have heard from your colleagues how important these 
agreements are and how failure to pass these agreements would 
put DOD at risk, our equities at risk, and your agency's lack 
of effort does not necessarily reflect that importance.
    Can you commit that you and your agency will do a better 
work with this Task Force Committee as we move forward on the 
COFA?
    Dr. Mohandas. Chairman, I am here today because the 
Department of Defense feels that passage of this COFA 
legislation is incredibly important to the work of the 
Department of Defense and to our national security.
    Just to clarify, sir, we have been very involved in making 
the case that is, as I said, why I am testifying today and we 
testified to the Senate. We have engaged with Members and staff 
over a period of months, and we have also been in full support 
of State and Interior on this issue.
    What I was just clarifying is that we are not directly 
involved in the economic management of the funds because they 
are economic assistance funds, but we are 100 percent 
supportive of the COFA renewal, and we will continue to 
strongly make that case.
    The Chairman. I appreciate your work and I appreciate the 
commitment going forward in your explanation, because this is, 
as everybody said, it is important to America, it is important 
to the Freely Associated States, and it is also important to 
the Senate, and the House, and the administration. So, I look 
forward to working with you all as we go forward, and I yield 
back.
    Mrs. Radewagen. I will now recognize Ms. Porter for 5 
minutes for questions.
    Ms. Porter. Thank you very much. I wanted to ask, 
Ambassador Yun, if you could describe some of the oversight and 
checks and balances that are built into the agreement and also 
if you might identify for this Committee additional and ongoing 
oversight needs that this Committee might need to think about 
going forward?
    Because there have been, as you know, some challenges in 
the past, for example, there was supposed to be groundwater 
monitoring done by the Department of Energy at Runit Dome that 
was not performed because of COVID, but then, long past kind of 
that period, they have not kept up with that.
    We have asked for documents to be translated into 
Marshallese, from the Department of Energy, that would help 
give information about possible nuclear hazards. We made that 
request now 3 and 4 years ago, and it still hasn't happened.
    So, I wondered if you could both talk about how you thought 
about oversight in helping to put this agreement together to 
make sure that the funds are being spent in a way that will 
really benefit the long-term needs of the people of the 
islands.
    And then also kind of what else this Committee might as it 
builds a forward agenda. Because I don't think the COFA 
agreement, which I am very hopeful that everyone will come to 
agreement with, I hope the Marshallese people will accept this 
agreement, but this is not the end. We can't just pick up this 
issue 10 years from now. This is a long-term strategic ally, 
and this Committee needs to have continued engagement. So, if 
you would say a little bit about those things, I would be 
grateful.
    Mr. Yun. Thank you, Representative Porter. There are really 
two key elements in oversight, in my view. One, is what is the 
executive branch responsibility? And second, is how does the 
executive branch inform and get approval from the legislative 
branch?
    The key is when executive branch, whether State Department 
or Interior Department deals with COFA issues with FAS, what is 
their role? And to me, we must have control of two central 
bodies.
    One is the trust fund committee that decides how the trust 
fund is to be spent. Second, is the fiscal procedures, fiscal 
committee. And on those two, we have retained control and this 
is the difference between the current arrangement and what the 
Resettlement Trust Fund for RMI had where the Department of the 
Interior gave up their management rights to that settlement 
fund. So, that is a key aspect.
    Second, how is that conveyed and approved by the 
legislative branch? And in that we have reporting requirements, 
and those reporting requirements should state clearly where you 
can raise objections and where you can tell us, well, this is 
not quite right.
    So, those two, in my mind, the reporting requirement and 
control by the executive branch on our dealings with these 
trust fund and fiscal procedures, those two, in my mind, are 
how the oversight should be done.
    Ms. Porter. Thank you very much. And I really do want to 
emphasize to all of the members of this Committee that I think 
these are very significant changes that I think should really 
bring a lot of confidence in the investment that we are going 
to make in our allies here. Because I think these arrangements 
will give a sort of steady and continued level of engagement 
that I think will help make sure the funds really deliver for 
the people that they are intended to help.
    I am in full support of this agreement. I appreciate your 
service to the United States and to the world in this regard 
and I am really urging my colleagues on both sides of the aisle 
to understand the need to move forward quickly on approving 
these agreements. Thank you and I yield back.
    Mrs. Radewagen. I thank the witnesses for the valuable 
testimony and the Members for their questions. The members of 
the Committee may have some additional questions for the 
witnesses, and we will ask you to respond to these in writing.
    The first panel is now dismissed, and I invite the 
witnesses for our second panel to come to the table.
    I will introduce our witnesses for our second panel as they 
come up. His Excellency, Surangel S. Whipps, Jr. President, 
Republic of Palau; the Honorable Kenneth Kedi, Speaker, the 
Parliament of the Republic of the Marshall Islands; and Mr. Leo 
A. Falcam Jr., Chief Compact Negotiator, Federated States of 
Micronesia.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statements to 5 minutes, but their 
entire statement will appear in the hearing record.
    To begin your testimony, please press the talk button on 
the microphone. We use timing lights. When you begin, the light 
will turn green. When you have 1 minute left, the light will 
turn yellow. And at the end of 5 minutes, the light will turn 
red, and I will ask you to please complete your statement.
    I will also allow all witnesses on the panel to testify 
before Member questioning. The Chair now recognizes President 
Whipps for 5 minutes.

STATEMENT OF HIS EXCELLENCY SURANGEL S. WHIPPS, JR, PRESIDENT, 
                       REPUBLIC OF PALAU

    Mr. Whipps. Chair Radewagen, Co-Chair Sablan, Distinguished 
members. [Speaking Native language] and thank you for this 
hearing.
    I am accompanied today by Compact Negotiator Kaleb Udui, 
Senator Kazuki Topps Sungino, Delegate Mengkur Rechelulk, and 
Ambassador Hersey Kyota.
    The relationship between the United States and Palau began 
with the battles that decimated our islands and the final step 
to the Philippines. Palau was then governed by the United 
States with a commitment to the UN to make us self-governing, 
but the United States sought to preserve its strategic control 
from Hawaii to the Philippines with financial and domestic 
program assistance.
    Palauans wanted self-government, but admired and felt the 
deep kinship with the United States and the solution was a free 
association. President Reagan in urging acceptance said, you 
will always be family to us.
    Palau is the western most Freely Associated State. We have 
a land mass similar in size to Guam and an EEZ the size of 
Texas. We provide land needed for U.S. defense. The military 
says Palau is part ``of the homeland,'' and the United States 
has put its closest to Asia early warning radar in Palau.
    Yet, we are challenged economically. The Compact provides 
us free access to the United States, domestic Federal programs, 
and financial assistance primarily through a trust fund that 
was to last for 50 years, but which is proven inadequate.
    Wisely, it also required joint reviews of Palau's needs 
with the U.S. commitment to act on these. This legislation 
would not only provide needed financial stability program 
assistance for 20 years, but a basis for continuing thereafter.
    Palau and the United States are joined at the hip, and 
Palau recognizes Taiwan's right to exist. Continuation of the 
relationship, however, can't be taken for granted. Palau is 
subjected to extreme economic carrots and sticks to shift its 
alliances.
    China, our largest source of tourists, cut off visits when 
we did not shift alliances. This coupled with the Pandemic 
shrank our economy by more than 30 percent. We cut spending and 
increased revenue but still had to borrow for essential public 
services.
    Our economy is still struggling. China has offered to send 
more tourists than ever and make a huge investment in new 
industries if we shift.
    For the last 10 years, China has provided the largest 
amount of investment. The United States doesn't have a command 
economy, but this legislation is geared toward growing Palau's 
economy and building resilience, not only through its economic 
assistance, but through a robust Joint Economic Advisory Group 
and an annual economic consultations.
    There are though three additional measures to take. One, is 
to re-establish an office of Freely Associated State Affairs in 
the State Department with coordinators from Interior and 
Defense, departments that have greater equities reporting to 
the NSC.
    The Congress insisted on such an office in initially 
approving the Compacts. State, however, later got rid of it. 
Some at State wanted to treat us like other island nations, but 
our relationship is much closer than the United States has with 
any other nation.
    None let the United States exercise aspects of their 
sovereignty. None have U.S. domestic programs. The Compact 
review succeeded only after we got Presidential Envoy Yun who 
could ensure attention from top decision makers and worked out 
fair solutions, but we need constant policy level attention.
    We are on the front line of competition and not just 
because of the early warning radar makes us a target. Thus, my 
second request, that you urge the Administration to complete 
the negotiation of the U.S. program agreements while Envoy Yun 
is in office.
    And, finally, I request the restoration of FEMA coverage. 
Since then, other nations have done more to help us after 
typhoons. We are seeing FEMA helping Guam after typhoon Mawar.
    Our familiar relationship was significantly undermined by 
the failure to implement the 2010 Review Agreement for 8 years 
due to internal U.S. political reasons.
    While, in the meantime, Palauans were being wooed by China. 
Enacting the legislation by the negotiated date of September 30 
is critical. Palau's Congress has ratified the agreement. I 
support it.
    As family and part of the homeland, I respectfully request 
you do, too. Thank you for your consideration.
    [Speaking Native language].

    [The prepared statement of Mr. Whipps follows:]
     Prepared Statement of His Excellency Surangel S. Whipps, Jr.,
                           President of Palau
    Chairwoman Radewagen, Co-Chair Sablan, and other Distinguished 
Members, Thank you for this hearing.
    I am accompanied by Palau's Chief Negotiator, Finance Minister 
Kaleb Udui, Jr.; representatives of Palau's Senate and House of 
Delegates, Senator Kazuki Topps Sungino and Delegate Mengkur Rechelulk, 
Chairman of the Committee on Ways and Means; and Palau's Ambassador to 
the United States, Hersey Kyota, the Dean of the Diplomatic Corps in 
the U.S.
    The relationship between the U.S. and Palau began 79 years ago with 
battles that completely decimated our islands, but liberated our people 
and were the final step toward retaking the Philippines.
    The U.N. was founded to end colonialism as well as to secure peace. 
So, Palau and the other Pacific islands taken from Japan were entrusted 
to the U.S. as the only ``Strategic Trust'' of 11 U.N. territories to 
develop into a self-governing status.
    Later, when the U.N. pressed for this, the U.S. sought to preserve 
its strategic control over an expanse of the Pacific as large as the 48 
contiguous U.S. States from Hawaii to the Philippines with financial 
and domestic programs assistance.
    Palauans wanted self-government, but had grown to admire and feel a 
deep kinship with the U.S.
    The solution was national sovereignty but in a unique free 
association with the U.S. President Reagan, in urging acceptance, said, 
``You will always be family to us.''
    Palau is the freely associated state closest to Asia and provides 
land needed for its defense. This is why a senior U.S. military 
commander said Palau is part of ``the homeland.'' The U.S. has put its 
closest-to-Asia, early warning radar in Palau, and is preparing for air 
facilities and considering a seaport.
    We let the U.S. control our borders against forces of other 
nations, and we refrain from interactions with other nations that the 
U.S. says would compromise its security. The concessions are vital to a 
free and open Indo-Pacific.
    The Compact of Free Association provided financial assistance, 
primarily through a Trust Fund that was to last for 50 years--but which 
both governments now agree was inadequate, a number of domestic 
programs, and free access to the U.S. for our small population.
    The Compact also, however, recognized that our needs might be 
greater over time. It required periodic joint reviews of the entire 
relationship as well as Palau's needs, with a U.S. commitment to act on 
the conclusions.
    The legislation requested by the U.S. Executive branch would 
implement an international Agreement that is the product of the 30th 
Anniversary Review. I strongly support it, and Palau's National 
Congress has already approved it in a resolution attached to my 
statement. I respectfully request that you and your colleagues enact 
legislation to implement it by the negotiated date of September 30th.
    The legislation would eliminate a fundamental inequity and 
unrealistic aspect of the relationship. This is the U.S. having 
strategic rights without end but only providing for funding for 50 
years. It would not only provide needed assistance over the next 20 
years but provides a basis for financial and programs assistance 
continuing on the same terms after. It would repurpose the Trust Fund 
to be available for needs that would otherwise not be met.
    Palau and the U.S. are `joined at the hip.' Palau also recognizes 
Taiwan's right to exist.
    Continuation, however, cannot be taken for granted. The majority of 
Palauans and I want it to maintain our alliances, but the competition 
is working overtly and subtly to change this.
    Palau is being subjected to extreme economic `carrots and sticks' 
to shift its alliances. Tourism is our largest industry. China, which 
had been our largest source of tourists, cut off visits when we did not 
shift. This, along with the pandemic ending other tourism, shrank our 
economy more than 30% in just five years.
    That means real pain for people as well as public service 
challenges. It forced us to cut our budget, improve revenues, and 
borrow to continue essential government operations. Then, China offered 
to send more tourists than ever and make a huge investment in a new 
industry if we shift.
    It is also working through investments with individuals to change 
views over the long-term. The U.S. does not have a command economy.
    It also has not sufficiently recognized the influence slowly being 
gained by China. Until recently, policy-level attention has not been 
given between 15-year Reviews and, even then, its general approach was 
based on past, not current, needs.
    Consistent with my request, however, this Agreement is also geared 
toward growing Palau's economy, not only through its assistance, but 
through a more robust joint Advisory Group making recommendations to 
both governments and in Annual Economic Consultations.
    The relationship was also significantly undermined by the failure 
to approve the 2010 Review Agreement for eight years for internal U.S. 
reasons, not any question about the Agreement, even though interim 
assistance was continued at the 2009 level.
    In short, these are the reasons why enacting the legislation by 
September 30th is so critical to both of our nations.
    There are, though, three additional, crucial measures that you 
should also take.
    One is to re-establish an Office of Freely Associated States 
Affairs at the level of the State Department's Office of Australia, New 
Zealand, and Pacific Islands Affairs, ANP. The Director should be 
appointed by the Secretary of State and have Coordinators appointed by 
the Secretaries of the Interior and Defense. It would staff the 
Interagency Group on Freely Associated Affairs that the bill would 
continue--really revive--and should report to the National Security 
Council.
    The Congress insisted on such an Office in initially acting on the 
compacts. It was established by Executive order, however, and the State 
Department got rid of it some years later and relegated the Freely 
associated states to a desk officer or two in ANP. This is not a 
comment aimed at ANP staff, but we would probably would not have had 
some of the problems we have had if the Office had been continued.

    Some at State have wanted to treat us as much as possible like the 
other island nations for which ANP has responsibilities. Our 
relationships, however, are totally different and much closer than the 
U.S. has with any other nation.

     None let the U.S. exercise fundamental aspects of their 
            sovereignty, doubling the size of the 48 States for 
            strategic purposes.

     None is part of ``the homeland'' next to Asia.

     Domestic programs apply in none.

    Also, Interior as well as Defense have greater equities in the 
relationship than State. The current Review stalemated when it was led 
by ANP. The first Review did, too.

    The first reached agreement after Palau appealed to Secretary of 
State Clinton personally and she assigned top deputies to get it on 
track.
    This Review succeeded after Members of Congress of both parties and 
the NSC's Indo-Pacific Coordinator, Kurt Campbell, agreed with my 
request for a presidential envoy who could ensure attention from top 
decisionmakers across the Executive branch and Joe Yun was appointed. 
He is an extraordinarily perceptive, creative, and skilled--but tough--
representative of the U.S. He dug into the issues and worked out fair 
compromises.
    Envoy Yun is irreplaceable, but we need constant policy-level 
attention. We are on the frontline of the competition--and not just 
because the early-warning radar makes us a first target.
    Thus, my second request: That you urge the Administration begin and 
do all possible to complete negotiations on the necessary U.S. programs 
agreements while Envoy Yun is in office and that you approve the 
agreements in this legislation.
    Finally, I request provisions for disaster assistance, preferably 
by restoring FEMA coverage. We--and, ultimately, the relationship--are 
extremely vulnerable to just one natural disaster. Our people know that 
our neighbors, Guam and the Northern Marianas, have recovered from 
typhoons because of FEMA. We are no longer covered, and our people--and 
potential investors--lack the security it provides. Other nations have 
done more for us after typhoons than the U.S.
    Thank you for your attention, consideration, and action.

                                 ______
                                 

   Questions Submitted for the Record to His Excellency Surangel S. 
               Whipps, Jr., President, Republic of Palau
            Questions Submitted by Representative Westerman
    Question 1. The Biden administration's proposal includes provisions 
to continue support for mutually agreed institutional capacity through 
assistance and cooperation between the judicial branches of our 
respective government. Given the importance of independent judiciaries 
and rule of law in preserving democracy and individual liberties, can 
you please describe your assessment of the value of the Judicial 
Training program? In light of the press reports and government actions 
in the region relating to, and in some cases confirming, criminal 
malign and corrupt PRC political warfare aggression, are your 
government prosecutors and law enforcement agencies prepared and do you 
have the capacity to investigate, prosecute criminal acts of 
corruption?

    Answer. Mutually agreed institutional capacity building for Palau's 
judiciary and members of the Palau Bar provides essential support and 
training for our judiciary. Palau is one of the few U.S. modeled 
systems of government in the Indo-Pacific region. As such, recruiting 
and retaining U.S. trained attorneys and judges to support democracy, 
our preferred system of government, requires competitive resources. The 
Judicial Training Program helps provide it.
    The Program in addition to other Compact Agreement assistance 
provides critical resources to support Palau's sustainability as a 
democratic, free market state in free association with the U.S. 
Especially because the Agreement continues the policy of not letting 
our Judicial branch receive monies from annual U.S. budgetary 
assistance or from the Compact Trust Fund, the Judicial Training 
Program is vital for supplementing the continued education of our legal 
professionals. Without this training, other governments in the region 
offer to step in and provide training shaped by legal systems that are 
different from our own--and from the U.S.' In the interests of both of 
our nations, I do not want to see a gap created that will facilitate 
this.
    Palau has the legal framework and institutions to investigate and 
prosecute corruption, but greater resources and mutual assistance would 
be an invaluable contribution to recruiting and retaining the quality 
U.S.-trained attorneys and judges needed to implement our laws and 
combat the challenge you cite. We are deeply committed to this 
endeavor.
    The Compact also makes U.S. law enforcement assistance available.
    U.S. assistance is key in ensuring justice and security in Palau 
and, therefore, in the Indo-Pacific region. We are grateful to the U.S. 
Government and its Congress for the support it has provided in these 
regards and hope that it will continue.

    Question 2. What has been the economic performance of Palau's trust 
fund under the COFA? What sort of ways has Palau worked to improve 
fiscal responsibility and democratic processes?

    Answer. The economic performance of Palau's Compact Trust Fund has 
been quite good. The Fund was established in Fiscal Year 1995 with $66 
million, $4 million was added in FY1997, and $65.25 million in FY18. 
After $151 million in withdrawals, it recently had a balance of 
$278,456,000.
    Raymond James and Associates is the Fund's Custodian and the 
Investment Consultant. Previous Custodians have been Morgan Stanley, 
the Bank of Hawaii, and, initially, Merrill Lynch. A dozen firms, 
including some of the biggest names in the business in the U.S., manage 
different elements of the portfolio.
    The $100 million in additional U.S. contributions that the Compact 
Agreement would provide would help the Trust meet needs that would not 
otherwise be met through other U.S. assistance and local revenue. It 
would also reduce the need for borrowing for essential government 
functions. The unexpected and devastating shock to the economy from 
China's tourism political pressure tactic and the Covid pandemic 
underscore the necessity and vital nature of this assistance as well as 
the need to continue prudent, professional management of the Fund.
    In general, Palau's record for responsible fiscal management has 
been recognized by the U.S. Executive branch, as is reflected in the 
Compact Agreement.
    We work closely with the Interior Department, which, as you know, 
administers Compact assistance, to improve and enhance our capacity in 
this regard. For example, we sought, and Interior granted, funds and 
technical assistance for upgrading our financial management system. 
This will further improve the capabilities of the various departments 
of our government and our overall reporting on spending. It will also 
help reduce staffing needs.
    My Administration's signature achievement in this area is a major 
Fiscal Responsibility and Debt Management Act. It codifies best 
practices and strengthens our ability to manage our increased debt.
    A major portion of the debt is for just continuing basic government 
services in addition to amounts borrowed for infrastructure that will 
help grow our economy. Borrowing for government services has been 
unavoidable but is not a practice that is sustainable.
    The debt for government operations is due to China's effort to 
pressure us into shifting alliances by making our major industry, 
tourism, dependent upon visitors from that nation and our refusal to 
comply and due to the Covid-19 pandemic, which suspended visits from 
other nations. These factors combined to shrink our economy by 30% in 
five years.
    We tried to cope by cutting spending and taking other fiscal 
responsibility measures but had to borrow to continue essential 
government services. Because our economy had been better before, the 
Asian Development Bank (ADB) only offered us loans instead of grants 
(unlike the other two states in free association with the U.S.) for 
Covid revenue losses. With U.S. States and territories, municipalities, 
and Native American nations receiving Federal grants for Covid revenue 
loses, Palau became the only U.S.-affiliated jurisdiction to have to 
incur substantial debt to continue government operations during the 
pandemic.
    Our tourism industry is recovering as we try to develop markets 
other than China, but the recovery is slower than ADB and other 
economists have projected. Developing new tourism markets is not easy, 
particularly because of our limited air service. To improve it, the 
runway of our international airport needs to be extended.
    Another major accomplishment in fiscal responsibility is a complete 
overhaul of our tax system. It features a Value Added Tax and a fairer 
business profits tax. The modernized system is compliant with U.S. and 
international standards and should grow our economy.
    Major goals of my Administration are to improve Palau's investment 
climate and, in particular, to attract U.S. in addition to regional 
investors. In this, we are working to diversify Palau economy beyond 
tourism and fisheries into finance in particular. As the westernmost 
area that a top U.S. military commander has said is ``part of the 
homeland,'' we are uniquely positioned for this. U.S. companies should, 
for example, relocate from Chinese influence locations to the security 
of Palau. So, we are making great efforts in this regard with U.S. 
agencies in addition to Interior, such as the U.S. Trade and 
Development Agency and the U.S. International Development Finance 
Corporation, with the help of the U.S. National Security Council We are 
very grateful for the bipartisan support in Congress that we have 
received for this as well.
    U.S. investment will not only benefit our private sector but will 
advance and secure democracy in Palau. Along with U.S. financial and 
programs assistance, it will make it more difficult for those who are 
tempted by Chinese investment and economic activity offers that come 
with the price of shifting our alliances from feeling that Palau has no 
alternative but to do so.

                                 ______
                                 

    Mrs. Radewagen. I thank the witness for their testimony.
    The Chair now recognizes Mr. Kedi for 5 minutes.

STATEMENT OF THE HON. KENNETH KEDI, SPEAKER, PARLIAMENT OF THE 
                REPUBLIC OF THE MARSHALL ISLANDS

    Mr. Kedi. [Speaking Native language], Aloha and hello to 
everyone distinguished guests here.
    Let me just briefly go on record and respectfully correct 
the mis-statement by my new friend, Ambassador Yun. Rona was 
never for sale to anybody. And it cannot be. It is 
constitutionally prohibited.
    Let me, honorable Members, share a brief history of the 
Marshall Islands sacrifice with the United States and the 
special and unique relationship that we have.
    World War II, when the Japanese were all over the Pacific, 
including the Marshall Islands, our scouts played a major role 
in showing where the Japanese were, so that the armed forces 
could capture the region smoothly.
    Later on, in 1946 to 1958, another war we were in the 
middle of it again, without no choice, the Cold War. The former 
Soviet Union with the United States. The Marshall Islands were 
in the middle of it also.
    This is where the massive display of power of United States 
armament power when the 1967 bombs were tested, especially the 
Provo shot 15 megaton that was displayed in the Marshall 
Islands. And we believe that is when the Cold War started to 
recede.
    Unfortunately, as a result, a lot of cancer, a lot of 
environmental damages, food contaminated, land contaminated. My 
parents died. One of lung cancer, metastatic brain tumor from 
the lung. My father never spoke, but he had the cancer.
    My mother also died prematurely while I was still in 
elementary school. And this is another unique story for me. The 
rest of the Marshall Islands and most family have gone through 
the same.
    Let me further state this for record. Kwajalein on the 
Marshall Islands. It is a premier military site. That is 
another sacrifice. Giving our traditional land for military 
installation in the event that there is any warhead coming from 
who knows where, Marshall Island Kwajalein Base will be the 
first shield of defense before anything could hit Guam, Hawaii, 
California, or Washington DC, for that matter. That is in the 
Marshall Islands. Our armed forces, as stated earlier, highest 
per capita of enrollment of our young men and women are from 
the region, including Palau, FSM, and RMI.
    We are serving and we served in Afghanistan and also in 
Iraq and continue to serve today, even without the benefit of 
our returning veterans, as we spoke about earlier.
    The record in the United Nations, aside from Israel, being 
the first to vote with the United States, please take a look 
who is second and third most of the time. That is Marshall 
Islands.
    This is our commitment. We are here to stay. 20 years? Do 
you want 50 years? We will go for another 50 years.
    I want to thank my colleague, Ambassador Yun, for securing 
an MOU with our former chief negotiator foreign minister. It 
was a good MOU, but we are here to try to see if we can make it 
better to meet the need of our people, not want, the need of 
our people in this special and unique relationship.
    There are several good things in the MOU. The sector grant 
annually, and then the nuclear museum, climate change, seed 
money, which is really important. Securing the Marshall Islands 
is securing the United States.
    You have the Kwajalein in the middle of it all, and I can 
list several others, but let me get into the shenanigans that I 
get to hear a lot from the State Department and a couple of 
other places.
    And it was mentioned here today, full, and final settlement 
they always say under the Compact, Section 177. By the way, 
there is no such word in the Compact as final.
    Only full settlement in Article 10 of the Compact, insofar 
as Article 9, it is just and adequately paid. And when it is 
not just and adequately paid, it will never be final.
    Let me continue on with the treaty between the two 
countries. We agree that we have to establish a nuclear claims 
tribunal. And we did that. The tribunal was supposed to 
aggregate the claim and they did. And what was the number they 
came up with? $3.118 billion. That is not my number. That is 
neither your number. It is the tribunal's number, under the 
treaty that we agreed that it is supposed to be established to 
address this issue.
    And then in President Obama's Panel Report of 2009, Cancer 
Panel Report, it says that the U.S. Congress must pay the 
tribunals award. And let me further go on, a Special Human 
Rights Council from the United Nations came to the Marshall 
Islands, came out with a report, and I think it is important 
that I quote some of his findings: ``The nuclear testing result 
both immediate and continuing effects on the human rights of 
Marshallese.'' And he made recommendations such as guarantee, 
``we have to guarantee and right an effective remedy for the 
Marshallese, including by providing full funding for the 
Nuclear Claims Tribunal and award adequate compensation of the 
past future claims.''
    And he further asks that the United States go on record in 
apologizing to the Marshall Islands. We have yet to get an 
apology.
    Let me put some numbers in perspective, Your Honor. 
Marshall Islands test site, 6.3 billion curies of Iodine-131. 
Nevada test site was 150,000,000 curies of Iodine-131 exposure.
    Nevada test site, 1403 kiloton of explosive yields. 
Marshall Islands, 108,496 explosive yield. And the compensation 
for Nevada test sites, it is close to $4 billion. Now, as we 
speak, the Marshall Islands was $150 million.
    Lastly, let me wrap it up, Your Honor. I would like to also 
ask that we assist our Marshallese, your fellow citizens that 
are in the United States, to be eligible to all the Federal 
programs that they should be eligible to.
    They are taxpayers, they work, they pay taxes, they are 
business people, they own their homes. Yet, when it comes to 
try to reap the benefit, they are not given the opportunity.
    So, we look forward to actions on this listed item above, 
and we humbly request that we address these needs today. Once 
we address these needs today, we are ready to sign the Compact 
tomorrow.
    A Compact signed should be a Compact that you, United 
States, and we, Marshall Islands, arrive here to sign up to. We 
are committed as we have been, and we will continue to commit 
ourselves.
    Thank you.

    [The prepared statement of Mr. Kedi follows:]
Prepared Statement of the Hon. Kenneth A. Kedi, Speaker of the Nitijela 
        (Parliament) and Member, Compact Negotiations Committee,
      appearing on behalf of the President of the Republic of the
                            Marshall Islands
    Madame Chair, Mister Co-Chair, and Distinguished Members, thank you 
for giving the Marshall Islands (RMI) the opportunity to explain its 
position on the U.S. Executive branch's proposed Compact of Free 
Association Amendments Act of 2023. I appear on behalf of His 
Excellency David Kabua, President of the RMI. With me are our new 
Minister of Foreign Affairs and Trade, the Honorable Jack Ading, and 
our new Chief Compact Negotiator, the Honorable Phillip Muller.
    First, let us make clear that the RMI regards the free association 
relationship with the U.S. as beneficial to both of our nations and not 
only wants to continue the relationship; we want to strengthen it. It 
is closer than the U.S. has with any other nations, other than the two 
other states with which it is freely associated.
    Strengthening even the closest of relationships, however, sometimes 
requires difficult conversations. It always requires a willingness to 
seriously consider the perspective of one's partner.
    Second, there should be no doubt that we appreciate the efforts of 
the U.S. Administration to work with us to negotiate a renewed Compact 
of Free Association.
    Many issues were favorably addressed, under the signed Memorandum 
of Understanding (MOU) of January 11th 2023. A tremendous amount has 
been accomplished. We are grateful for the support and all of the 
financial and programmatic assistance that has been agreed to so far. 
But, while many matters have been resolved, but not all have been, 
including the Nuclear legacy's adjudicated awards.
    Six plus months ago, the RMI was presented with a dilemma: The 
negotiations had progressed to provide some benefits, but not all of 
the requests that the RMI had made were adequately addressed. At the 
same time, the RMI faced a deadline for inclusion of the funding in 
President's Budget for the coming fiscal year.
    The Memorandum of Understanding was signed without the consent of 
the President's Compact Negotiations Committee. The Government of the 
Marshall Islands was not satisfied with the MOU, including majority of 
the member of the Parliament.
    This has led to a recent change in the Cabinet--a very unusual move 
so close to an election, which is in November--and our Chief Negotiator 
was replaced.
    Since the MOU was signed, the Marshall Islands has repeatedly 
requested the Administration to further negotiate the MOU and amend it 
because of the complexity of the issues but has received unfavorable 
responses.
    So, we are now coming to the U.S. Congress to request that the U.S. 
Legislative body direct the Administration to resume the negotiations.
    Let me now turn to the major outstanding issue. Our President, His 
Excellency David Kabua, had said from the beginning that any new 
Compact would have to include a ``dignified'' solution for the 
Marshallese people, and I, wholeheartedly support that. This concerns 
claims arising from the nuclear weapons testing program, including its 
waste disposal, that the U.S. conducted while it administered the 
Marshall Islands as a trustee for the United Nations with full powers 
of government.
    It is important that I explain the issue and, then, outline what a 
dignified solution would be from the Marshallese perspective.
    Americans are an exceedingly decent and generous people. I am 
certain that most would be shocked and embarrassed if they were to 
learn about the history and legacy of the nuclear testing program while 
we were governed by the U.S.
    In 1947, the United Nations appointed the U.S. as trustee for the 
Marshall Islands and other Pacific islands taken in World War II. It 
gave the U.S. the responsibility to protect us and promote our well-
being.
    Later in 1947, the U.N. Security Council was concerned about the 
people of Enewetak Atoll who were to be removed from their home islands 
for nuclear bomb tests. It was told by President Truman that, ``The 
Enewetakese will be accorded all rights which are the normal 
constitutional rights of the citizens under the Constitution but will 
be dealt with as wards of the United States for whom this country has 
special responsibilities.''
    This was a promise that was never kept, as the people of Enewetak 
languished in impoverished exile for 33 years in the previously 
uninhabited atoll of Ujelang, the most remote atoll in the Marshall 
Islands. It was an abuse of America's role as trustee to pressure us to 
allow our homeland to be desecrated by massive nuclear explosions for 
12 years, exposing us to deadly, horrific health and environmental 
hazards that we were never warned about--and that continue to affect us 
to this day.
    The nuclear detonations in the Marshall Islands had an explosive 
yield equivalent to roughly 1.7 Hiroshima-sized bombs per day over the 
entire 12 years of testing. In terms of radioactive iodine alone, 6.3 
billion curies of iodine-131 were released during the U.S. nuclear 
testing program--42 times greater than in all of the atmospheric 
testing in Nevada, 150 times greater than released by the Chernobyl 
breach, and 8,500 times greater than released from Atomic Energy 
Commission operations at Hanford, Washington.
    Preparing for a 1954 test at Bikini Atoll--one that would result in 
the largest U.S. nuclear detonation ever--U.S. military officials 
learned that a change in wind patterns threatened to bring fallout to 
inhabited Rongelap and Utrik atolls, including others that had not been 
evacuated. They went ahead with the test anyway without warning the 
islanders, who were blanketed in radioactive fallout and had no idea 
what it was or that it was dangerous.
    Almost 70 percent of the children on Rongelap Atoll who were under 
10 years old at the time of the blast eventually developed thyroid 
tumors. And many women from several atolls, Rongelap and Utrik for 
example, later gave birth to babies who resembled jellyfish and peeled 
grapes, incidents similar to mothers in Utah who were downwind from the 
Nevada test site. Some died at birth or after a few hours of life. Many 
other women had miscarriages.
    Rongelap and Utrik were evacuated after the test, but two years 
later it was still ``by far the most contaminated place on Earth,'' 
referring to Rongelap Atoll, according to Merrill Eisenbud, Director of 
the U.S. Atomic Energy Agency's Health and Safety Laboratory Eisenbud 
nonetheless suggested sending the people back home so they could be 
used as human guinea pigs. ``It will be very interesting to get a 
measure of human uptake when people live in a contaminated 
environment,'' he wrote. ``While it is true that these people do not 
live the way Westerners do, civilized people, it is nevertheless also 
true that these people are more like us than the mice.'' I am sad to 
say that the legacy of nuclear testing in the Marshall Islands is 
clearly one of racism as well as human and environmental destruction.
    The people of Rongelap, Utrik and others from the Marshall Islands, 
did indeed become human guinea pigs under the secret radiation studies 
of their bodies, code named ``Project 4.1.'' And these studies were 
done without their consent or knowledge.
    The people of Bikini, Enewetak, Rongelap and Utrik were forced to 
leave their islands. And were exiled from their atolls and eventually 
returned home based on U.S. assurances that it was safe--only to find 
out years later that radiation levels were too high, and no local food 
could be consumed. Some of the Bikini islands were completely 
vaporized. Many others remain unsafe for human habitation today--and 
will be for as long as anyone can imagine. Today people of Bikini and 
Rongelap cannot return to their atolls due to high radiation 
contamination on their land, food, and environment.
    The damage to our environment and our health caused by the U.S. 
nuclear testing program are not just a part of our history: They 
continue to plague us even today.
    For example, the people of Enewetak have lived in the shadow of a 
massive nuclear waste dump for over four decades. That waste dump, 
known as Runit Dome, contains 110,000 cubic yards of radioactive waste 
gathered from around the atoll decades after the nuclear weapons tests. 
The waste includes tons of plutonium-239 with a radioactive half-life 
of 24,100 years. The U.S. Department of Energy admits that radioactive 
material is leaking from Runit Dome into Enewetak's lagoon, but we were 
told not to worry because the radioactive material already in the 
lagoon dwarfs the amount of radioactive material buried under Runit 
Dome. We need the U.S. to tell us: What are the health risks of living 
on the shores of a lagoon with a larger amount of radioactive material 
than the infamous Runit Dome nuclear waste dump?

    After consulting with military veterans and civilians who 
participated in the radiological cleanup of Enewetak Atoll, we have 
recently learned of several troubling facts, including the following:

  1.  Some of the highly radioactive waste that was supposed to have 
            been buried under Runit Dome was actually dumped into the 
            lagoon.

  2.  One of the lagoon dump sites was just offshore from the island 
            where the people have since resettled.

  3.  After Runit Dome was sealed, additional radioactive material was 
            buried in concrete crypts that the Department of Energy 
            appears to have been unaware of and is unable to vouch for 
            their safety.

  4.  Over 300 pounds of highly toxic beryllium was buried on Enjebi 
            Island in soil that may have been dug up later and dumped 
            into the lagoon.

  5.  Over 130 tons of presumably contaminated soil was imported from 
            the Nevada nuclear test site to Enewetak and spread on the 
            land there.

  6.  Enewetak was used as a base for tests of chemical and biological 
            warfare agents.

    Have any of these hazards affected the health of Enewetak 
residents, and do any of them pose threats that persist today? The 
Marshall Islands does not have the capacity to answer these questions. 
The U.S. must answer these questions.
    Several scientific reports that have come out over the years 
greatly concern our people. A peer reviewed report published in Social 
Medicine in 2014 by two medical doctors, Seiji Yamada and Matthew 
Akiyama, found that U.S. Government scientists had grossly 
underestimated excess cancer rates in the Marshall Islands due to the 
nuclear tests. The doctors' report also cited research that found that 
congenital anomalies, stillbirths, and miscarriages in the Marshall 
Islands increased after 1952, when the first U.S. nuclear test in the 
megaton range occurred, and that there was a strong correlation between 
the number of such events and the distance of residence from the 
nuclear test sites.
    Also, a study was published by Columbia University scientists in 
2022 in the Journal of Radiation Research and Applied Sciences that 
found that there are still higher-than-anticipated concentrations of 
strontium-90, a radioactive isotope that causes cancer and bone 
disease, in both Enewetak and Bikini Atolls.
    The U.S. has not come close to properly compensating the 
Marshallese people for the damage caused by the U.S. nuclear testing 
program.
    The Compact of Free Association, through its agreement under 
Section 177, in Article IV established a Nuclear Claims Tribunal to 
adjudicate and pay substantiated and warranted claims. But the Tribunal 
was only able to pay a small fraction of the damages it awarded before 
it ran out of funds. In current dollars, the total amount of unpaid 
damage awards issued by the tribunal is more than $3 billion.\1\
---------------------------------------------------------------------------
    \1\ Present value of unpaid property awards = $3,134,200,000
    Present value of unpaid personal injury awards = $31,199,000
    Present value of all unpaid awards = $3,165,399,000
    The amount of unpaid personal injury awards is $23,131,552. The 
Tribunal awarded $96,658,250 and made payments totaling $73,536,698. 
Cumulative payment levels ranged from 5% for awards made from November 
2005 forward to 96% for awards made prior to October 1996. The Tribunal 
suspended payments in January 2009 due to lack of funds. (Source: 
Tribunal Annual Report to the Nitijela for the Calendar Years 2009) and 
Present value = $31,199,000 calculated using average annual inflation 
rate of 2.02%
---------------------------------------------------------------------------
    Former U.S. Attorney General Dick Thornburgh, reviewed the 
proceedings and procedures of the Nuclear Claims Tribunal in great 
detail, found that they were proper, and concluded that the amount 
provided by the U.S. for the claims was ``manifestly inadequate.'' The 
Tribunal is just as much a part of the 177 Agreement in Article IV as 
the provisions stating that it is a ``full'' settlement in Article X. 
It is a ``full'' settlement--insofar as it is ``just and adequate'' The 
clear intent of the Compact is that full settlement is based on just 
and adequate compensation. One provision cannot be independent of the 
other. Finality of the ``Espousal'' clause (Article X) will be ensued 
when ``Changed Circumstances'' (Article IX) addresses the ``just and 
adequate'' compensation.
    Although radiation in the Marshall Islands is 42 times higher than 
in the areas of the Nevada testing site, victims of the Nevada testing 
are compensated as they should be under the subsequently enacted U.S. 
Radiation Exposure Compensation Act--while most Marshallese victims 
have not received proper compensation and new claims are entirely 
unfunded. There are still some unpaid awards for personal injuries, and 
the awards for damage to property--really a taking of the property--are 
mostly unpaid, less than 1% of the property damages have been paid up 
to date.
    The ``full settlement'' of nuclear claims agreed to by the 
Marshallese and the U.S. in 1986 was the result of a lopsided 
negotiation between a superpower and an impoverished island community. 
Besides holding an overwhelming advantage in bargaining power, the U.S. 
was the only party capable of assessing the risks that were being 
allocated from its own nuclear program. The U.S. clearly took advantage 
of this imbalance in power and information at a time when it was acting 
as the Marshall Islands' trustee and held a fiduciary responsibility, 
supposedly our protector and the guardian of our welfare.
    The settlement for the Marshallese, many of whom are still exiled 
from their home islands nearly three-quarters of a century after the 
nuclear testing program began, is a tiny fraction of the billions of 
dollars that have been paid to compensate Americans living downwind--
some several hundred miles downwind--of the Nevada Test Site. This 
disparity shows that the U.S. has fallen far short of the ideal of 
equity in our case.
    Recognizing the uncertain state of knowledge about the nuclear 
testing's full effects, the Compact's congressional supporters 
specifically envisioned the provision of additional compensation when 
scientific advances showed the need, demonstrating a focus on the 
adequacy of settlement rather than its finality. During the debate over 
the original Compact, a number of members of the Senate raised the 
question of fairness of the subsidiary agreement under Section 177. 
Senator Alan Cranston elaborated on these doubts: ``These provisions, 
which establish a $150 million trust fund from which all claims are to 
be paid--an amount which may not be adequate--deny to 5,000 
Marshallese, who have already filed claims, their day in court.

        Senator James McClure, then Ranking Member of the Energy and 
        Natural Resources, responded to these concerns directly:

        As you . . . know Article IX of the subsidiary contains a 
        changed circumstances clause which would allow the Marshallese 
        to ask Congress for relief if circumstances develop which could 
        not have been foreseen, such as newly identified claimants.

         . . . As you indicated, there is a continuing moral and 
        humanitarian obligation on the part of the United States to 
        compensate any victims--past, present, or future--of the 
        nuclear testing program. For this reason, I fully expect that 
        if any new claims develop, Congress should and will provide any 
        assistance required, absent compelling contradictory evidence.

    One of the senators who had raised the initial concerns, Senator 
Howard Metzenbaum, responded by noting ``the record is clear if the 
need for further assistance arises, nothing in the Compact will 
discourage the Marshallese from seeking additional money and that the 
Senate shall give a sympathetic hearing to these appeals.'' Senator 
McClure remarked that ``there is an enormous burden to state 
affirmatively that, if future valid claims develop, we will do 
everything possible to compensate adequately all newly identified 
victims.''
    The ``full settlement'' includes a supposed remedies in the event 
that the settlement proves to be manifestly inadequate. One is a 
``changed circumstances petition'' under Article IX of the 177 
Agreement. It states that the Marshall Islands can submit to the U.S. 
Congress for claims that (a) arise or are discovered after the 1986 
effective date of the settlement and (b) could not reasonably have been 
identified as of that date.
    The remedy, however, is illusory: it is merely a right to ask 
Congress for additional compensation, with no obligation by the U.S. to 
respond. The Marshall Islands already had the right. By restricting the 
circumstances under which the Marshall Islands can even ask Congress 
for additional compensation, the changed circumstances ``remedy'' 
actually takes away rights that the Marshall Islands previously had. 
And the so-called remedy of changed circumstances does not apply in 
cases where the claims reasonably could have been identified in 1986 
even if they weren't, or in cases where the claims were known but their 
value was grossly underestimated (as occurred here).

    The amount of unpaid property awards is as follows:

    Enewetak: 2000 award of $385,894,500, less payments of 
$1,647,482.65 = $384,247,017
    Present value--$587,751,000, calculated using an average inflation 
rate of 2.15%

    Bikini: 2001 award of $561,035,321 less payments of $2,279,179.83 = 
561,036,320.17
    Present value--$834,582,000 calculated using an annual inflation 
rate of 2.12%

    Utrik: 2006 award of $307,356,398.91 with no payments.
    Present value--$401,592,000 calculated using an annual inflation 
rate of 1.93%

    Rongelap: 2007 award of $1,031,468,700 (including April 2008 
amendment adding $237,500) with no payments
    Present Value--$1,310,275,000 calculated using an annual inflation 
rate of 1.86%

    So, as between the superpower and the poor island community, it was 
the poor island community, with an extremely limited pool of expertise 
that was saddled with the risk that valid claims would be missed or 
underestimated. The U.S. was obviously in an enormously superior 
position to evaluate the risks arising from its own nuclear program. It 
was unconscionable to palm those risks off on the unsuspecting 
Marshallese.

    We are both faced with this unresolved issue so many years later 
because of what occurred when the Compact was amended 20 years ago. 
Then, like now, the RMI said that the nuclear issue had to be 
addressed. The State Department Negotiator assured that it would be if 
the RMI submitted a Changed Circumstances Petition. After agreement was 
reached on the Compact Amendments, however, and the RMI submitted the 
Changed Circumstances Petition, the State Department dismissed it. The 
Congress, which was responsible for addressing the CCP, never did. I 
have already noted some changed circumstances. Here are a few others: 
Since the 177 Agreement was negotiated, we have learned that--

     There was significant fallout on at least 10 atolls.

     People of Rongelap and Utrik Atolls were used as guinea 
            pigs in Project 4.1. The Project 4.1 The Study of Response 
            of Human Beings Exposed to Significant Beta & Gamma 
            Radiation Due to Fallout from High Yield Weapons by the 
            U.S. Government.

     Radiation levels in the Marshall Islands are higher than 
            what would be acceptable for human habitation in the U.S.

     Cancers increased substantially--the U.S. National Cancer 
            Institute estimated 500 excess cancers.

     Grandchildren born on atolls other than the four 
            recognized by the U.S. as having been adversely impacted by 
            nuclear weapons detonations and waste have been born with 
            defects--such as no limbs.

    Another supposed remedy in the alleged full settlement embodied in 
the 177 Agreement is in its Article XIII. It commits the U.S. to engage 
in consultations with the RMI on matters covered by the Agreement if 
the RMI requests consultations. U.S. State Department officials have 
refused to do so, saying that there was a full and final settlement 
when consultations, like a Changed Circumstances Petition is a part of 
that settlement.

    We also know a tremendous amount more related to poisonous remains 
of U.S. weapons testing at Enewetak:

     The rising sea is causing radioactive waste to leak into 
            the lagoon and the Pacific because cost cutting built the 
            concrete dome over a bomb crater with a sand base.

     A Lawrence Livermore Laboratory scientist told the RMI 
            that 99% of the deadly plutonium is not under the dome.

    And with all of this, the U.S. State Department says that the 
Government of the Marshall Islands is responsible for the deficient 
dome.
    The U.S. Government sent a group to Majuro consisting of 
representatives from the State and Interior Departments in October 
2019, in what was characterized as a ``listening tour'' in order to 
better understand the priorities and needs of the Marshallese people 
and our government as both governments prepared for these negotiations. 
What they heard was a resounding and unequivocal demand for nuclear 
justice and to address the unresolved issues from the U.S. nuclear 
testing program in the Marshall Islands that had been neglected for so 
long. I made it clear that nuclear injustice must be addressed this 
time around.
    And that is still the primary issue for our people today, and why 
we are unable to wholeheartedly concur with the MOU as a complete 
resolution of major issues confronting our people and nation.
    The MOU favorably responds to many of our concerns with increased 
economic assistance and reasonable assurance that U.S. economic 
assistance will not erode as along as the U.S. enjoys security and 
defense rights granted to it in the Compact. For example, the 
additional provision of veterans' benefits made applicable to citizens 
of the freely associated states who served in the United States 
military and have chosen to return our islands is also most welcome. We 
request, however, that the legislation incorporate the provisions of S. 
1913, which provides for other veterans' benefits. There is much in the 
MOU and proposed Compact legislation that we fervently support.

    So, what would a ``dignified'' settlement of nuclear claims look 
like? We believe that any settlement of nuclear claims would have to be 
guided by the following principles:

  1.  Damages that have been or can be proven should be fully 
            compensated. This can be accomplished by a larger 
            contribution to the Compact Trust Fund.
  2.  The contribution can also cover the costs of adjudicating claims 
            that the Tribunal did not process because of a lack of 
            funds and damages in the cases of atolls other than the 
            four that the U.S. has acknowledged were adversely 
            impacted, the ``Midrange Atolls.''

  3.  Marshallese victims of the nuclear testing program should receive 
            the same level of compensation and remedial action from the 
            U.S. Government that American victims have received or are 
            entitled to receive.

  4.  The risk of what is currently known and unknown should be borne 
            by the party that caused the damage, not the party upon 
            which the damage was inflicted.

    We also respectfully suggest the following.

     The legislation should direct the U.S. Executive branch to 
            provide the Congress with substantive points seriously and 
            fully addressing every claim that the RMI may make in a 
            Changed Circumstances Petition.

     The legislation should also direct the U.S. Executive 
            branch to report if the RMI requests consultations under 
            the 177 Agreement's Article XIII, then report regularly on 
            the status of the consultations, and, finally, on the 
            conclusion of the consultations.

     The legislation should continue the authorization for ex 
            gratia assistance to the Four Atolls that the U.S. 
            recognizes were adversely affected by the nuclear testing 
            and waste continued in both the laws approving the Compact 
            and the Amended Compact.

    With regard to other issues:

    The U.S. has been able to precision-target its missiles from 
thousands of miles away because of the testing done at our Kwajalein 
Atoll, facilities described by the U.S. Joint Chiefs of Staff as ``the 
world's premiere range for testing intercontinental ballistic 
missiles'' and, now, space operations support.
    To enable these tests, the people of Lib Island, about 30 nautical 
miles from Kwajalein, were forcibly displaced from their island. When 
they were allowed to return, they found their homeland irrevocably 
altered. Until now Lib Islanders experience intergenerational impacts 
of displacement and unknown levels of contamination. A recent request 
for all pertinent documents regarding Lib was denied in full, citing 
classified status.
    Senators, Lib Islanders deserve access to all information related 
to their island in order to make informed decisions for their homeland 
and community, and Lib Islanders deserve fair and just compensation for 
their role in the ``success'' of your missile testing program. The 
annual financial assistance that the MOU would provide would be 
adjusted 2 percent a year for inflation. We hope that U.S. inflation 
can be brought down to 2 percent, but the assistance should be adjusted 
for actual inflation, as in the case of many U.S. programs with 
inflation adjustments.
    The rising sea is an existential threat to the RMI, which has no 
elevation higher than two meters. It is also a national security issue 
for the U.S. because the most critical national security benefit that 
we provide--letting the U.S. deny access to forces of other nations to 
an area the size of Alaska, California, and Florida combined in the 
ocean and the air as well as on land--is based on our Exclusive 
Economic Zone.
    We would also ask consideration of improved trade provisions, 
especially with respect to tuna products sourced in the Marshall 
Islands to encourage U.S. investment.
    Finally, I want to note that our government is deeply concerned 
about revelations regarding the Bikini Resettlement Fund--which is 
totally unrelated to the Compact Trust Fund and other Compact funds. 
Our Government was not consulted. It was a decision by the U.S. 
Department of the Interior. We did not support the ``rescript'' under 
which the Interior Department gave up its role in ensuring proper 
spending. We are as interested as you in learning the facts of the 
situation.
    We are acting in the interim. President Kabua is working to name a 
receiver for the Fund.
    We are also establishing development authorities for each of the 
Four Atolls for which trust funds were established with U.S. grants. 
The authorities will be governed by boards that include the RMI's 
career civil servant Chief Secretary and members appointed by the 
president of the RMI. The development authority laws as adopted by the 
Parliament, requires that the development authorities report to the 
together to the Cabinet and Parliament annually.
    Regarding the proposals that the U.S. has made, we are particularly 
pleased to see the continuation of essential U.S. programs in the draft 
Compact Amendments Act, the extension of additional programs, and the 
restoration of U.S. programs that were available to our citizens 
residing in the United States prior to 1996. We further request that 
our citizens living in the United States be accorded the same rights 
and eligibility status to all the federal programs just as the U.S. 
citizens.
    We do not want to hold up this important legislation for the 
Marshall Islands, but we will need some additional measures to allow 
our people and parliament to move forward and fully support our 
efforts.
    During this period of concluding the negotiations, which we want to 
be as expeditious as possible, we request that the Marshall Islands be 
granted financial and programs assistance at the current levels. It is 
crucial that there be a smooth economic transition from the second 
Compact funding period to the third, without economic harm.
    Madame Chair, As a part of my statement, I am attaching a letter 
from the Pacific Islands Forum on addressing issues regarding the 
legacy of U.S. nuclear bomb testing and waste disposal dated just eight 
days ago.
    Additionally, I want to note a recommendation from the 2008-2009 
Report of the Cancer Panel of the President of the United States, 
published by the U.S. Department of Health and Human Services, National 
Cancer Institute. It recommends to the Congress and the President of 
the United States: ``The U.S. Government should honor and make payments 
according to the judgment of the Marshall Islands Tribunal.'' Further, 
the United Nation's Human Rights Council on September 3, 2012. Report 
of the Special Rapporteur on the implications for human rights of the 
environmentally sound management and disposal of hazardous substances 
and wastes (Marshall Islands Mission): ``The nuclear testing resulted 
in both immediate and continuing effects of the human rights of the 
Marshallese''

    Calin Georgescu, the Special Rapporteur made the following 
recommendations for the Government and relevant State actors of the 
United States of America;

  1.  Continue to provide the Marshall Islands with assistance 
            (financial, technical, and otherwise) in order assist it to 
            develop its health infrastructure and capacity further and 
            to reduce the need for off-island referrals . . .''

  2.  Consider adopting a presumptive approach to groups currently 
            excluded from the special programmes of the United States 
            of America created to assist survivors of nuclear testing, 
            whereby individual exposed to nuclear fallout would be 
            presumed to be eligible.''

  3.  Consider issuing a presidential acknowledgment and apology to 
            victims, in accordance with the conclusion of the Advisory 
            Committee on Human Radiation Experiments that the one of 
            the greatest forms of harm from past experiments and 
            intentional releases may be the legacy of distrust they 
            created, and that, in such instances, the Government of the 
            United States should deliver a personal and individualized 
            apology.''

  4.  Guarantee the right to effective remedy for the Marshallese 
            people, including by providing full funding for the Nuclear 
            Claims Tribunal to award adequate compensation for the past 
            and future claims, and exploring other forms of reparation, 
            where appropriate, such as restitution, rehabilitation and 
            measures of satisfaction (for example public apologies, 
            public memorials and guarantees of non-reparation); and 
            consider the establishment of a truth and reconciliation 
            mechanism or similar alternative justice mechanisms.''

    Finally, I am submitting with my statement the proposal that the 
Marshall Islands made to the U.S. negotiator July 1, 2022, which 
includes some of our requests that were not addressed and which we hope 
that you will consider.
    Americans are a great and good people. But every rule has an 
exception. The U.S. nuclear testing program in the Marshall Islands is 
one episode in your history where you have fallen short of our ideals.
    It is not, however, too late to come to a fair and just resolution 
to this issue. The people of the Marshall Islands have sacrificed a 
great deal, wittingly or not, to help you win the Cold War and protect 
your freedom. We hope that you will not take our sacrifices for 
granted.
    Thank you.

                                 ______
                                 
 Questions Submitted for the Record to the Hon. Kenneth Kedi, Speaker, 
         The Parliament of the Republic of the Marshall Islands

The Honorable Kenneth Kedi did not submit responses to the Committee by 
the appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman
    Question 1. The Biden administration's proposal includes provisions 
to continue support for mutually agreed institutional capacity through 
assistance and cooperation between the judicial branches of our 
respective government. Given the importance of independent judiciaries 
and rule of law in preserving democracy and individual liberties, can 
you please describe your assessment of the value of the Judicial 
Training program? In light of the press reports and government actions 
in the region relating to, and in some cases confirming, criminal 
malign and corrupt PRC political warfare aggression, are your 
government prosecutors and law enforcement agencies prepared and do you 
have the capacity to investigate, prosecute criminal acts of 
corruption?

                                 ______
                                 

    Mrs. Radewagen. I thank the witness for their testimony.
    The Chair now recognizes Mr. Falcam for 5 minutes.

  STATEMENT OF LEO A. FALCAM, JR., CHIEF COMPACT NEGOTIATOR, 
                 FEDERATED STATES OF MICRONESIA

    Mr. Falcam. Good morning and thank you, Madam Chair 
Radewagen, Co-Chair Sablan, Chairman Westerman, Ranking Member 
Grijalva, and members of the House Natural Resources Indo-
Pacific Task Force.
    We thank you for convening this hearing and for the 
opportunity to testify before you today. I am pleased to extend 
greetings from President Simina and the people of the FSM.
    I am privileged today to appear in the company of President 
Whipps of Palau and of Speaker Kedi of the Marshall Islands. 
The FSM government strongly supports timely and favorable 
resolution of each of our three nations respective Compact 
agreements with the United States.
    I am pleased to announce that yesterday the FSM National 
Congress adopted a resolution approving and ratifying the 2023 
Compact Agreement.
    The United States and the FSM enjoy an extraordinarily 
close relationship that continues to deepen through our broad 
economic, diplomatic, and military partnership and the 
steadfast support of the United States for the FSM's economic 
development and self-sufficiency.
    Our governments are committed to building a safe, peaceful, 
and democratic Indo-Pacific region. The FSM has no greater 
friend than the United States.
    Our deep bonds are reflected in our decades of close 
cooperation dating back to shortly after World War II and 
continuing when the FSM became a sovereign nation in 1986.
    The ties between our peoples are also reflected in the fact 
that FSM citizens, as has been mentioned, have proudly served 
in the U.S. military for many decades and at very high rates.
    Thousands of FSM citizens continue to proudly live, work, 
and study in the United States, contributing economically and 
culturally as members of their communities across many of your 
home states. We are most grateful for this privilege.
    When the FSM achieved independence in 1986, we entered into 
our first Compact of Free Association with the United States. 
The 1986 COFA was renewed and amended in 2003. Congress 
approved both prior COFA agreements with resounding bipartisan 
support, and we are pleased that this support has not only 
endured but has strengthened in the current Congress.
    Since the first Compact entered into force, the FSM has 
continuously granted the United States security and defense 
rights in our territory, which represent a very large and vast 
section of the Pacific Ocean, of utmost strategic importance to 
both the United States and the Federated States of Micronesia.
    This includes the right of the U.S. military to operate in 
the FSM and to deny foreign militaries access to the use of 
FSM's territory. This defense partnership is vital to securing 
and maintaining peace and prosperity in the Pacific.
    Our defense ties remain strong and ongoing. In addition to 
the broad rights of strategic denial in our extensive waters 
and airspace, our U.S. Embassy in the FSM includes a U.S. 
military attache who is in constant communication and 
coordination with our government.
    As the U.S. military knows well, the FSM is prepared to do 
even more on military issues. While these crucial defense 
commitments do not expire, the Compacts economic assistance 
provisions will expire in less than 3 months unless extended by 
the Congress.
    I am pleased that the FSM and the United States, under the 
Trump and Biden administrations, diligently developed a 
framework for a new 20-year period of assistance.
    We are grateful to Ambassador Yun and our counterpart U.S. 
Negotiating Team for the productive and very beneficial 
collaboration.
    The package is designed to address the needs of our 
government and our people as we advance toward increased self-
sufficiency and maturity as a nation.
    The Compact's pledge of $140 million a year in sector 
grants and $500 million in additional contributions to the 
Compact Trust Fund are essential to enhancing and advancing our 
government's mutual goals.
    We are extremely pleased that the proposed legislation will 
ensure that FSM citizens living lawfully in the United States 
are again eligible for key public benefits as a result of the 
Bipartisan Compact Impact Fairness Act, and we appreciate the 
leadership of so many Members of Congress on this issue, 
including Representatives Case, Womack, Dakota, and Moylan.
    The proposed legislation also incorporates the Bipartisan 
Care for COFA Veterans Act, which will provide improvements to 
medical care access to our veterans, thanks to the leadership 
of Representatives Barra, Womack, Case, Tokuda and yourself, 
Madam Chair.
    This package will ensure the continued eligibility of FSM 
students for key educational benefits and access to crucial 
Federal programs and services. U.S. assistance will build on 
the advances made to date and enable the following important 
developments in the upcoming Compact assistance period: 
increasing educational opportunities for FSM children; teacher 
training; building and maintaining schools; upgrading the level 
of medical care in the FSM; increasing access to basic health 
care in remote sections of our country; protecting our 
environment; addressing climate change in our very vulnerable 
country; and developing and improving public infrastructure.
    At this stage in our development, more than half of key 
government services in the FSM are funded by the United States 
through the Compact. A funding lapse would create an 
unprecedented economic and political crisis for our country and 
would have a destabilizing effect.
    We appreciate the Committee's consideration of the Compact 
proposal and urge Congress to advance it before current 
provisions expire on September 30. I thank you again for the 
opportunity and I am prepared to answer any questions, Madam 
Chair.

    [The prepared statement of Mr. Falcam follows:]
    Prepared Statement of Leo Falcam, Jr., Chief Negotiator for the 
    Federated States of Micronesia in U.S.-FSM Compact Negotiations
    Chair Radewagen, Co-Chair Sablan, and Members of the House Natural 
Resources Indo-Pacific Task Force, thank you for convening this hearing 
and for the opportunity to testify before you today.
    My name is Leo Falcam, Jr. I am the Chief Negotiator for the 
Federated States of Micronesia (FSM) in the current Compact talks with 
the United States, a position I have held since July 2019. I also have 
had the privilege to serve as Chief of Staff to the last three FSM 
Presidents: Emanuel Mori, Peter Christian, and David Panuelo. Thank you 
for the opportunity to appear before you today--it is an honor to be in 
this position at this truly historic moment.
    The U.S. and the FSM enjoy an extraordinary close relationship that 
continues to deepen through our broad diplomatic, economic, and 
military partnership and the steadfast support of the United States for 
the FSM's economic development and self-sufficiency. Our governments 
are committed to building a safe, peaceful, and democratic Indo-Pacific 
region. The FSM has no greater friend in the world than the United 
States and we are grateful that the United States similarly respects 
and values the relationship it has with the FSM.
    Our deep bonds are reflected in our decades of close cooperation 
dating back to when the U.S. was designated by the United Nations to 
administer our region of the world after World War II. This arrangement 
continued for more than 40 years until the FSM became a sovereign 
nation in 1986. The ties between our peoples are also reflected in the 
fact that FSM citizens have proudly served in the U.S. military for 
many decades, and we volunteer to serve at per capita rates higher than 
most, if not all, U.S. states. Some of our citizens have made the 
ultimate sacrifice in the course of their service. Additionally, 
thousands of FSM citizens proudly live, work, and study in the U.S., 
contributing economically and culturally as members of their 
communities across the U.S., including many of your home states. We are 
most grateful for this rare privilege.
    As the FSM emerged as an independent nation in 1986, we 
simultaneously entered into an international agreement with the U.S. 
called the Compact of Free Association or ``COFA.'' The 1986 Compact of 
Free Association was renewed and amended with the 2003 Amended Compact 
of Free Association, which remains in effect today. Notably, Congress 
passed both prior COFA agreements with resounding bipartisan support. 
We are pleased and gratified that this bipartisan support has not only 
endured but strengthened in the current U.S. Congress.
    Both the 1986 Compact and the 2003 Amended Compact fulfilled 
important strategic objectives for both countries. Since the first 
Compact entered into force, the FSM has continuously granted the U.S. 
security and defense rights in the territory of the FSM, which 
represents a large section of the Pacific Ocean of utmost strategic 
importance to the U.S. This includes the right of the U.S. military to 
operate in the FSM, and to deny foreign militaries access to or use of 
the FSM's territory. This defense partnership is vital to securing and 
maintaining peace and prosperity in the Pacific.
    Our defense ties are strong and ongoing. The Micronesian region 
spans an area roughly as big as the continental United States. In 
addition to the broad rights of strategic denial in FSM waters, which 
constitute a very large part of the Western Pacific Ocean spanning over 
1.3 million square miles, the U.S. Embassy in the FSM includes a U.S. 
military attache in constant communication and coordination with our 
government. U.S. military personnel frequently visit and stay in the 
FSM. U.S. military Civil Action Teams historically lived and worked in 
the FSM in support of engineering and infrastructure initiatives on the 
islands. Most recently, the U.S. Department of Defense expressed an 
interest in using Yap State's airport and seaport facilities for U.S. 
military operations when needed. The U.S. is helping to fund 
improvements to Yap's international airport to ensure it is up to the 
task, and has undertaken improvements and projects throughout the FSM 
to facilitate capacity for U.S. military operations and humanitarian 
response. Separately, in September 2023 about 100 U.S. Marines will 
spread out across Yap, Chuuk, Pohnpei, & Kosrae for small scale 
construction, medical, communications, and community engagement 
projects.
    In addition, the U.S. and the FSM also signed in 2022 an expanded 
Shiprider Agreement to combat illicit maritime activity, widening the 
initial scope of partnership between the U.S. Coast Guard and the FSM 
maritime forces. Other elements of cooperation include trainings, port 
visits, shoreside engagements, and boarding of foreign vessels on the 
high seas. As the U.S. military knows well, the FSM is prepared to do 
even more in partnership with the U.S.
    While these defense cooperation and commitments are enduring and do 
not expire, we are at a crossroads on economic support by the United 
States. The crucial economic assistance commitments of the U.S. to our 
government and our people will expire in less than three months, on 
September 30, 2023, unless extended by Congress.
    In this connection, I am pleased to note that senior negotiating 
teams from the FSM and the U.S. under the Trump and Biden 
administrations have diligently been developing the framework for a new 
twenty-year period of assistance. The package that we have finalized 
this year has been specially designed to address the needs of our 
government and people as we advance toward increased economic self-
sufficiency and maturity as a nation. We are pleased that the U.S. has 
agreed to continue its significant economic support for an additional 
20-year period as we continue to grow our economy, build our 
institutions, and work toward a sustainable future for our people. The 
Compact's pledge of $140 million a year for the FSM in annual sector 
grants and $500 million in additional contributions to the Compact 
Trust Fund will be essential toward advancing our mutual goals.
    We are extremely pleased that the proposed legislation before the 
U.S. Congress will ensure that FSM citizens living lawfully in the U.S. 
are again eligible for key public benefits as a result of the 
bipartisan and bicameral Compact Impact Fairness Act. We appreciate the 
advocacy and leadership of so many Members of the Congress on this 
issue, including Representatives Ed Case (D-HI), Steve Womack (R-AR) 
and Jill Tokuda (D-HI). The proposed legislation also incorporates the 
bicameral and bipartisan Care for COFA Veterans Act, which will provide 
improvements to medical care access to veterans in the Freely 
Associated States, thanks to the leadership of Representatives Ami Bera 
(D-CA), Steve Womack (R-AR), Ed Case (D-HI), Jill Tokuda (D-HI), and 
Delegate Aumua Amata Coleman Radewagen (R-AS). This package will also 
ensure continuing eligibility for Pell Grants and other key education 
benefits for FSM students--critical elements that will strengthen the 
future of our country for generations to come.

    The majority of the assistance being offered by the U.S. are in 
seven sectors the two countries have identified together as essential 
to our growth and future self-sufficiency: education, health care, 
public infrastructure, environment, public sector capacity building, 
private sector development, and enhanced reporting and accountability. 
The new U.S. assistance will build on the advances made during the last 
37 years since our independence as a nation and will enable the 
following important developments in the upcoming Compact assistance 
period:

     Increasing educational opportunities for FSM children, 
            expanding teacher training, and helping us build and 
            maintain schools throughout the country;

     Upgrading the level of medical care provided in FSM 
            hospitals, reducing where possible the need for patients to 
            travel out of the FSM for treatment, and increasing access 
            to basic healthcare in more remote sections of the country. 
            It would also help build essential hospitals in two of our 
            four states;

     Protecting the FSM's land and marine environment and 
            achieve sustainable use of our natural resources. 
            Critically, this assistance will help us prepare for and 
            mitigate the increasing effects of climate change in our 
            many low-lying islands facing rising sea levels, warming of 
            ocean currents, and salinization of fresh water. Given our 
            vulnerable geography in the Pacific, we have to treat these 
            issues as a national security threat; and

     Developing public infrastructure, including improving 
            roads, ports, and bridges throughout the country, and 
            establishing safe and effective transportation and 
            communication linkages between the country's outer islands 
            and its main islands.

    These and other FSM needs across the seven sectors have been at the 
center of our discussions with the U.S. in the years leading up to the 
agreements that our two governments signed on May 23. At this stage in 
our development, roughly half of key government services in the four 
FSM states are funded by the U.S. through the Compact. A funding lapse 
at the end of September 2023 of these sector grants would create an 
unprecedented economic and political crisis for our country and our 
people, and would have a destabilizing effect on the region as a whole. 
The consequences for our Nation if U.S. health care, education, 
infrastructure and environmental protection sector support were to end 
or even be suspended would be catastrophic.
    In addition to essential sector grants continuing for the next 20 
years, we are very grateful for the U.S. commitment to strengthen our 
Compact Trust Fund with additional funding to bolster our long-term 
future, and for the U.S. commitment to continue to provide access to 
federal programs and services that we cannot provide on our own, such 
as air traffic control, weather services, disaster relief, and postal 
services. These are essential for our nation and our people. The U.S. 
and FSM have developed strong subsidiary agreements to ensure that the 
funds and services provided will be well managed and well spent.
    We appreciate the Committee's consideration of the Compact 
legislative proposal transmitted by the Administration and urge 
Congress to advance this critical proposal before current provisions 
expire on September 30.
    Thank you again for the opportunity to testify today. I would be 
pleased to answer any questions the Task Force might have.

                                 ______
                                 

Questions Submitted for the Record to Leo A. Falcam, Jr., Chief Compact 
      Negotiator, Government of the Federated States of Micronesia
            Questions Submitted by Representative Westerman
    Question 1. The Biden administration's proposal includes provisions 
to continue support for mutually agreed institutional capacity through 
assistance and cooperation between the judicial branches of our 
respective government. Given the importance of independent judiciaries 
and rule of law in preserving democracy and individual liberties, can 
you please describe your assessment of the value of the Judicial 
Training program? In light of the press reports and government actions 
in the region relating to, and in some cases confirming, criminal 
malign and corrupt PRC political warfare aggression, are your 
government prosecutors and law enforcement agencies prepared and do you 
have the capacity to investigate, prosecute criminal acts of 
corruption?

    Answer. The FSM appreciates the U.S. decision to seek funding for 
judicial training grants for the FSM. Judicial training grants over the 
last 20 years have been essential for the judicial officers of the FSM, 
at both the national and FSM State levels, to receive highly 
professional and effective training from U.S. authorities. This new 
funding will enable our judiciary to continue to participate in 
important training programs from the U.S. federal judiciary in key 
areas, such as training for larger caseloads, engaging in numerous 
emerging areas of law, and continuing to improve our advancements in 
the rule of law. This is essential capacity building for our judicial 
officers, and we are grateful for the U.S. support in helping us 
develop necessary expertise. We look forward to continuing to 
participate in this valuable program.
    Over the next 20 years, we will also look for opportunities for 
increased capacity building assistance for our prosecutors and 
investigators. We have received some assistance from the United Nations 
Office on Drugs and Crime (UNODC), but this assistance is not 
consistently funded; and the FSM must compete with all other countries 
in the region that are also receiving technical assistance from the 
UNODC. As a result, we are hoping for other opportunities for U.S. 
assistance in these additional areas. Some of this capacity building 
for prosecutors and investigators can be funded, for example, through 
U.S. public sector grant assistance in Section 261 of the 2023 Compact 
and others through technical assistance to FSM law enforcement as 
contemplated in Section 102(a) of the U.S. proposed implementing 
legislation. More generally, the FSM Government will welcome a 
continuing dialogue with U.S. authorities on additional capacity 
building for all aspects of our law enforcement infrastructure.
    Anti-corruption is one of our Government's highest priorities. Like 
the United States, we are parties to the UN Convention Against 
Corruption and the UN Transnational Organized Crime Convention, and 
have strong domestic anti-corruption laws in place. As noted above, we 
will benefit from continued capacity building for our judiciary, our 
prosecutors, and our investigators, to help us ensure that we can 
vigorously enforce the rule of law. The quality of our prosecution 
efforts will depend heavily on the level of expertise of all of our law 
enforcement and judicial personnel.

    Question 2. In your written testimony, you mention that the 
Department of Defense has an interest in using Yap State's airport and 
seaport facilities for needed U.S. military operations. From Micronesia 
's point-of-view, what benefits would this create? Have there been any 
updates regarding the status of implementing this?

    Answer. The FSM is pleased to see an increase in DOD's planned 
military construction projects in our territory in recent years, 
including some existing plans for joint use facilities. As the U.S. 
military knows, the FSM is prepared to do even more in pa1tnership with 
the U.S. Department of Defense, as contemplated in our Compact of Free 
Association. These activities and projects serve our critical mutual 
goals of security, stability, and peace in our region.
    The Department of Defense has informed the FSM that it wishes to 
increase the capacity of Yap State's airport and seaport facilities to 
ensure that those facilities are able to support U.S. military 
operations and training whenever needed, and the FSM is cooperating 
fully with that request. The U.S. is helping to fund improvements to 
Yap's international airport to ensure it is up to the task and has 
undertaken improvements and projects throughout the FSM to facilitate 
capacity for U.S. military exercises/operations and humanitarian 
assistance response. We are informed that MILCON funding has been 
identified for specified projects for the Yap airport, and that 
construction could possibly begin during FY '25, provided that ongoing 
environmental impact and land use requirements are completed. The 
increased capacity will have benefits both for the U.S. military and 
for the people of the FSM.
    In February 2023, INDOPACOM began surveys for airport designs, port 
and road environmental work, and airport and port master planning. 
Authorities from the FSM National Government and the Yap State are 
cooperating fully in these efforts.
    The improvements to Yap Port will increase logistical operational 
capacity for essential functions that benefit FSM, including disaster 
response and humanitarian assistance. The dredging will also allow for 
larger vessels to use the port. These military construction projects 
will improve the road and transportation access between the airport and 
the seaport.

                                 ______
                                 

    Mrs. Radewagen. I thank the witness for their testimony.
    The Chair will now recognize Members for 5 minutes for 
questions and I will begin with recognizing myself.
    Question for His Excellency Surangel Whipps, Jr., 
President, Republic of Palau. Under this legislative proposal, 
Palau would gain more autonomy over trust fund. Can you explain 
to us how Palau has historically managed its trust funds that 
would warrant this increased autonomy?
    Mr. Whipps. Madam Chair, I believe that we have actually 
always had autonomy on our trust fund, and we have managed it 
with a Trust Fund Advisory Board with qualified people that we 
set up through legislation and follows the best investment 
practices.
    The amount of money that is taken out every year is 
restricted based on the Compact to the $15 million. The new 
agreement allows for an increase, but it will not increase more 
than 4 percent of the entire trust fund.
    So, that is the main difference between our trust funds. 
Thank you for the question.
    Mrs. Radewagen. This question is for the Honorable Kenneth 
Kedi, Speaker, the Parliament of the Republic of the Marshall 
Islands. Should negotiations between the United States and RMI 
continue past the September 30 deadline, what is the view of 
your government on how the United States should approach Palau 
and FSM Compacts?
    Do you believe the United States should hold Palau and FSM 
Compacts until it completes negotiations with the RMI? And what 
mechanisms are in place to ensure that trust fund money is 
managed and used responsibly and in the manner for which they 
were intended?
    Mr. Kedi. Thank you, Honorable Madam Chair. The impasse 
right now with RMI's negotiation is the nuclear injustice. When 
I first met with Ambassador Yun in May, we both agreed that it 
is better that we conclude that deal sooner rather than later. 
And I went back and pushed for that.
    But as it stands with the MOU, Your Honor, and Members, it 
is unlikely that the Parliament will adopt it as is. And they 
have expressed that in the Parliament. So, we hope while we are 
here, we will modify it some.
    We have submitted and sent a letter to Ambassador Yun to 
address a couple of those issues. So, when we go back home, we 
will be able to convince the leadership back home that this is 
a better deal.
    In regards to ensuring management of the funds are in 
order, we adopted two legislations, development authorities, 
where they will safeguard the new funding that will be coming 
through the trust fund and then disburse onto the development 
authorities.
    And these development authorities are required by the new 
laws to report to both the Cabinet and--and then these 
financial reports will be verified with the other generals 
every year instead of waiting for 5 years, and then we get to 
see the report, it is required annually.
    So, this is a mechanism we already put in place to address 
the issue. We know the Bikini issue. It is a grave issue for 
all of us, both you and ourselves, government back home.
    Unfortunately, we play no role in any of it. It was the 
Department of the Interior that pretty much let go of their 
responsibility. So, this is why we are here. And we also look 
at what the leadership of Bikini did, and we are trying to 
address that as well at the same time.
    Mrs. Radewagen. Your testimony reads that your government 
is preparing for negotiations to continue past the September 30 
deadline. You have requested that Congress should continue 
current funding levels for RMI as negotiations continue.
    Can you confirm with us that the RMI negotiation team will 
prioritize concluding the negotiations before the September 30 
deadline?
    Mr. Kedi. The goal is to conclude all the negotiations. And 
we hope that after we leave here, we will be able to meet with 
you and the team again, hopefully in Hawaii or back at his home 
in Oregon, either way, to finalize these subsidiary agreements, 
that needs to be concluded.
    In terms of continuing resolution, we also request that in 
the event that that doesn't take place, because if it doesn't 
happen, it will cause a lot of economic hardship for us to 
especially tap into the current trust fund that we have that is 
already limited.
    So, we are looking forward to conclude the Compact 
negotiation in these few weeks. Otherwise, we are requesting 
the Congress to give us the extension continuing resolution to 
continue while we continue the negotiation. Thank you.
    Mrs. Radewagen. Thank you.
    I now recognize Co-Chairman Sablan for 5 minutes for 
questions.
    Mr. Sablan. Thank you, Madam Chair. And again, welcome. 
Really happy to see that there was agreement and then, of 
course, now we have the RMI's issues.
    Mr. President, you bring up the State Department re-
establishing the Office of Freely Associated States. Can you 
just a little bit more for the record, explain why you think 
this is important and how such an office should help Palau and 
the other Compact States.
    Mr. Whipps. Thank you, Chair. First of all, we have seen 
that with a lack of the office and the lack of the 
understanding within the State Department of the uniqueness of 
our relationship, there is an erosion of that relationship.
    So, it is important that, first of all, and I have been in 
meetings with members from the State Department where they 
classify Palau as just like Tonga or any other Pacific Island. 
And in those cases, I think it is very clear that we are not. 
You have strategic denial rights. You have those exclusive 
rights that don't exist in any other nation.
    And because of that, it is important that the State 
Department involves Interior and Defense in that agency so that 
they can have the full picture of the strategic relationship 
that we have, and they can be more focused on this relationship 
and don't let the momentum that we have built be eroded. Thank 
you.
    Mr. Sablan. Thank you, sir.
    Mr. Falcam, welcome. You seem quite pleased, of course, 
because that is the Micronesian way, right? On the results of 
the negotiated Compact, and also those are gentlemen's 
agreement, besides signing the gentleman agreement involved 
here.
    So, could you describe the current agreement you just 
signed, is it an improvement for the Federated States of 
Micronesia over the first two Compacts, or could you say not? 
Or yes?
    Mr. Falcam. Thank you very much, Congressman. And, yes, 
this current proposed funding level that we are very happy to 
have come to an agreement, with Ambassador Yun and our 
counterpart team, represents a needs-based economic assistance 
package for the FSM, one that we negotiated with the U.S. 
Government in good faith.
    We are happy with the results and we are encouraged by the 
package that sits before the Congress now, particularly, since 
it also contains language on veterans' benefits and it also 
contains the language on CIPA. So, yes, thank you.
    Mr. Sablan. We just need to also get these additional 
Federal services agreement and programs enacted.
    Mr. Speaker, can you share, I am sorry, this is not your 
job, really, but what do you see forward for Members of 
Congress who are very supportive, sir, of your concern, but do 
not see a way out.
    Let me rephrase my question. Besides additional 
compensation for the nuclear legacy of the United States in the 
Republic of the Marshall Islands, is the Marshall Islands 
government satisfied with the other sections of the Compact 
agreement?
    I think you said this earlier, but I just want to make 
sure.
    Mr. Kedi. Thank you, Co-Chair. Yes, in the written 
statement and also the brief verbal statement that I made, the 
MOU, it is a good document and we can make it better. The 
compensation issue, there are other ways to address it, as I 
also said in my verbal statement and also in the written 
statement, change circumstance is a way to address it. It is 
called for under the treaty.
    So, I think this is a way forward and we send a letter to 
Ambassador Yun trying to see if we can tweak some of that 
incorporating it to conclude a Compact while we are continuing 
to negotiate the change circumstance petition with the Congress 
as called for.
    Mr. Sablan. Yes. Thank you very much. My time is up, but 
really, all of you, thank you for today's hearing. It is really 
informative. I appreciate it. Thank you, Madam Chair, I yield 
back.
    Mr. Kedi. And to your question as to the other provision of 
the Compact, we thank you for your assistance.
    Mrs. Radewagen. I will now recognize Mr. Moylan for 5 
minutes for questions.
    Mr. Moylan. Thank you, Madam Chair. Your Excellency, 
President Whipps, Honorable Kedi, the Speaker, and Mr. Falcam. 
Thank you for your presence and your testimony today.
    Coming from Guam, as a Delegate from Guam, I feel the 
relationships between our islands are pretty strong. And I am 
sure we all have a lot of residents that are coming on over to 
Guam and going back and forth.
    So, the relationship is strong. We are bonded. And as a 
Member, in addition to this Committee, I am also a committee 
member on the House Armed Services Committee, and I understand 
the strong and strategic importance that the second island 
chain has for the defense of our nation and for our islands and 
for the security against the Communist Chinese Party.
    So, I am truly in favor of the negotiations and the COFA 
agreement to pass. I definitely want that. And I understand, 
just like Guam does and the Mariana Islands do as well, we are 
dedicated to the United States. We have our children; our sons 
and daughters are fighting for the United States as well and 
also for the freedom of our nations and the territory of Guam.
    I would just like to say, I truly appreciate and I hope as 
we continue on with these negotiations with the special 
Committee that we have here, with the leadership, that we wish 
to foresee the right thing done.
    And I do appreciate your participation and all that you 
have done thus far and all the history that we have in support 
of the United States of American diplomacy throughout the Indo-
Pacific areas. I just wish to say thank you very much. Thank 
you, Madam Chair.
    Mrs. Radewagen. I will now recognize Mr. Case for 5 minutes 
for questions.
    Mr. Case. Thank you, Madam Chair. Mr. President, Mr. 
Speaker, Mr. Chief Negotiator, thank you so much for being 
here. Long way from home, but your personal presence here is 
really appreciated.
    And thank you for your leadership in the world on so many 
issues. We have been great partners, and that is obviously 
going to continue. So, thank you for that.
    Thank you for my Hawaii, for our partnership. And we 
certainly welcome your residents, or your citizens rather, who 
are living with us and hopefully helping out back home as well.
    The last thing I want to do is get in the middle of a 
negotiation, right? So, I am not going to do that.
    But I want to go back to the Chair's question, because I 
think she asked a very direct question that I think is relevant 
here and it is something that we just have to make a call on. 
Of course, we want the conclusion of the negotiations between 
RMI and our country and hope and expect that, but the question 
that we have is how to proceed at this point.
    And I think her question was what are the pros and cons of 
proceeding with Palau and FSM if we cannot conclude 
negotiations expeditiously with the RMI? I think that probably 
none of us want that. We would love to proceed collectively. 
That is good for our country. That is good for each of you, I 
believe, individually and collectively.
    It is good for the Pacific to conclude and proceed 
collectively. Makes things easier from a congressional 
perspective, I think, but we have to contemplate that at least 
that the RMI negotiations may not be completed expeditiously on 
a very tight time frame.
    So, thoughts on that, Mr. President? I will just go right 
down the line.
    Mr. Whipps. Thank you, Congressman Case. First of all, it 
is critical for us for the Compact to be passed by September 
30. The COVID and pressure from China by reducing the number of 
tourists coming to Palau combined, have put us in a deep 
financial situation that without that assistance makes it very 
difficult for us to proceed.
    So, timely passing is the most critical thing and why we 
are here in Washington. We want it done by September 30. Thank 
you.
    Mr. Case. Thank you, Mr. Speaker?
    Mr. Kedi. Thank you, Congressman Case. And thank you for 
hosting our citizens in the beautiful city of Hawaii as well. 
Our aim has always been and remain to be to conclude this, 
along with our brothers and sisters.
    Rowing on the same boat back home gives strength to the 
community. We want that to be the case here, but because of the 
outstanding that we are still trying to deal with and trying to 
resolve for Marshall Islands, we have to wait till it resolves.
    So, we will go that route. But our aim is to remain with 
our brothers and sisters from Palau and FSM to conclude the 
same. I think we sent a letter to our Ambassador Yun in trying 
to resolve some of these issues, especially the personal 
injuries. People are dying. People have died without their full 
compensation. And you look at Nevada test site. All of them 
have been paid fully. Why can't that be accorded the same to 
the Marshall Islands?
    Mr. Case. I understand all of that, Mr. Speaker. I am just 
asking kind of directly. It would be very difficult for us to 
wait on your ohana if we have not concluded with you. And is 
that OK with you? Or do you think somehow, we should defer all 
of these?
    Mr. Kedi. RMI shouldn't be holding FSM and Palau in this 
regard. But I will repeat it. It is our goal and hope that we 
will be concluding the same after little more discussion with 
Ambassador Yun. Thank you.
    Mr. Case. OK. Mr. Falcam?
    Mr. Falcam. Thank you, Congressman. And thank you for being 
such great host in the state of Hawaii for our citizens as 
well.
    We, in the FSM, please, the primacy of the relationship 
between the FSM and indeed the rest of the FAS and the United 
States under these Compacts cannot be overstated. It is our 
most important strategic partnership that we have in the FSM in 
relations with other nations.
    The primary advantage to trying to ensure a timely passage 
of this proposal is simply consistency and an ability to 
continue moving our economies forward as best as we can.
    In addition to that, the veterans' benefits that we had 
discussed and that is already included in the language, is also 
of dire importance. Our veterans, this has been a gap in our 
veteran's access to benefits for a long time. So, our position 
is a timely movement of the proposal through your bodies. Thank 
you.
    Mr. Case. Thank you.
    Mrs. Radewagen. I thank the witnesses for their valuable 
testimony and the Members for their questions. The members of 
the Committee may have some additional questions for the 
witnesses, and we will ask you to respond to these in writing.
    Under Committee Rule 3, members of the Committee must 
submit questions to the Committee Clerk by 5 p.m. Friday, July 
21, 2023. The hearing record will be held open for 10 business 
days for these responses. If there is no further business, 
without objection, the Committee stands adjourned.

    [Whereupon, at 12:36 p.m., the Committee was adjourned.]

            [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

Submission for the Record by Representative Grijalva

                        Statement for the Record
                 COFA ALLIANCE NATIONAL NETWORK (CANN)

    Concerning the current negotiations between the United States and 
the Freely Associated States on the Amendments Act of the Compact of 
Free Association (COFA). The COFA Alliance National Network (CANN) non-
profit organization for COFA communities would like to submit a 
testimony for the U.S. Senate Committee on Energy and Natural Resource 
to consider seriously.
    The COFA Alliance National Network (CANN) was founded on January 1, 
2014 by community leaders advocating for economic and social justice to 
be consistent with the compact treaties. Presently, citizens of the 
three Compact of Free Association (COFA or ``the compact'') nations 
(also known as the Freely Associated States or FAS) who reside in the 
United States face significant and persistent inequities, due to 
systemic barriers and exclusions. A series of federal and state policy 
decisions have been made without full consideration of the unique COFA 
treaties. As a result, close to 100,000 people from the FAS in the US 
have faced historical denial and discrimination on a range of public 
and federal benefits including health care, welfare, employment and 
educational opportunities. Most recently, the disaster relief programs 
by FEMA during the COVID-19 Pandemic has highlighted these inequities. 
CANN found that it is important to provide more information about the 
historical relationship of the Compact agreement to policy makers to 
address these injustices at the state and federal levels.
    The headquarters for CANN is based in the State of Oregon where it 
began organizing with COFA communities and policy makers to change the 
status quo. Oregon's capital, Salem became a ``home away from home'' 
for many COFA residents from the Marshall Islands, accounting for over 
3,000 people and representing the 2nd largest minority population in 
the city. In 2013, after learning about the mistreatment that the 
Marshallese were receiving caused by the REAL ID Act of 2005, community 
leaders decided that action was needed locally and nationally. First to 
be addressed was correcting the extreme difficulties that the issuance 
of a one-year driver's license was creating for the people from the 
FAS. While the driver's license issue was the spark that laid the 
foundation of CANN, it was only one of a constellation of other 
injustices emanating from the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 which discriminated against the 
FAS communities. It actually denied them access to crucial federal 
benefits such as Medicaid, SNAP and other safety net programs.
    CANN fully understands that the most precious right for the people 
of the Freely Associated States is air, sea and LAND. As Land is 
scarce, it is the people's most sacred asset. It is passed down through 
maternal lineages and cannot be bought and sold as it is in the United 
States.
    Parcels of land are inextricably intertwined with personal 
identity, culture and heritage. The idea that LAND is a fixed part of 
the family tree is nearly impossible for Americans to understand.
    As plans to build the US nuclear arsenal grew, the US government 
determined that the islands would be used for nuclear weapons testing. 
From 1946-1958, the United States conducted a total of 67 high-yield 
nuclear tests in the Marshall Islands, mainly on Bikini and Enewetak 
Atolls. This included Castle Bravo in Bikini Atoll, the largest U.S. 
nuclear test, which was about 1,000 times more powerful than the bomb 
dropped on Hiroshima. Radioactive fallout from this test traveled 
worldwide.
    CANN recognizes and is appreciative of provisions included in the 
Joint Resolution to Congress, including the extension of Veterans 
Affairs benefits to veterans now living in the Freely Associated 
States, and restoration of federal benefits for COFA citizens residing 
in the United States. These provisions represent important progress in 
justice for COFA citizens.

    However, many challenges remain, and CANN urges the Senate 
Committee on Energy and Natural Resources to seriously address the 
following:

  1.  If the RMI treaty is not finalized by Sept. 30, Congress should 
            pass a Continuing Resolution for the Marshall Islands so 
            that critical services, such as the US Postal Services, 
            health, education, and banking systems, as well as other 
            necessities will continue to function smoothly. CANN 
            understands the repercussions for both countries if the 
            deadline passes without signing of the Agreement. There is 
            a strong possibility that the People's Republic of China 
            (PRC) will attempt to step in and offer to fill the 
            critical economic assistance gaps.

  2.  The US should officially acknowledge that the nuclear bomb 
            testing in the RMI did cause permanent damage to the land 
            and generational health issues to the people. Nuclear 
            testing impacted the entire country, not just the four 
            atolls originally identified in the 1986 Compact.

  3.  CANN supports the view that the $700 million offering in the 
            current signed RMI MOU is inadequate.

  4.  As Senator Joe Bejang of Lib shared earlier this year, ``In 1961 
            Lib Islanders were forcibly displaced for the early stages 
            of Inter-Continental Ballistic Missile (ICBM) testing 
            program on Kwajalein Atoll. When they were allowed to 
            return a few years later, they found their homeland 
            irrevocably altered. Until now Lib Islanders experience 
            intergenerational impacts of displacement and unknown 
            levels of contamination on their island. Lib Islanders 
            deserve access to all information related to their island 
            in order to make informed decisions for their homeland and 
            community, and Lib Islanders deserve fair and just 
            compensation for their role in the success of your missile 
            testing program.'' This issue must be addressed, as 
            separate legislation or in another appropriate form.

  5.  CANN supports the Federated States of Micronesia and the Republic 
            of Palau in their negotiations for full funding of the 
            Postal Service in the FAS.

    In addition, CANN is aware that the People's Republic of China 
wants the Compact negotiations to fail. They see an opportunity to fill 
the vacuum. If the negotiations fail, the temptation for the RMI to 
officially acknowledge the PRC instead of Taiwan substantially 
increases. CANN believes that granting the above will serve the US 
well, as it will greatly diminish the temptation for the RMI to turn 
their heads to the East, looking for economic assistance. Furthermore, 
it is our moral obligation to take responsibility for what needs to be 
done, leaving no space for the PRC.
    Having dealt with the many social and economic equity issues for 
the three COFA nations for many years, CANN strongly believes that the 
requests listed above are very reasonable. Even with the above being 
granted, it will fall far short of the funding level required to 
rehabilitate the radiated land for human habitation. It should be kept 
in mind that to fairly compensate the RMI people displaced from their 
home islands may be impossible, but the US will get closer to winning 
the hearts and minds of the people if the above is granted. It is the 
right thing to do.
    The Marshallese people are by their very nature a kind, loving, 
welcoming and respectful people and treat American visitors as if they 
are family. But it is becoming increasingly difficult for them to grasp 
why the US marginalizes their importance and their cries for help. Help 
to restore and partially heal their homelands, and at the very least 
take more responsibility for what they have done. This third Compact 
represents the opportunity for the US to take that responsibility. The 
RMI people will never forget what the Americans did to free them from 
the grasp of the Empire of Japan during WWII. The US was spared the 
loss of many lives during the invasion of RMI as result of the 
intelligence gained from Marshallese spying.
    This is the time for the US to listen to the Marshallese people, so 
that they can say, ``Yes, America, we remain willing to stand with you 
in the United Nations and we remain full throated in our support of 
your side in discussions throughout the Pacific. We will do this 
because now you are listening to us and you are acknowledging our cry 
for help.''

                                 ______
                                 

Submission for the Record by Surangel S. Whipps, Jr., President of 
        Palau

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                                 .eps__
                                 

Submissions for the Record by the Hon. Kenneth A. Kedi, Speaker, 
        Republic of the Marshall Islands

                  Renewed Compact of Free Association

                                Between

             The Government of the United States of America

                                  And

         The Government of the Republic of the Marshall Islands

                              July 1, 2022

The free association between the Republic of the Marshall Islands (RMI) 
and the United States of America (U.S.) requires each nation to take 
measures benefiting the other. Under a renewal of this relationship, 
the RMI will continue to let the U.S. deny other nations access to its 
lands, waters, and airspace and veto RMI interactions with other 
nations on an indefinite basis, and the U.S. will take the following 
measures in addition to those encompassed by the current relationship 
that are not changed by the provisions described in this document.

I. Nuclear Justice--All elements of the following requiring funding 
will carry a pledge of the full faith and credit of the U.S. that the 
monies will be provided.

  1.  U.S. Apology--As an initial measure, the U.S. will apologize for 
            the harm it caused to the health, lands, and waters of 
            individuals, communities, and the RMI as a whole from its 
            nuclear weapons testing program and for disposing of 
            radioactive waste in the islands during the time that the 
            RMI was under U.S. administration as a trustee.

  2.  Nuclear Claims Tribunal (Tribunal)--The U.S. will provide--

          a.   $3.188 billion for the Tribunal to pay adjudicated but 
        unpaid awards.

          b.   Such sums as may be necessary to enable the Tribunal to 
        resume operations and conclude its work, paying already 
        adjudicated awards and considering unadjudicated claims and 
        paying awards if determined warranted. It is estimated that the 
        administrative cost per year of the Tribunal will be $1.7 
        million, which shall be paid for as long as necessary. 
        Unadjudicated personal injury claims are estimated to require 
        $71 million, and unadjudicated property claims, $500 million. 
        These claims include claims related to the Mid-Range Atolls. 
        The Tribunal process, however, will determine the actual costs.

  3.  Health Care--The U.S. will provide--

          a.   Such sums as may be necessary for the DOE healthcare 
        program for the Four Atolls and Mid-Range Atolls to provide 
        comprehensive medical care covering radiogenic, non-radiogenic, 
        and subsidiary diseases associated with long-term, low-dose 
        exposure to radiation. The program will include annual peer 
        review and oversight to ensure best practices for the unique 
        medical needs of these populations.

                  i)   Funding to support annual peer review and 
                oversight to ensure that the health care program 
                reflects best practices for the unique medical needs of 
                DOE population, as follows:

                      (1)   Project 4.1 subjects from Rongelap and 
                Utrok Atolls and control group;

                      (2)  Individuals from the Four Atolls;

                      (3)  Individuals from the Mid-Range Atolls;

                      (4)  Marshallese workers employed in clean-up 
                activities; and

                      (5)  People raised on islands with residual 
                contamination.

          b.   Funding for planning, building, and instituting a new 
        healthcare program that will include cancer care, with the RMI 
        and the U.S. working collaboratively toward providing a U.S. 
        standard of health care.

                  i)   The funding for the RMI national healthcare 
                program will specifically acknowledge that: the whole 
                of the Marshall Islands is heavily contaminated due to 
                the U.S. nuclear testing program; the health impacts 
                are biomedical, mental, and social in nature; and the 
                Government of the RMI government has had to assume 
                responsibility for healthcare impacts beyond the scope 
                of U.S. healthcare programs or U.S. recognition of the 
                impacts.

          c.   The U.S. will field Public Health Service doctors and 
        other healthcare personnel as determined to be necessary by the 
        RMI in consultation with the U.S. Department of Health and 
        Human Services.

          d.   $5.75 million annually, adjusted for inflation, for an 
        expanded 177 Health Care Program that would also cover Ailuk, 
        Mejit, Likiep, Wotho, Wotje, and Ujelang Atolls, as per U.S. 
        Senate Energy and Natural Resources Committee-approved bill S. 
        1756 of 2007.

  4.  Environment--The U.S. will provide--

          a.   Full disclosure of the use of all chemical and toxic 
        materials released into the environment during the U.S. nuclear 
        weapons testing program.

          b.   Funding for a mutual process to identify and remediate 
        to U.S. CERCLA standards atolls and islands contaminated by the 
        U.S. nuclear weapons testing program, such as Bikini, Rongelap, 
        Utrok, and key areas of Enewetak: the Runit Dome area; the 
        lagoon; and waste disposal sites on Enjebi and Enewetak 
        Islands.

          c.   Funding for independent environmental assessments of 
        Naen Island, Rongelap Atoll; Runit Island, Enewetak Atoll; and 
        other atolls and islands to be specified to determine radiation 
        contamination levels from 1946 to the time of the assessments.

          d.   Independent environmental research and monitoring of the 
        Four Atolls and the Mid-Range Atolls at least once every four 
        years, in close coordination with community members in every 
        phase of research and monitoring that adheres to tenants of 
        Free Prior and Informed Consent.

          e.   Removal of oil and other toxic materials from the sunken 
        vessels at Bikini and any necessary additional environmental 
        remediation.

          f.   Complete removal of strontium-90, cesium-137, plutonium-
        235, plutonium-239, cobalt-60, americium-241, and other 
        radioactive isotopes wherever present in the RMI.

          g.   U.S. standards for environmental monitoring and 
        restoration in the RMI. Despite repeated requests by the RMI, 
        the U.S. continues to apply international standards (100 mrem) 
        for radiological safety to the RMI. The impact of this decision 
        is that the U.S. maintains that it is acceptable for the 
        Marshallese people to be exposed to levels of radiation more 
        than six times higher than U.S. standards for many exposure 
        scenarios.

  5.  Relocation--The U.S. will fund plans jointly developed by the RMI 
            and the U.S. for the relocation of the peoples of Bikini, 
            Enewetak, Rongelap, and Utrok until their atolls are fully 
            remediated. The cost is estimated to be $200 million.

  6.  Other Measures

          a.   The U.S. will ensure independent peer oversight and 
        review of the DOE environmental programs in the RMI to ensure 
        best practices.

          b.   The U.S. will declassify and disclose, without 
        redaction, contents of all documents related to U.S. testing of 
        hazardous weapons and disposal of hazardous waste in the RMI 
        within one year.

          c.   The U.S. and the RMI will conduct Section 177 Agreement 
        consultations annually each July.

          d.   The U.S. will fund, in consultation with the RMI, a 
        museum and education center that would also serve as a 
        repository for all information related to the U.S. nuclear 
        weapons testing program in the RMI.

          e.   The Section 177 Agreement will be amended in accordance 
        with the foregoing. In addition, the authorization of 
        appropriations in the U.S. Compact Acts (Public Law 108-188 and 
        its predecessor, P.L. 99-239) will be utilized to provide 
        funding where possible.
II. Climate Change

  1.  Financial Assistance with Physical Adaptation--The U.S. will 
            provide the RMI with $9 billion to help preserve the RMI's 
            territorial integrity. This figure is derived from a 
            rigorous study of adaptation pathways for the RMI conducted 
            by the Deltares firm on behalf of the World Bank. The study 
            represents the best available science on adaptation options 
            for the RMI. The work and costs are summarized in the 
            following chart.


------------------------------------------------------------------------
  Atolls/Islands            Adaptation          Cost (net present value)
------------------------------------------------------------------------
Majuro Atoll       Protect and raise/reclaim                 $4 billion
                    land
------------------------------------------------------------------------
Kwajalein Atoll    Protect and raise/reclaim                 $2 billion
                    land
------------------------------------------------------------------------
Intermediate       Raise land, relocate                      $2 billion
 Atolls             inward, and internally
                    migrate
------------------------------------------------------------------------
Outer Atolls and   Raise land, relocate                      $1 billion
 Islands            inward, and internally
                    migrate
------------------------------------------------------------------------
Total                                                        $9 billion
------------------------------------------------------------------------


  2.  Technical Assistance--The U.S. will provide technical assistance 
            as follows.

          a.   For additional measures, such as revetment and land 
        reclamation, including artificial and natural buffers.

          b.   For studies of climate hazards and possibilities for 
        solutions not covered above.

          c.   For sharing technologies and techniques for physical 
        adaptations.

          d.   For any planning and studies needed prior to 
        implementing physical adaptations.

          e.   For implementing physical adaptations.

  3.  Disaster Risk Management Assistance--The U.S. will provide the 
            following--

          a.   Technologies and techniques for disaster risk 
        management.

          b.   Assistance with implementing disaster risk management 
        strategies.

          c.   Funding for emergency equipment maintenance.

All assistance will be carried out in partnership with the RMI and 
include programs for capacity development, including transfers of 
technology, sharing of information, and education and training 
opportunities.

III. Economic Assistance

  1.  Financial Assistance--The U.S. will pledge its full faith and 
            credit to provide the RMI with the following amounts, fully 
            adjusted for inflation.

          a.   Sector Grants and Major Infrastructure Needs.

                  i)   Basic grants at the Fiscal Year (FY) 04 level 
                plus $5.2 million (in FY24 dollars) for education and 
                health programs on Ebeye annually through FY44.

                  ii)  A new Social Services Grant at an amount to be 
                subsequently proposed.

                  iii)  Grants for auditing and related capacity 
                building at $1 million (in FY24 dollars) per annum.

                  iv)  Disaster matching assistance at $500,000 (in 
                FY04 dollars) per annum.

                  v)   The amount of the grant used for environmental 
                purposes at Kwajalein would increase from $200,000 to 
                $798,000 (both in FY24 dollars) per annum, fully 
                adjusted for inflation. Additional financial assistance 
                in the amount of $798,000 (in FY24 dollars) per annum 
                would be dedicated to environmental needs elsewhere in 
                the RMI.

                  vi)  Funds spent on public infrastructure will 
                continue to be not less than 30% and no more than 50% 
                of the basic sector grants, but the limitation of 
                eligible projects to the health and education sectors 
                will be eliminated.

                  vii)  Upon conclusion of this agreement, the U.S. and 
                the RMI will jointly assess and ensure financing for 
                major infrastructure needs that would not be met 
                through the use of sector grants and subsequently 
                reassess and reach agreement on further infrastructure 
                needs upon the request of the RMI.

                  viii)  The uses of basic sector grants will be 
                extended to key economic and financial sectors.

          b.  Supplemental Education Grant (SEG)

                  i)   The grant will be made mandatory and continued 
                at the level proposed in President Biden's FY23 Budget, 
                fully adjusted for inflation, for as long as the RMI 
                lets the U.S. exercise fundamental aspects of its 
                sovereignty, although this assistance would be subject 
                to a bilateral review at 20-year intervals.

                  ii)   The accumulated shortfall in past SEG payments, 
                currently $41.6 million, will be provided to seed a 
                trust fund for education and job training.

          c.   A grant of $17.3 million to implement the RMI Energy 
        Roadmap Plan.

          d.   Trade and Tax Compensation. The U.S. will provide the 
        authorized $40 million for its unilateral nullification of the 
        Compact's trade and tax incentives for economic activity in the 
        RMI after the U.S. President's Personal Representative signed 
        the Compact and the Compact was accepted by the people of the 
        RMI in a referendum. These funds will be used to recapitalize 
        the Investment Development Fund referenced in U.S. Public Law 
        99-239 Section 111(b)(1)(ii).

  2.  Federal Programs and Services

          a.   The U.S. will continue all existing U.S. Federal 
        programs and services \1\ for which the RMI is eligible or any 
        successor programs (for as long as the programs exist in the 
        U.S.) and all programs would be covered by a bilateral 
        agreement in addition to U.S. laws. The continuation will be 
        for as long as the U.S. can exercise fundamental aspects of the 
        RMI's national sovereignty, but would be subject to bilateral 
        reviews at 20-year intervals.
---------------------------------------------------------------------------
    \1\ Including but not limited to those programs identified in GAO 
Report 18-415.

          b.   The U.S. will continue current postal services with 
        changes to include: restoring the Ebeye Post Office Zip Code 
        (96970); designating additional zip codes for Jaluit and Wotje; 
        and changing its Designated Sorting Facility from Guam to 
        Hawaii to shorten the time that it takes for mail to arrive in 
---------------------------------------------------------------------------
        the RMI from the U.S.

          c.   The U.S. will restore in/or extend to the RMI additional 
        Federal programs to be specified later, including, but not 
        limited to the National School Lunch Program, Head Start, the 
        Peace Corps, and FEMA.

          d.  Banking.

                  i)   RMI domestic banks would be granted direct and 
                full access to U.S. Federal Reserve System financial 
                services, including the use of Federal Reserve master 
                accounts, capacity building, and other technical 
                assistance.

                  ii)  The U.S. will give the RMI Monetary Authority 
                full access to any relevant and applicable U.S. Federal 
                Reserve payment services. This includes Federal Reserve 
                services provided for central banks and monetary 
                authorities under the heading of ``Central Bank and 
                International Account Services'' for funds, securities, 
                securities clearing, settlement, investments, 
                correspondent banking, and custody services to safely 
                and confidentially execute official RMI Government 
                transactions.
  2.  Compact Trust Fund (CTF)--The U.S. will pledge its full faith and 
            credit to provide the following--

          a.   Contributions to the CTF at the FY04 level, fully 
        adjusted for inflation, through FY44. The U.S. may choose to 
        continue contributions beyond this date to enhance CTF growth 
        and sustainability.

          b.   Distributions in FY45 and after from the CTF would be at 
        the level of the FY44 expiring grants at the least, fully 
        adjusted for inflation, with the U.S. making up any shortfall 
        in the ability of the CTF to make the distributions at the FY44 
        level on a fully adjusted for inflation basis for as long as 
        the U.S. exercises sovereign rights of the RMI.

          c.  Trust Fund Agreement Reforms.

                  i)   The RMI will be granted full control of the CTF 
                except in cases in which this would compromise the 
                U.S.' ability to exercise the strategic denial and 
                defense veto that the RMI is permitting it to exercise 
                (as is the case with Palau).

                  ii)   Other changes to the CTF Agreement will be 
                made, including its distribution rules.

                      (1)   So that distributions balance the needs of 
                the current generation and future generations. 
                Distributions must also smooth out volatility as long 
                as this does not materially compromise the 
                sustainability of the CTF.

                      (2)   To ensure that the distribution for each 
                fiscal year is fully determined in time to inform the 
                RMI's budgeting process.

                      (3)   Provisions regarding a Trustee will be 
                eliminated. The accepted current practice for such 
                funds is to have a Custodian instead.

                      (4)   So that not less than 5% nor more than 10% 
                of the CTF is invested in the RMI, provided that 
                investments in the RMI will be subject to the same 
                scrutiny and criteria as other CTF investments.

  4.  Other Measures

          a.   The Joint Economic Management and Fiscal Accountability 
        Committee (JEMFAC) will be abolished and Compact Section 214 
        will be amended to refer to a Fiscal Procedures Agreement (FPA) 
        to implement Section 211 economic assistance.

          b.   The FPA will be amended based on the FPA in the original 
        Compact, updated as appropriate.

          c.   If the RMI Monetary Authority is established, the U.S. 
        will facilitate payment of grant funds into RMI accounts with 
        the Monetary Authority. (The RMI Monetary Authority, by law, 
        would facilitate all cross-border payments for the Government 
        and hold Government accounts.)

          d.   The Renewed Compact will be jointly reviewed before its 
        20th anniversary. Two years prior to the review, the RMI and 
        the U.S. will discuss the contours of any changes needed in the 
        economic arrangements made in this proposal.

IV. Military Use and Operating Rights Agreement (MUORA)--The U.S. will 
pledge its full faith and credit to provide the following--

  1.  Grant Assistance

          a.   Kwajalein Impact Development Fund (KIDF). The Ebeye 
        Special Needs fund (ESN) and Kwajalein Impact Fund (KIF) will 
        be merged to establish a Kwajalein Impact Development Fund. 
        Funding levels for the KIDF will be at the combined levels of 
        the ESN ($5.1 million in FY04 dollars) and the KIF ($1.9 
        million in FY04 dollars), fully adjusted for inflation.

          b.   Kwajalein Master Plan. The U.S. will grant $132 million 
        to finance the implementation of the Kwajalein Master Plan, as 
        authorized by U.S. P.L. 108-188 Section 103(L)(5).

          c.   Funding for a nutrition supplement program to compensate 
        for loss of land and seafood . . . sources and other hardships 
        due to U.S. military activity.

  2.  Investment Opportunities

          a.   A Kwajalein Landowner Trust Fund will be established 
        with seed funding provided by bringing forward the seven-year 
        advance notice payment.

          b.   Improve economic opportunities for Marshallese to 
        participate at USAG-KA by: (1) amending the SOFA to create 
        equal opportunity for Marshallese and US Contractors at U.S. 
        defense sites; and (2) amending SBA regulations to include 
        citizens of the Marshall Islands as qualifying for Section 8 
        status under the U.S. Small Business Act, and to provide for 
        eligibility and implementation of the set-aside program for 
        Marshallese owned small businesses at USAG-KA.

          c.   Allow for Communities in close proximity to USAG-KA 
        operated defense sites to be able to procure excess power and 
        water supplies to help supplement existing utility services to 
        these communities (i.e., Ebeye, Eenbouj, and Ennibur, etc.)

  3.  Environmental Stewardship

          a.   The U.S. will undertake an updated and tiered 
        Environmental Impact Assessment under U.S. National 
        Environmental Policy Act for U.S. Army Garrison-Kwajalein Atoll 
        (USAG-KA) activities as a whole, with fulsome local community 
        participation.

          b.   The U.S., in consultation with the RMI, will establish 
        an independent and dedicated forum with a mediator to address, 
        conclude, and compensate proven claims of harm and damage from 
        ongoing U.S. military activity in RMI.

          c.   The U.S. will expand the mandate of the USAG-KA 
        Environmental Standards Project Team and the mandate of other 
        appropriate agencies to address USAG-KA environmental issues 
        outside of the Standards Project and transparently and 
        expeditiously address environmental issues in the RMI outside 
        of the USAG-KA, in a manner that is consistent but takes into 
        account local circumstances. (U.S. agencies to be involved will 
        include the EPA, NOAA, NMFS, FWS, and ACE.)

          d.   Current U.S. assistance provided by EPA Region IX will 
        be included as a specified Federal program and fund in a 
        bilateral agreement. (A mutual sectoral, time-bound plan with 
        benchmark milestones and clear activities will replace current 
        ad-hoc U.S. approaches. Related assistance will be expanded 
        with U.S. FWS, NOAA, and NMFS assisting with capacity-
        building.)

          e.   The U.S. will fund, at a minimum $100,000, for 
        appropriate public health outreach measures for Kwajalein Atoll 
        communities. The primary need is an epidemiological study of 
        Ebeye children to determine whether lead contamination has 
        occurred from eating fish caught near Ebeye in Kwajalein Atoll.

  4.  Lib Island, Biken Island (Aur Atoll), and Mili Atoll

          a.   Lib Island. The U.S. will pledge its full faith and 
        credit to provide Lib with the following amounts, fully 
        adjusted for inflation. All amounts are in FY24 dollars.

                  i)   Establish a Lib Island Special Needs similar yet 
                separate program akin to Ebeye Special Needs--

                      (1)  Back payment of $3.86 million

                      (2)  Ongoing payment of $324,000 p.a.

                      (3)   Include Lib in any successor or additional 
                programs to ESN as agreed in these negotiations

                  ii)   Establish a Lib Island Impact Fund similar yet 
                separate program akin to the Kwajalein Impact Fund 
                (KIF)

                      (1)  Back payment of $1.72 million

                      (2)  Ongoing payment of $121,000 p.a.

                      (3)   Include Lib in any successor or additional 
                programs to KIF as agreed in these negotiations

                  iii)   If, in addition to ESN and KIF, other 
                provisions are agreed for Kwajalein as part of the 
                renewed proposal, Lib should be included wherever 
                appropriate. This may include for example any nutrition 
                supplement program.

                  iv)   To be used to seed a trust fund:

                      (1)  Hardship.

                          (a)   A once-off payment of $8.66 million in 
                respect of hardship experienced during displacement

                          (b)   A once-off payment of $23.30 million, 
                plus ongoing contributions of $632,000 p.a., in respect 
                of hardship experienced as a result of post 
                displacement, for as long as the U.S. exercises 
                sovereign rights of the RMI

                      (2)  Loss of use.

                          (a)  $3.04 million for loss of use during 
                1961-1966 displacement

                          (b)   No more than three years after the 
                entering into force of the renewed Compact, the US will 
                prove, with full transparency to Lib and RMI 
                authorities, that its activities did not make Lib 
                unsafe to live on at any point following repatriation. 
                In respect of any years where this cannot be proven, 
                Lib will be entitled to loss of use payments in respect 
                of the unsafe period(s) calculated consistently with 
                the methodology used by the Nuclear Claims Tribunal, 
                including the adjustment using interest rates.

                  v)   UES. Inclusion of Lib Island in the Kwajalein 
                USAG-KA Environmental Standards with an operational 
                budget of $390,000 p.a.

                  vi)   Pursuant to an agreement, the U.S. military 
                through the USAG-KA, will provide Lib with--

                      (1)  Emergency medical care and emergency 
                evacuation and

                      (2)   All data regarding the impact of U.S. 
                military activities on Lib.

          b.  Biken Island (Aur Atoll)

                  i)   The payments for military use of 4.253 acres of 
                land on Biken during the last 20 years will be 
                supplemented to increase the amounts to a fair market 
                value rate, fully adjusted for inflation since the land 
                use agreement came into effect in 1995, and future 
                payments will be made on this basis.

                  ii)   The U.S. will provide just compensation for 
                military use of Tobal Airstrip and adjacent land for 
                storage, as stipulated in the MUORA, retroactive to 
                1995, when the MUORA went into effect.

                  iii)   The U.S. will grant the RMI funds to be used 
                in cooperation with the Aur Atoll Local Government for 
                improvements to the Tobal airstrip to ensure safety and 
                compliance with military standards, such as width and 
                length of pavement and lighting, and for improvements 
                and construction of other infrastructure, such as docks 
                and roads.

          c.   Mili Atoll--The U.S. will, within one year, respond to 
        RMI's offer for use of Mili Atoll.

V. General and Other Provisions

  1.  The U.S. will recognize the sovereignty of the Government of the 
            RMI over Enen-Kio.

  2.  The U.S. will provide all Veterans Affairs benefits in the RMI.

  3.  The U.S. will agree to a subsidiary agreement on the use of the 
            RMI's upper airspace and its management.

  4.  Section 141(h) of the Compact, as Amended, will be amended to 
            strike ``does not confer on'' and insert in lieu thereof, 
            ``confers upon'' and to strike ``or'' and insert in lieu 
            thereof ``and'' so that Marshallese who reside in the 
            United States and its territories under Section 141(a) will 
            count toward the residence requirements necessary for 
            naturalization under the U.S. Immigration and Nationality 
            Act.

  5.  The U.S. will make RMI citizens in the U.S. eligible for all 
            Federal programs applicable in the jurisdiction in which 
            they live and this eligibility will be covered by a 
            bilateral agreement in addition to the statutes involved, 
            such as SSI and SSDI.

  6.  In addition to the U.S. Coast Guard and Merchant Marine 
            Academies, the U.S. shall expand the access of the 
            Marshallese students to its Army, Navy, and Air Force 
            Academies.

  7.  The Compact's trade provisions in Article IV of Title Two 
            (Section 242) will be amended to allow quota and duty-free 
            entry of certain forms of art including handicrafts, fresh 
            and frozen tuna products to the United States and its 
            territories with necessary adjustments to local content 
            requirements.

  8.  The U.S. will agree to a subsidiary agreement to allow 
            international airlines to operate and service in the RMI.

                                 ______
                                 

                         PACIFIC ISLANDS FORUM

                    Office of the Secretary General

                                                  July 10, 2023    

His Excellency Joseph R. Biden Jr.
President of the United States of America
The White House
1600 Pennsylvania Ave. NW
Washington, DC

    Dear Mr President:

 ENHANCED PARTNERSHIP TO ADDRESS NUCLEAR LEGACY ISSUES IN THE REPUBLIC 
                        OF THE MARSHALL ISLANDS

    Our warmest greetings from the Blue Pacific. I write on behalf of 
the Pacific Islands Forum, its Leaders and the people of the Blue 
Pacific Continent, to once against convey our collective support for 
the Republic of the Marshall Islands in its ongoing efforts to seek a 
lasting solution to all outstanding issues resulting from the United 
States Nuclear Testing Program.
    As a community, the Forum's support for the Marshall Islands and 
its people on this matter is longstanding and premised on the 
principles of regional solidarity, and our vision for the Pacific as 
reaffirmed under our 2050 Strategy for the Blue Pacific Continent.
    To this end, I refer to our historic Declaration on US-Pacific 
Partnership of 29 September 2022 and commend the renewed leadership and 
commitment of the United States to addressing nuclear legacy issues. I 
am particularly pleased that the United States expressed continued 
commitment to addressing the Republic of the Marshall Islands' ongoing 
environmental, public health concerns, and other welfare concerns.
    We also recognise your Proclamation on National Atomic Veterans 
Day, 2021, recognising atomic veterans that served at testing sites 
like the Bikini Atoll in the Marshall Islands and witnessed the 
destructive power of nuclear weapons first-hand. We applaud your pledge 
to fulfil your obligation to the Atomic Veterans and their families, 
and ensuring timely access by all veterans to the necessary services, 
medical care, and benefits.
    Indeed, our joint Declaration of 2022 and your Proclamation of 2021 
inspire renewed hope and commitment to address all outstanding nuclear 
legacy issues for our affected Pacific communities and people.
    Mr President, I count on your judicious and transformative 
leadership and compassion to extend recognition to our affected Pacific 
people--nuclear victims and survivors--who continue to bear the brunt 
of the permanent environmental, health and human rights impacts of the 
US Nuclear Testing Programme in the Marshall Islands, which has had 
profound consequences on the national and human development of the 
Marshall Islands. In addition, the Runit Dome continues to pose a 
threat to the health and livelihoods of the peoples of the Pacific, 
particularly due to its susceptibility to sea-level rise and extreme 
weather events.
    As conveyed in our letter of 22 November 2019 (enclosed), we once 
again call on the US Government to increase monitoring and to address 
health consequences related to the nuclear testing programme. I urge 
your administration to re-look into the support you can provide, 
including intensifying your monitoring efforts of Runit Dome and the 
surrounding environment, and to taking the necessary remedial steps to 
contain the potential migration of radioactive nuclear waste into the 
ocean environment.
    Mr President, this is an issue deeply rooted in our shared history, 
and I believe that together, we can garner the political will to 
deliver urgent and ambitious action to address all outstanding nuclear 
legacy issues, notwithstanding the lack of progress in resolving this 
outstanding matter, and the lack of reaction to past calls by Pacific 
Islands Forum Chairs for meaningful engagement.
    This is also befitting as we approach the commemoration of 
International Day Against Nuclear Tests on 29 August 2023.
    The United States and the Pacific Islands Forum continues to enjoy 
a mutually beneficial relationship, and your Government's continued 
engagement with the Pacific Islands Forum is applauded. In the spirit 
of our strong partnership, I welcome the opportunity to meet with you 
and dialogue on this issue of mutual interest, and to renew our 
commitment to the values that we share.
    Please accept, Excellency, the assurances of my highest 
consideration.

            Yours sincerely,

                                                Henry Puna,
                                                  Secretary General

                                 ______
                                 

Submission for the Record by Leo Falcam, Jr., Chief Negotiator for the 
        Federated States of Micronesia

                             THE PRESIDENT

                     Federated States of Micronesia

                                                  July 14, 2023    

Hon. Aumua Amata C. Radewagen, Chair
Hon. Rep. Gregorio Kilili Camacho Sablan, Co-Chair
Indo-Pacific Task Force
House Committee on Natural Resources
Washington, DC 20515

    Dear Task Force Chair Radewagen and Co-Chair Sablan:

    Thank you for your invitation to testify on Tuesday, July 18, 2023, 
on the Biden administration's Proposed Compact of Free Association 
Amendments Act of 2023. I am pleased to designate as the representative 
of the Federated States of Micronesia our Chief Negotiator in the 
Compact talks, Mr. Leo Falcam, Jr. Mr. Falcam has been our Chief 
Negotiator since 2019 and will be an outstanding representative of our 
Government at the upcoming hearing.
    I take this opportunity to thank you for your leadership on 
advancing this important legislation through the U.S. Congress. The 
U.S. and the Federated States of Micronesia enjoy an extraordinary 
close relationship that continues to deepen through our broad 
diplomatic, economic, and military partnership and the steadfast 
support of the United States for the FSM's economic development and 
self-sufficiency. U.S. Government economic assistance to our Government 
is essential, and we request expeditious consideration of the package 
pending before Congress. An end to U.S. support at the end of September 
2023 would create an unprecedented economic and political crisis for 
our country and our people.

            Sincerely,

                                          Wesley W. Simina,
                                                      President    

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