USA-Palau

Bilateral in force

INTRODUCTION

Located in the Pacific Ocean, the Republic of Palau is an island nation that maintains a unique political, economic, and military relationship with the United States through a bilateral Compact of Free Association (COFA). For over 40 years, the COFA has facilitated free movement between Palau and the United States. Palauan citizens can travel without a visa or additional permit authorisations to the United States to work, live, and study. Similarly, U.S. citizens can travel, live, study, and invest in Palau with no visa restrictions, although work authorisation is subject to local regulations. These provisions have remained unchanged since the COFA's implementation.

In 1947, the United Nations designated the United States as the administering authority over the Trust Territory of the Pacific Islands (TTPI), which included the Republic of Palau. Palau was the last district of the TTPI to gain sovereignty, officially becoming independent in 1994 and entering into the Compact of Free Association (COFA) that same year. The primary reasons for its adoption were to establish Palau’s self-governance, provide U.S. economic assistance, and enforce mutual security.

Unlike the COFAs of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI), Palau’s agreement lacked an automatic amendment process for extending economic assistance. The original COFA set funding for 15 years (1994–2009) and required a separate Compact Review Agreement (CRA) in 2010 to extend economic aid through 2024. Due to congressional delays, Congress only approved and implemented the CRA in 2017, leaving Palau with temporary, partial assistance through Continuing Resolutions, which were inconsistent and uncertain from FY2010-FY2018. In May 2023, economic assistance under COFA was renewed for another twenty years (2024–2043), set to take effect after U.S. congressional approval in March 2024.

Under COFA provisions, Palauan citizens by birth and former TTPI citizens who acquired Palauan nationality in 1994 can lawfully enter, reside, work, and enlist in the U.S. military visa-free as non-immigrants for an indefinite stay. However, COFA migrants are still subject to U.S. immigration laws, meaning entry is not guaranteed, and criminal records, for example, may be grounds for inadmissibility. Unlike the FSM and RMI COFA agreements, non-Palauan family members and spouses of Palauan COFA migrants do not receive visa-free entry and must apply through regular U.S. immigration channels. No provisions regarding Palauan immediate family members exist in the Compact. Given the bilateral framework of the COFA, U.S. citizens may also enter, reside and work in Palau visa-free.

STATE PARTIES

PALAU
UNITED STATES

TIMELINE

1994	The COFA between the United States and Palau took effect on October 1st.
2010	On September 3, Palau and the United States reached an agreement to extend economic assistance for another 15 years through a Compact Review Agreement (2010–2024).
2023	Palau and the United States signed a 20-year renewal of the COFA, with amendments, covering the period from 2024 to 2043, on 22 May.
2024	The amendments came into full force on 15 March.

KEY LEGAL DOCUMENTS

Compact of Free Association between the Republic of Palau and the United States, 14 November 1986. Entry into Force on 1 October 1994.

ADDITIONAL LEGAL DOCUMENTS

Agreement between the Government of the United States of America and the Government of the Republic of Palau following the Compact of Free Association Section 432 Review, 3 September 2010.