How Could Congress Unilaterally Change the Compact?
The United States did not claim sovereignty over the Marshalls or FSM, but merely administered them under a 1947 Agreement with the United Nations in 1947. United Nations (the “Trusteeship Agreement”). Thus the authority of the United States to unilaterally abrogate the provisions of the Marshalls/Micronesia Compacts is unclear. However, some background may be helpful. On April 1, 1977 the Congress of Micronesia (“C.O.M.”), then exercising jurisdiction over all of what would later be the Marshalls, FSM and Palau enacted Public Law 7-32 imposing a progressive income tax throughout the area. These jurisdictions appeared to be on the way to becoming broken mirror jurisdictions like Puerto Rico and American Samoa. Compact negotiations proceeded in light of this development. The progressive income tax was originally to become effective January 1, 1978. However on October 11, 1977 C.O.M. P.L. 7-67 deferred the effective date to January 1, 1979. That date matched the effective date for the No
