Amended Compact (Compact II) signed in Palikir after nearly five years of talks.

What happened

The first Compact’s 15-year economic package had expired, so the two countries negotiated a new 20-year package. Grants would go each year to six sectors (education, health, capacity-building, private-sector development, environment and infrastructure), while a growing share went into a trust fund meant to replace grants after 2023.

Why it matters

This was the start of the second Compact funding era, which lasted until 2023.