-10Islands and the FSM.
If these negotiations are not concluded by the fifteenth
anniversary, all of the provisions of the Compact, including U.S.
defense rights under Title Three, will remain in effect for an
additional two years and continue to be implemented according to
their original terms. However, the United States will. provide the
avérage of annual amounts of the assistance which had been
provided during the initial fifteen year period under Sections 21]
(grant assistance); 212 (FSM Civic Action Teams funding); 213
(United States payments for military operating rights in FAS); 214
(FAS energy production funds); 215 (communications grants); and
216 (FAS marine surveillance, medical service and scholarship
funding).
The inflation adjustment provided under Section 217
will apply to these averaged annual amounts (excluding Sections
212, 213 and 216 funding).
This continuation of support during
the sixteenth and seventeenth years will ensure the preservation
of the economic stability of the FAS and United States defense
rights while the United States and the state concerned negotiate a
continuation of free association or a different political relationship.
Free association will not terminate automatically, but may
be terminated by unilateral action of any signatory or mutual
agreement between the United States and any or all of the FAS.
Section 232.
This section provides that the program assistance to
be made available under Section 221 be defined in separate agreements.
The levels and duration of such assistance, and the legal
parameters within which federal agencies will operate -- including
the legal status of their employees, payment of claims, entry and
departure of employees and other similar matters -- are dealt with
in the comprehensive agreement negotiated pursuant to this
section.
Under that agreement, federal agency civilian employees
will enjoy certain privileges, exemptions and limited immunity
from FAS laws, including tax laws, and federal agencies are
assured the operational freedom necessary to carry out their
responsibilities.
Section 233.
This section authorizes the United States to conduct
audits of grant and program assistance provided to the FAS under
Articles I and II of Title Two.
These audits will enable the
United States to determine if the FAS have met the requirements
set forth in the Compact and its separate agreements regarding the
purposes for which funds and program assistance are to be used and
the propriety of their financial transactions.
The procedures for
conduct of the audits will be the subject of consultation to
ensure that institutional integrity is preserved, and that the
United States will have full access to financial information
relating to Compact funding.
The procedures for conducting the
audit and obtaining annual reports and other financial information
as reguired by the Compact are the subject of a separate agreement
on fiscal procedures between the United States and the FAS.
Section 234.
This-section provides for the transfer to the FAS at