independent since May 25, 1994, when the trusteeship was cancelled). Legislation making Palau an "offshore" financial center was passed by the Senate in 1998. In 2001, Palau passed its first bank regulation and anti-money laundering laws. Politics and government Main article: Politics of Palau Palau's politics takes place in a multi-party framework of a presidential representative democratic republic, whereby the President of Palau is both head of state and head of government. Executive power is exercised by the government, while legislative power is vested in both the government and the Palau National Congress. The judiciary is independent of the executive and the legislature. Palau adopted its own constitution in 1981, and the governments of the United States and Palau concluded a Compact of Free Association in 1986, similar to compacts that the United States had entered into with the Federated States of Micronesia and the Republic of the Marshall Islands.[7] The compact entered into force on October 1, 1994, concluding Palau's transition from trusteeship to independence[7] as the last portion of the Trust Territory of the Pacific Islands to gain its independence. Free association Main article: Compact of Free Association The Compact of Free Association between the United States and Palau[8] sets forth the free and voluntary association of their Governments, and is primarily focused on the issues of government relations, economic relations, and security and defense relations.[9] Palau has no independent military, and relies on the United States for its defense. Under the Compact, the American military has been granted access to the islands for 50 years. The role of the US Navy is quite minimal, limited to a handful of Navy Seabees (construction engineers) but the United States Coast Guard does have a stronger presence in patrolling the waters. Foreign relations As a sovereign nation, Palau conducts its own foreign relations.[7] Since independence, Palau has established diplomatic relations with a number of nations, including many of its Pacific neighbors. Palau was admitted to the United Nations on December 15, 1994, and has since joined several other international organizations. In September 2006, Palau hosted the first Taiwan-Pacific Allies Summit, and its President has gone on several official visits to other Pacific countries, including the Republic of China (Taiwan). The United States maintains the usual diplomatic delegation and an embassy in Palau, but most aspects of the two countries' relationship have to do with Compact-funded projects, which are the responsibility of the U.S. Department of the Interior's Office of Insular Affairs.[10] This has led to some ambiguity in the official status of Palau,[citation needed] though regarded as de jure independent. Since 2004, Palau has joined the United States and Israel as the only nations voting consistently against an annual U.N. resolution condemning the United States embargo against Cuba which has been in place since 1962. On October 5, 2009 Palau formalized Diplomatic and Trade Ties with Malaysia and Lord Morris Davidson was appointed as Palau's first Honorary Consul to Malaysia. Palau is a member of the Parties to the Nauru Agreement.[11] Nuclear-free constitution In 1981, Palau voted for the world's first nuclear-free constitution. This constitution banned the use, storage, and disposal of nuclear, toxic chemical, gas, and biological weapons without first being approved by a 3/4 majority in a referendum.[12] This ban held up Palau's transition to independence because while negotiating a Compact of Free Association with the United States, the U.S. insisted on the option to operate nuclear propelled vessels and store nuclear weapons within the territory.[13] After several referendums that failed to achieve a 3/4 majority, the people of Palau finally approved the compact with the U.S. in 1994.[14][15] Asylum for former Guantanamo prisoners See also: Uyghur captives in Guantanamo On June 10, 2009, Palau announced that it would accept up to all 17 of the remaining Uyghurs detained in Guantanamo "as a humanitarian gesture."[16][17][18][19][20][21] Five Uyghur captives were released without being prosecuted in 2004, and transferred to Albania in 2006. The remaining seventeen were released due to lack of evidence in 2008. Stuart Beck, Palau's representative to the United Nations, published an op-ed in the New York Times disputing the widely distributed report that Palau's agreement to accept the Uyghurs was tied to Palau's receipt of US$200 million in foreign aid.[16][17][18][19][20][21][22] Beck asserted that Palau was receiving funds from the USA connected with accepting the Uyghurs, but it was $90,000 per Uyghur, not "$12 million." Beck asserted that the $90,000 was to compensate Palau for its "relocation costs" and was "to cover transportation, food, housing and medical help until the men can get oriented and get jobs". ABC News confirmed that the United States would be paying Palau for each captive who was resettled and quoted a senior official who described the amount as "not very substantial."[23] William Cleary, writing in the Pacific Daily News, reported that Palau was in a poor bargaining position to decline the American request.[24] He wrote: "The detainee transfer deal comes at a time when generous U.S. financial aid and economic development grants to Palau under a 15 year old treaty of free association between the two nations have expired. Palauan leaders apparently wanted to demonstrate their commitment to sharing mutual interests and burdens with the USA, as they make the case for renewal of U.S. grant assistance." However, Cleary also described the assertions that the captive resettlement was a straight quid pro quo as "misleading."[24] He listed the USA's desire to continue to be able to base DoD personnel on Palau, to balance the growing military force of the People's Republic of China as one complicating factor. He also listed Palau's desire to have exemption from growing pressure within the United States to restrict immigration from former protectorates like Palau as another complicating factor. An official "technical working group" from Palau traveled to Guantanamo to meet with the Uyghurs in mid-June 2009.[25][26] On June 23, the Palau government published a press release which said only eight of the thirteen Uyghurs agreed to meet with the delegation. Their report stated: "The team advised President Toribiong that in their opinion only a few of the detainees that were interviewed had any real interest in being relocated to Palau." On June 30, Radio New Zealand International reported only one Uyghur agreed to be temporarily resettled in Palau.[27] On September 10, The Times reported that three of the Uyghurs have accepted the invitation to be transferred to asylum in Palau.[28] On September 19, Fox News reported that in the week since the first announcement three further Uyghurs agreed to be transferred to Palau.[29] Fox reported that five of the other Uyghurs had refused to speak with Palau officials. On October 31, six Uyghurs were reported to have been transferred to Palau.[30][31][32][33][34] Twelve of the thirteen remaining Uyghurs were offered asylum. The thirteenth man was not offered asylum because his mental health had deteriorated too severely for the mental health resources available in Palau. The USA agreed to give Palau additional aid in January 2010.[35] Palau had rejected an earlier aid package of $156 million. The new aid package was for $250 million. President Toribiong asserted that the increase in aid was unrelated to Palau agreement to host the Uyghurs. States The sixteen states of Palau. Main article: States of Palau Palau is divided into sixteen states (until 1984 called municipalities). These are listed below with their areas (in square kilometres) and 2005 Census populations: State Area (km2) Census 2005 Aimeliik 52 270 Airai 44 2,723 Angaur 8 320 Hatohobei 3 44 Kayangel 3 188 Koror 18 12,676 Melekeok 28 391 Ngaraard 36 581 Ngarchelong 10 488 Ngardmau 47 166 Ngaremlengui 65 317 Ngatpang 47 464 Ngchesar 41 254 Ngiwal 26 223 Peleliu 13 702 Sonsorol 4 100 Historically, Palau's uninhabited Rock Islands have been part of the State of Koror. Republic of Palau. Geography Main article: Geography of Palau Palau's most populous islands are Angaur, Babeldaob, Koror, and Peleliu. The latter three lie together within the same barrier reef, while Angaur is an oceanic island several miles to the south. About two-thirds of the population live on Koror. The coral atoll of Kayangel is situated north of these islands, while the uninhabited Rock Islands (about 200) are situated to the west of the main island group. A remote group of six islands, known as the Southwest Islands, some 375 miles (604 km) from the main islands, are also part of the country and make up the states of Hatohobei and Sonsorol. Palau has a tropical climate all year round with an annual mean temperature of 82 °F (28 °C). Rainfall is heavy throughout the year, averaging a total of 150 inches (3,800 mm). The average humidity over the course of the year is 82%, and although rain falls more frequently between July and October, there is still much sunshine. Typhoons are rare, as Palau is outside the main typhoon zone. Climate data for Palau Islands (1961-1990) Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year Average high °C (°F) 30.6 (87.1) 30.6 (87.1) 30.9 (87.6) 31.3 (88.3) 31.4 (88.5) 31.0 (87.8) 30.6 (87.1) 30.7 (87.3) 30.9 (87.6) 31.1 (88.0) 31.4 (88.5) 31.1 (88.0) 30.97 (87.74) Daily mean °C (°F) 27.3 (81.1) 27.2 (81.0) 27.5 (81.5) 27.9 (82.2) 28.0 (82.4) 27.6 (81.7) 27.4 (81.3) 27.5 (81.5) 27.7 (81.9) 27.7 (81.9) 27.9 (82.2) 27.7 (81.9) 27.62 (81.71) Average low °C (°F) 23.9 (75.0) 23.9 (75.0) 24.1 (75.4) 24.4 (75.9) 24.5 (76.1) 24.2 (75.6) 24.1 (75.4) 24.3 (75.7) 24.5 (76.1) 24.4 (75.9) 24.4 (75.9) 24.2 (75.6) 24.24 (75.64) Precipitation mm (inches) 271.8 (10.701) 231.6 (9.118) 208.3 (8.201) 220.2 (8.669) 304.5 (11.988) 438.7 (17.272) 458.2 (18.039) 379.7 (14.949) 301.2 (11.858) 352.3 (13.87) 287.5 (11.319) 304.3 (11.98) 3,758.3 (147.965) Avg. precipitation days 19.0 15.9 16.7 14.8 20.0 21.9 21.0 19.8 16.8 20.1 18.7 19.9 224.6 Mean monthly sunshine hours 198.4 194.9 244.9 234.0 210.8 168.0 186.0 176.7 198.0 179.8 183.0 182.9 2,357.4 Source: Hong Kong Observatory,[36] Environment Rock Islands in Palau. WCTC Shopping Center Aerial view of limestone islands While much of Palau's natural environment remains free of environmental degradation, there are several areas of concern, including illegal fishing with the use of dynamite, inadequate facilities for disposal of solid waste in Koror, and extensive sand and coral dredging in the Palau lagoon. Like the other Pacific island nations, a potential major environmental threat is rising sea levels. Water coverage of low-lying areas is a threat to coastal vegetation, agriculture, and the purity of the nation's water supply. Palau also has a problem with inadequate water supply and limited agricultural areas to support the size of the population. The nation is also vulnerable to earthquakes, volcanic activity, and tropical storms. Sewage treatment is a problem, along with the handling of toxic waste from fertilizers and biocides. On November 5, 2005, President of Palau, Tommy E. Remengesau, Jr. took the lead on a regional environmental initiative called the Micronesia challenge, which would conserve 30% of near shore coastal waters and 20% of forest land by 2020. In addition to Palau, the initiative was joined by the Federated States of Micronesia and Marshall Islands, and the U.S. territories of Guam and Northern Mariana Islands. Together, this combined region represents nearly 5% of the marine area of the Pacific Ocean and 7% of its coastlines. On September 25, 2009, Palau announced that it would create the world's first "shark sanctuary".[37] Palau has banned all commercial shark fishing within its EEZ waters. The sanctuary protects about 600,000 square kilometres (230,000 sq mi) of ocean,[38] a similar size to the European country of France.[39][40][41] President Johnson Toribiong made the announcement at a meeting of the United Nations.[39][42][43] President Toribiong also requested a worldwide ban on fishing for sharks.[39] Saltwater crocodiles are also residents of Palau and occur in varying numbers throughout the various mangroves and even in parts of the beautiful rock islands. Although this species is generally considered extremely dangerous, there has only been one fatal human attack in Palau within modern history, and that was in the 1960s. In Palau the largest crocodile measured in at 4.5 metres (15 ft).[citation needed] Economy Koror-Babeldaob Bridge. Main article: Economy of Palau Palau's economy consists primarily of tourism, subsistence agriculture, and fishing. Tourist activity focuses on scuba diving and snorkeling in the islands' rich marine environment, including its barrier reefs walls and World War II wrecks. The government is the major employer of the work force, relying heavily on financial assistance from the US. Business and tourist arrivals numbered 50,000 in the financial year 2000/2001. The population enjoys a per capita income twice that of Micronesia as a whole. Long-term prospects for the key tourist sector have been greatly bolstered by the expansion of air travel in the Pacific, the rising prosperity of leading East Asian countries, and the willingness of foreigners to finance infrastructure development. In July 2004, Palau Micronesia Air was launched with service from Palau to Yap, Guam, Micronesia, Saipan, Australia, and the Philippines. By offering low fares it was planned to be a competitor of Continental Micronesia, however it ceased operations in December of the same year, mainly because of rising fuel prices. Palau Micronesia Air has not restarted operations since but has made a codeshare alliance with Asian Spirit, a carrier that operated flights between Palau and the Philippines (Davao, Cebu, and Manila). There were two flights weekly from Manila via Cebu to Palau and one flight weekly from Davao. Just after few months of service, Asian Spirit ceased its Philippines to Palau route. In March 2010, Pacific Flier began providing air services to Clark, Gold Coast and Guam, however, Pacific Flier suspended operations shortly after, in August 2010.[44] In November 2006, the Palau Saving Bank officially announced bankruptcy. On December 13 of the same year the Palau Horizon reported that there were a total of 641 depositors that had been affected by the event. Among the 641 accounts, 398 held less than $5000 USD, with the remainder ranging from $5000 to 2 million USD. On December 12, 79 of the affected people received compensation, one was Taiwanese, while the rest were Palauan, Filipino and US citizens. Mr. Toribiong said, "The fund for the payout came from the balance of Palau government's loan from Taiwan." From a total of $1 million USD, which originally was for assisting Palau's development, there was $955,000 USD left at the time of bankruptcy. For the $955,000, Toribiong requested the Taiwanese government use it to repay its loans. Taiwan agreed to the request. The compensation will start its paying to depositor, who held less than $4,000 USD in the account.[45] Taxes are moderate, the income tax has 3 brackets with medium rates (9.3%, 15% and 19.6%), corporate tax is 4% and general sales tax is 7.5%. There are no property taxes. Demographics A deserted island in Palau. Main article: Demographics of Palau Historical populations Year Pop. 1970 11,210 1980 12,116 1990 15,122 2000 21,000 The population of Palau is approximately 21,000, of whom 70% are native Palauans, who are of mixed Melanesian, Micronesian, and Austronesian descent. Many Palauans also have some Asian ancestry, which is the result of intermarriage between settlers and Palauans between the 19th and 20th centuries. Palauans with mixed Japanese ancestry accounted for the largest group, and some also had some Chinese or Korean ancestry. Filipinos form the second largest ethnic group. The official languages of Palau are Palauan and English, except for two states (Sonsorol and Hatohobei) where the local language, along with Palauan, is official. Japanese is also spoken widely amongst older Palauans, and is an official language in the State of Angaur.[46][47] Tagalog is not official in Palau, but it is the fourth largest spoken language.[citation needed] Religion Main article: Religion in Palau The German and Japanese occupations of Palau both subsidized missionaries. Three quarters of the population are Christians (mainly Roman Catholics and Protestants), while Modekngei (a combination of Christianity, traditional Palauan religion and fortune telling) and the ancient Palauan religion are commonly observed. According to the 2005 census[48] 49.4% of the population is Roman Catholic, 21.3% Protestant, 8.7% Modekngei and 5.3% Seventh-day Adventist. There is a small Jewish community in Palau. In 2009 it sent 3 members to the 18th Maccabiah Games. There are also approximately 400 Bengali Muslims in Palau,[49] and recently 6 Uyghurs detained in Guantanamo Bay were allowed to settle in the island nation.[50] Culture This unreferenced section requires citations to ensure verifiability. Main article: Music of Palau See also: Palauan language Society This unreferenced section requires citations to ensure verifiability. Palauan society, much like the island's language, has always been one unique to the island and its people. A very noticeable aspect of Palauan society is that it follows a very strict matrilineal system. Matrilineal practices are seen in nearly every aspect of Palauan traditions, especially in funeral, marriage, inheritance, and the passing of traditional titles. To this day, the Palauan people still hold true to their traditions very seriously. This is very clear in the fact that the traditional government still holds extreme influence over the nation's affairs. In fact, the traditional government has held so much influence, that the federal government has had, on numerous occasions, attempts at limiting its power. Many of these attempts occurred and continue to occur, from 1990 to the present. These attempts, many of which in the form of amendments in the constitution, were put into place because of the corporate sector of the nation, they having felt that the traditional government was encroaching on what they deemed should be free economic zones. One such example occurred in early 2010, where the Idid clan, the ruling clan of the Southern Federation, under the leadership of Bilung, the clan's and Palau's Southern Federation's queen, raised a civil suit against the KSPLA (Koror State Public Lands Authority). In the civil suit, the Idid clan laid claim over Malakal Island, a major economic zone and Palau's most important port, citing claims that went back as far as the German Era. The civil suit, however, ended with the verdict that Idid clan could not use such citations and claims, and resulted in the conclusion that Malakal Island was land that belonged to the KSPLA. Traditional government This unreferenced section requires citations to ensure verifiability. The present day traditional government of Palau is a direct continuation of the ancient traditional government, composed of practices that span thousands of years. In the traditional government, Palau is divided geographically into different categories. At the smallest level of geographic division is the village or hamlet, then the chiefdom (which is now politically referred to as a state), and finally the federation, or alliance of chiefdoms. In ancient times, there were n