Commission Established to Oversee Transition of Northern Mariana Islands

Washington D.C. - In a significant step towards self-governance, the United States has established a commission to oversee the transition of the Northern Mariana Islands from its current status as a Trust Territory of the Pacific Islands to a new political status.

Commission Structure and Responsibilities

The Commission will consist of seven members, with at least four being citizens of the Trust Territory of the Pacific Islands who have been living in the Northern Mariana Islands for at least five years. The commission’s role is to make recommendations to Congress on how to apply United States laws to the territory and ensure a smooth transition.

Timeline for Recommendations

The Commission will submit its final report and recommendations within one year after the termination of the Trusteeship Agreement, with interim reports and recommendations made available before that time to facilitate the transition process.

Considerations in Formulating Recommendations

In formulating its recommendations, the Commission will take into account the potential impact of each law on local conditions in the Northern Mariana Islands, as well as the policies embodied in those laws and the provisions and purposes of this Covenant. The United States will bear the cost of the Commission’s work, which is expected to be a vital step towards self-governance for the people of the Northern Mariana Islands.

Taxation and Revenue

Income Tax

The Covenant has established a new tax regime for the Northern Mariana Islands. The income tax laws in force in the United States will apply to the territory as a local territorial income tax, with individuals filing only one income tax return for their income.

Additional Taxes and Rebates

The Government of the Northern Mariana Islands may also impose additional taxes and provide for rebates on taxes received, but these powers are limited to taxes on income derived from sources within the territory. The Covenant also establishes customs duties and excise taxes, with the Government of the United States seeking favorable treatment for exports from the territory.

Trade and Commerce

Customs Territory

The Northern Mariana Islands will not be included in the customs territory of the United States, but may levy duties on goods imported into its territory and impose duties on exports. Imports from the territory into the United States customs territory will be subject to the same treatment as imports from Guam.

In a significant development for the social security system in the Northern Mariana Islands, the Covenant has established a new fund to administer social security benefits for residents of the territory. The Trust Territory Social Security Retirement Fund attributable to the Northern Mariana Islands will be transferred to the United States Treasury, where it will be held in trust and administered according to the laws of the Trust Territory of the Pacific Islands.

Supplemental Funding

The United States will supplement this fund if necessary to ensure that persons receive benefits comparable to those they would have received under the laws of the Trust Territory.