On December 26, 2025, Palau signed a memorandum of understanding with the Trump administration agreeing to accept up to 75 “third-country nationals” who have applied for asylum in the United States. In exchange, the U.S. will provide $7.5 million in aid. The agreement was signed at a ceremony by U.S. Ambassador to Palau Joel Ehrendreich and Palau’s Foreign Affairs Minister Gustav Aitaro.
The U.S. Embassy expressed gratitude for Palau’s cooperation in immigration enforcement, a top priority for the Trump administration. As part of the agreement, the U.S. will provide $7.5 million to meet Palau’s public service needs.
In addition to the $7.5 million for public services and infrastructure, the memorandum calls for increased funding in areas such as health, disaster preparedness, financial stability, and law enforcement. The U.S. will also provide $2 million for security issues and $6 million for reforming Palau’s civil service pension plan.
According to a statement from the office of Palau President Surangel Whipps Jr., the agreement allows undocumented immigrants in the U.S. who have not been convicted of crimes to live and work in Palau to help address local labor shortages.
Whipps stated that Palau will review and approve on a case-by-case basis which individuals can enter the country, each person will be screened by a national special task force.
Palau, also known as Belau or Pelew, is located in the western Pacific Ocean, consisting of approximately 340 islands with a total area of 459 square kilometers. It lies between the Philippines and Guam, serving as a gateway for the Pacific to Southeast Asia. Palau is renowned as the top wonder of the underwater world, famous for its marine landscapes, and is a popular diving paradise.
The country declared full independence in 1994 but maintains a Compact of Free Association with the United States, which provides defense and significant financial assistance. Palauans have special rights for visa-free entry into the U.S., while Palau grants the U.S. exclusive strategic use rights to its land and waters. Palau is not a signatory to the 1951 UN Refugee Convention.
Prior to signing this agreement, Palauan lawmakers had rejected similar requests from Washington earlier this year. In late July, the Palau Congress stated it could not accept the U.S. proposal to receive asylum seekers from other countries.
On December 23, U.S. Deputy Secretary of State Christopher Landau discussed the matter of transferring third-country nationals to Palau with Whipps over the phone. Trump stated that these measures are aimed at improving domestic security in the U.S.