After more than a decade of negotiation, the Marshall Islands and the United States signed a Compact of Free Association on June 25, 1983.

Under the Amended Compact, the U.S. will provide the Marshall Islands at least $57 million every year until 2023, including contributions to a jointly managed Trust Fund.

A Joint Economic Management and Financial Accountability Committee (JEMFAC) composed of representatives of both governments will ensure that Compact assistance funds are spent effectively.

The original agreement allowed the United States continued use of the U.S. Army Garrison Kwajalein Atoll (USAG-KA), home to the Ronald Reagan Ballistic Missile Defense Test Site, until 2016.

Another major subsidiary agreement of the original Compact provides for settlement of all claims arising from the U.S. nuclear tests conducted at Bikini and Enewetak Atolls from 1946 to 1958.

Postal Service, the Small Business Administration, and the Federal Emergency Management Agency operate programs or render assistance to the Marshall Islands.

[6] On 28 April 2015 the Iranian navy seized the Marshall Island-flagged MV Maersk Tigris near the Strait of Hormuz.

The ship was reported to be under the control of the Iranian Revolutionary Guard according to the Pentagon amid escalating tensions in the region due to the intensifying of Saudi-led coalition attacks in Yemen.