Within its EEZ, a nation may regulate fisheries and scientific research and develop other economic efforts. The UN's Food and Agriculture Organization estimates more than half of highly migratory sharks are overexploited or depleted.
Toribiong said a recent flyover by Australian aircraft showed more than 70 vessels fishing Palau's waters, many of them illegally.
"We'll do the very best we can, given our resources," he said. "The purpose of this is to call attention to the world to the killing of sharks for commercial purposes, including to get the fins to make shark fin soups, and then they throw the bodies in the water."
Tourists go to Palau for its spectacular diving in the tropical waters, dramatic coral and rich marine life. The remote Pacific nation recently made global headlines when it agreed to President Barack Obama's request to take a group of Uighurs — Turkic Muslims from China's far western Xinjiang region — as part of plans to close the Guantanamo Bay detention center.
Palau is one of the world's smallest countries, with some 20,000 people scattered over 190-square mile archipelago of lush tropical landscapes in the Western Pacific.
Its shark sanctuary will shelter more than 135 Western Pacific species of sharks and rays considered endangered or vulnerable, or for which there is not enough data to determine how the species is faring.
"Palau has basically raised the bar for the rest of the world for shark conservation," says Matt Rand, director for global shark conservation for Washington-based Pew Environment Group, an advocacy organization.