The Faroe Islands is archipelago in the North Atlantic, about halfway between Norway and Iceland. It is approximately 320 kilometres from the northwest of Scotland. The population of the Faroe Island is 50,000.

Between 1035 and 1814, the Faroes were part of the hereditary Kingdom of Norway. An 1814 treaty granted Denmark control of the Islands (together with Greenland and Iceland). The Faroe Islands are a self-governing nation within the Kingdom of Denmark. They are not part of the European Union and are not within the customs territory of the European Union.

In 1973 the Faroe Islands declined to join Denmark (and Greenland) in entering the European Economic Community. The Faroe Islands has free trade agreements with the EU and three EFTA countries Norway, Iceland, and Switzerland.

EU Status

The four freedoms of goods, people, capital, and services do not apply to the Faroe Islands. Danish nationals residing in the Faroe Islands are not to be considered as Danish within the meaning of the treaties. They are not citizens of the European Union. The Faroe Islands are not part of the Schengen area. Unlike Greenland, they are not Special member state territories and the European Union and are not parties to the OCT Agreement.

The relations of the Faroe Islands with the EU are largely governed by Fisheries Agreement 1977, revised in 2013 and a Free Trade Agreement in 1991 revised in 1998.

The Faroe Islands has a free trade agreement with three EFTA countries Norway, Iceland, and Switzerland

The four freedoms of goods, people, capital, and services do not apply to the Faroe Islands. Danish nationals residing in the Faroe Islands are not to be considered as Danish within the meaning of the treaties. They are not citizens of the European Union. The Faroe Islands are not part of the Schengen area. Unlike Greenland, they are not Special member state territories and the European Union and are not parties to the OCT Agreement.


The EU  Faroe Islands Free Trade Agreement applies to products within chapters 25 to 97 (non- agricultural) of the harmonised system of classification with exceptions. No new customs duty on imports is to be introduced in trade between the EU and Faroe Islands.

The EU abolished customs duties on import from the Faroes. The Faroes abolished customs duties on imports from the EU. Import duties of a fiscal nature were abolished. The Faroes may place an import duty of a fiscal nature or a fiscal element of an import duty with an internal tax.

No new charge having an effect equivalent to customs duty shall be introduced in trade between the EU and the Faroes. Charges having an equivalent effect on trade between the EU  and the Faroes were to be abolished.

Customs duties and charges having an equivalent effect on exports between the  EU and the Faroes are prohibited. A protocol defines the concept of originating products and makes provision for administrative co-operation.

No new quantitative restrictions on exports or measures having equivalent effect were to be introduced in trade. The contracting parties were to r abolish quantitative restrictions on imports.

The EU reserves the right to modify the arrangements applicable to certain petroleum products. In this event, the EU  shall take due account of the interest of the Faroes and shall inform the joint committee.


The contracting parties declare their readiness to foster, in so far as agricultural policies allow, the harmonious development of trade in agricultural products to which the agreement does not apply.

The parties are to apply their rules in veterinary health matters in a nondiscriminatory fashion and so not introduce any new measures that have the effect and unduly obstructing trade. The parties were to examine under the conditions set out in the agreement, any difficulties that measure in their trade in agricultural products and shall endeavour to seek appropriate solutions.

The Faroe’s home government to take measures to ensure that correct application of the reference price fix or to be fixed by the EU per Protocol I where special provisions are applicable to the import of certain agricultural products listed in that protocol one.

Protocol 1 concerns tariff treatment and arrangements applicable to fresh fish. Protocol 2 deals with certain products obtained by processing agricultural products. There are provisions for import levies on certain agricultural products to equalise with CAP levels. There are provisions for abolishing by of each of the duties on imports of processed agricultural products as defined.

Protocol 4 contains further special provisions applicable to the important certain agricultural products.

There is a protocol in respect of veterinary matters. The Faroe island agreed to apply EU veterinary rules in respect of a range of matters in on animal health, health protective matters hormones, imports from third countries, inspection, animal identification, mutual assistance, animal welfare, zootechnics. There are provisions for checks and controls.

Faroe Islands accepts live animals and products originating in the EU under conditions applicable to intra-EU trade. The Faroe Islands undertake to apply the relevant EU rules in respect of the import live animals and animal products from third countries. They undertake to send to EU, only live animals and products in conformity with the condition set out in the relevant decision.

Customs Cooperation

There are provisions for mutual assistance between the parties on customs matters.

Protocol 3 deals and detail with proof of origin and the relevant procedures. There are provisions for a certificate of origin issued by authorities or a self-declared declaration by an approved exporter of consignments less than a minimum value (€6,000 euro).

There are provisions for mutual assistance between the administrative authorities in customs matters, including spontaneous assistance, assistance on request execution of requests exchange of information etcetera.

Free Trade Commitments

The parties reaffirmed their commitments to grant each other the most favourite nation treatment in accordance with GATT 1994. They did not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade.

The parties shall refrain from any measure or practice of an internal fiscal nature which directly or indirectly discriminates between products and one party and like products originating from the territory of the other. Payments relating to trade in goods are to be free of any restrictions.

The agreement does not preclude  prohibitions or restrictions on imports, exports or goods in transit justified on grants of public morality, law and order of public security protection of life and health of humans., animals or plants, the protection of national treasure of artistic historic or archaeological value, protection of industrial and commercial property or  rules relating to gold and silver. Such measures must not constitute in means of arbitrary discrimination or disguised restriction and trade between the parties.

There are provisions for the application of EU competition law in respect of unlawful agreements, abusive of a dominant position and state aid.

Safeguarding Measures

There are provisions for safeguarding measures if there is an increase in imports of a given product which is likely to be seriously detrimental to any production activity carried on in the territory of one of the contracting parties. There are provisions where there is a disturbance in the economy or difficulties arise due to deterioration in the economic situation of a region.

The principles of the relevant WTO agreements apply. There are provisions for measures in accordance with the procedures set out in the agreement.

There is a procedure for the imposition of measures on any of the above bases. The  party is to supply the  joint committee with relevant information required for thorough examination of the position. In the selection of countermeasures, priority must be given to those which least disturb the functioning of the agreement. The joint committee is to agree or take a decision in relation to the matter.


The agreement established  a joint protocol for the administration of the agreement and to ensure its proper implementation. For the purpose of implementation of the agreement, the contracting parties are to  exchange information and hold joint consultations within the joint committee. The committee adopts its own procedure. It proceeds by mutual agreement. It consists of representatives of the parties.

Each contracting party, in turn, presides  over the joint committee in accordance for arrangements in the rule of procedures. They  may establish working parties.

There are different provisions for each of the various circumstances above that  may arise (failure to undertake obligations breach of competition laws increase in imports justifying  safeguarding measures anti-dumping / serious disturbance).In each case, the ultimate sanction is that tariff concessions may be withdrawn in proportionate and equivalent amounts.

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