The Constitutional Status of the Faroe Islands

The Faroe Islands are vested with internal and external autonomy within the Realm of the Kingdom of Denmark.

The autonomy of the Faroe Islands was established by the Faroe Islands Home Rule Act of 1948 - Act no. 137 of 23 March 1948.

The Home Rule Arrangement established the Faroe Islands as an autonomous nation within the Danish Kingdom. The main objective of the arrangement was to facilitate the transfer of competences over certain fields to Faroese authorities.

Since the implementation of the Home Rule Act, the Faroe Islands have assumed legislative and administrative responsibility in a wide range of areas, such as the conservation and management of marine resources, protection of the environment, continental shelf resources, external trade relations, financial policy, business regulation, taxation and customs, energy, transport communications, emergency preparedness, social security, culture, education and research.

The Home Rule Arrangement confirmed that the Faroe Islands are a separate jurisdiction within the realm. This means that Danish legislation in regard to areas that have not been assumed by Faroese authorities, including treaties to which Denmark adopts or accedes, require explicit consent from Faroese authorities in order to extend to the jurisdiction of the Faroe Islands.

The scope and procedures for the trans­fer of legislative and administrative powers to the government of the Faroe Islands are regulat­ed by the Assumption Act of 2005 - Act no. 578 from the 24th of June, 2005.

According to the Assumption Act the Government of the Faroes has unilateral authority to assume legislative and executive competences in the jurisdiction of the Faroe Islands in all matters not already under Faroese authority, with the exception of the constitution, citizenship, the su­preme court, foreign, security and de­fence policy, and monetary and curren­cy matters. Fields of responsibility not already assumed the Government of the Faroes remain under the authority of the Danish Government and Constitution. These include the police, the prison and probation service, law of legal capacity, immigration and border control, financial regulation and aviation supervision.

The Faroese authorities gain legislative and administrative authority over each field they take over, and are also responsible for the financial cost associated with said fields.

The Danish Government grants an annual subsidy to the Faroe Islands, commonly called the Block Grant. In 2001 it was reduced from 982 million DKK to 616 million DKK. It increased slightly in 2012, as a result of index-linking, and is currently frozen at 642 million DKK (86 million Euro). The subsidy makes up 2% of the current Faroese GDP, compared to 11.2% in 2000, and it funds 9.5% of the national budget in 2020, compared to 28,7% in 2000.   

The Foreign Policy Act
The Foreign Policy Act of 2005 provides for Faroese autonomy and competences in foreign relations.

According to the 2005 Act, the Government of the Faroes may enter into negotiations and agreements with States and international organizations, on behalf of the Realm, in regard to fields the competence of which is assumed by Faroese authorities.

The 2005 Act does not apply to agreements covering defense and security, nor to accession protocols to international organizations where Denmark is a member.

Reinforcing foreign policy cooperation, the Danish and Faroese Governments signed a joint declaration in 2005 - the so-called Fámjin Declaration - regarding the involvement of the Faroe Islands in foreign and security policy. According to the Declaration, the Faroese authorities are to be involved in the relevant international negotiations regarding matters of special interest to, or which impact, the Faroe Islands.

The Faroese authorities are also to be consulted prior to the ratification of any international agreements resulting from negotiations they were involved with, as part of the Fámjin Declaration, or which have a particular importance to the Faroe Islands.