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Faroe Islands heads into turbulent waters with first sanctions against Russia

As most of Europe debates what sanctions to impose on Russia, one of its smallest territories, which relies on selling fish to Moscow, is just figuring out where to start.

The Faroe Islands, a self-governing part of Denmark that is not in the EU, on Friday approved legislation to allow sanctions against Russia, more than two months after the Ukraine war began. It will be the first time the islands, with a population of only 53,800, have levied sanctions against any country.

The law excludes measures that could harm fish exports or fisheries agreements with other countries — reflecting the importance of fishing to the Faroes’ economy. But this is likely to strain relations with the UK, which has imposed sanctions on Russia and which shares some fishing grounds with the islands.

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“It’s a sovereign Faroese matter,” said Faroese fisheries minister Árni Skaale. “As a nation, we rely exclusively on fish and relations with neighbouring countries over fisheries. Limiting those opportunities . . . has much greater consequences for us than others realise.”

The Faroes have licensed 20 to 29 Russian vessels to fish blue whiting — a white fish typically used for fish food and fish oil — in the “special area” shared with the UK in each quarter of 2022. A 1999 agreement entitles both nations to grant fishing licences in the shared zone and treat it as separate fisheries jurisdictions.

The UK government, which does not allow Russian vessels in its waters, has said that not revoking the licences is “simply wrong” and it expects the Faroes to take a tougher stance.

Fish makes up more than 90 per cent of Faroese exports, with Russia the single largest buyer, purchasing close to a quarter of all exports in 2021. The government said in a statement that its fisheries agreement with Russia “does not allow” restricting the vessels’ access to the Special Area in 2022.

According to Skaale, breaching the agreement could trigger retaliation with wider implications for the Faroese economy and the sustainable management of the Faroes and Russia’s joint stock of herring.

“There is no simple solution. If we cease all co-operation and communication with Russia [over fisheries], then we completely lose control,” he said.

Russia became an increasingly important market for the Faroes after the EU sanctioned the islands in 2013 for unilaterally raising their own fishing quotas. When Russia later blocked food imports from the EU, Norway and other western nations to retaliate against Ukraine-related sanctions in 2014, Faroese fish exports surged.

“We are more closely aligned with the west now. Previously the EU boycott prevented this. But it doesn’t mean we’ll categorically say yes to everything the EU, Nato and other western countries are doing. In terms of fisheries, we’re most inclined to look to Norway, which is in a very similar position to us,” said the Faroese foreign affairs minister, Jenis á Rana.

Norway, which has several joint fish stocks with Russia in the Barents Sea, has banned most Russian vessels from its ports but has not extended the ban to fisheries.

Faroese officials will scrutinise the EU’s sanction packages to work out which measures can be adopted by the islands, but the reluctance to touch fisheries raises questions over what impact other sanctions would have.

Á Rana acknowledged on Faroese radio that he was not sure if any of the oligarchs and other individuals on the EU’s list, whose travel has been restricted, “would have intended to visit” the islands.

The government’s slow response has attracted criticism from politicians and harvesters’ organisations in neighbouring countries, with one Danish industry organisation describing the Faroese approach as “pirate-like”.

At home, the opposition branded it “immoral, unethical and embarrassing”.

Á Rana has insisted any criticism of the Faroese approach is unfair, as Faroese companies have largely stopped exporting to Russia voluntarily or have had their hand forced by EU sanctions blocking payments.

“The fact that our trade with Russia has ceased — which is so vital for the Faroes, it’s around 25 per cent of our exports — is the equivalent to Denmark suddenly being unable to sell to its top three markets,” he said.

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