Tatiana Valovaya has signed a fish memorandum of understanding with Faroe's Poul Michelsen. (Photo: Arni Gregersen)

Faroese Govt settles deal with Russia, apart from EU sanctions

FAROE ISLANDS
Wednesday, September 19, 2018, 01:40 (GMT + 9)

The Faroese and Russian governments have signed a new memorandum of understanding in a bid to boost trade and cooperation between the two sides amid the European Union’s sanctions on Russia over the issues with Ukraine.

With the deal, which aids Faroese fishermen to boost exports to Russia, the Faroe Islands has become one of the only administrations in Western Europe to refuse to support EU sanctions on Russia, EUobserver reported.

Meanwhile, earlier this year, when Denmark, to which the Faroe Islands still belong, expelled two Russian diplomats as part of a wider European reaction to Russia's poison attack in Britain, the Faroese government made clear the Faroe Islands was not part of these measures.

On the contrary, the Faroeswe government is working hard to boost fish exports to Russia, presently worth some DKK 2.5 billion a year (EUR 335 million) - a staggering sum in the Faroe Islands.

The Faroese economy has grown by 6-8 per cent for the last several years, unemployment has been practically eradicated, and more young people are returning to the islands from abroad. For the first time ever, the population has surpassed 51,000 people.

After several ups and downs in the past few decades, Faroese aquaculture is now growing at a formidable speed. Exports may soon surpass those of the traditional fisheries. (Photo: faroeislands.fo)

Meanwhile, the Danish government seldom speaks out on the matter, squeezed, as it is, between its wish to support the EU sanctions on the one hand and its desire to remain supportive of the Faroe Islands on the other.

The Faroe Islands were never part of the EU and never bound by any sanctions agreed in Brussels.

On the other hand, European sanctions do not prohibit exports of fish to Russia. The measures, first applied in 2014, are first and foremost aimed at individual members of the Russian leadership and at barring Russia's access to foreign capital and military technology.

In retaliation, Russia in August 2014 banned the import of several types of goods from EU countries, foodstuff in particular.

This was how fish came on the agenda in the first place.

In Norway, salmon-farmers lost all sales of fresh salmon to Russia. Norway, which is not an EU member but which was supportive of the EU sanctions, produces more salmon than any other nation, but from 2014 Faroese salmon replaced all of Norway's exports of fresh salmon to Russia.

A deft political move may have paved the way for the Faroese fish boom.

In the summer of 2014, the head of the Faroese government, Kaj Leo Holm Johannesen, travelled to Moscow and made it clear that the Faroe Islands did not support the EU sanctions.

Russia, in turn, announced that imports from the Faroe Islands were not covered by Russia's ban on fish imports from the EU.
Today, Russia does still not buy fresh fish from the EU, Norway, or Iceland, while the Faroese are making good money by filling the gap.

The Faroese Government points out that if the Faroe Islands backed the sanctions and then lost its access to the Russian market, it would hurt the Faroese economy to an unreasonable extent.

"We would go bankrupt the day after. We don't have any product we can sell except fish. Also, we have fisheries agreements with Russia in the North Atlantic that have to be renewed every year. It would have untold consequences for us if that relationship went sour," the government stated.
 

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