The Faroe Islands have home rule under the Danish crown. We have our own parliament, Prime Minister, flag, language, banknotes, football team and even international direct dialling code (+298; not +45 which is for Denmark).
The Faroese parliament decides all
matters except policing, justice, defence and foreign affairs which remain
under Danish control.
Although Denmark is a member of the European
Union and part of the EU’s Schengen agreement regarding the free movement of
goods and people, the Faroe Islands remain outside both the EU and Schengen.