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. 

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