- Moody's Investors Service has placed the Faroe Islands' Aa3 issuer rating on review for downgrade after the European Union voted in favour of imposing trade sanctions on its fishing exports.

This follow ongoing disputes between the EU and the Faroe Islands over fishing quotas, which escalated in March when the Faroe Islands unilaterally set its own 2013 quota for herring and mackerel.

The EU has stated that a final decision on the proposed sanctions will be taken this month by the European Commission. At present, the extent of the potential sanctions is unknown. However, if implemented, sanctions could include restrictions on Faroese herring and mackerel exports to the EU.

Moody's says a substantial part of the country's economic output is directly related to the fishing industry. Fish products account for 91% of total Faroese exports and last year 67% of Faroese exports went to EU countries.

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