Danish–Icelandic Act of Union

The Danish–Icelandic Act of Union, a December 1, 1918 agreement signed by Iceland and Denmark, recognized Iceland as a fully sovereign state – the Kingdom of Iceland – freely associated to Denmark in a personal union with the Danish king. Iceland established its own flag, declared its neutrality and asked Denmark to represent its foreign affairs and defense interests. The Act would be up for revision in 1940 and could be revoked three years later if agreement was not reached.

Historian Gunnar Karlsson argues that Denmark was willing to grant Iceland sovereignty for two reasons. First, the self-determination of peoples had grown in importance with the end of WWI. Second, Iceland had shown that it was capable of governing its own affairs (starting with Home Rule in 1904) and relations with other states (during WWI when Iceland was cut off from Denmark).

On June 17, 1944, during the occupation of Denmark by Nazi Germany, while itself occupied by the armed forces of the United States, Iceland severed the ties to the Danish king and declared itself a republic.