Canada and Denmark on Tuesday ended their long-running “war” over a tiny uninhabited outcrop in the Arctic that has been waged with flags and good-natured gifts.
The two sides formally announced a deal to split Hans Island and effectively create the first land border between Canada and Europe at a signing ceremony in Ottawa with Canadian and Danish foreign ministers.
Dividing up the kidney-shaped island and resolving the 49-year benign impasse was held up as a model for peacefully resolving territorial disputes.
“The Arctic is a beacon for international co-operation, where the rule of law prevails,” Canadian Foreign Minister Melanie Joly told journalists.
“As global security is being threatened, it's more important than ever for democracies like Canada and Denmark to work together, alongside indigenous peoples, to resolve our differences in accordance with international law.”
The waggish row over Hans Island, measuring 1.3 square kilometres and situated between Ellesmere and Greenland, dated back to 1973, when a marine boundary was drawn between Canada and Greenland, part of the Danish kingdom.
Danes and Canadians have visited the rock by helicopter over the past decades to lay claim to it, leading to diplomatic protests, online campaigns and even a Canadian call to boycott Danish pastries.
During those ministerial visits, each side would plant a flag and leave behind a bottle of whiskey or schnapps for the other to enjoy, along with comical notes.
“Many have called it the whiskey war. I think it was the friendliest of all wars,” Ms Joly said of the territorial dispute — which had drawn in no less than 26 foreign ministers over the decades — at a news conference with her Danish counterpart Jeppe Kofod.
Mr Kofod said that its resolution, however, comes at a time when “the ruled-based international order is under pressure” and democratic values “are under attack.”
“We see gross violations of international rules unfold in another part of the world,” he said, alluding to the war in Ukraine.
“In contrast, we have demonstrated how long-standing disputes can be resolved peacefully by playing by the rules,” Kofod said, adding that he hoped Canada and Denmark's experience will “inspire other countries to follow the same path.”
“This sends a strong signal: diplomacy and the rule of law actually works, and that great result can be achieved by following the rules.”
As they exchanged bottles on Tuesday, Ms Joly and Mr Kofod laughed off suggestions that Canada might join the EU now that the two share a land border.
Ms Joly quipped that a Canadian singer would surely enter the next Eurovision Song Contest, while Mr Kofod offered: “Welcome Canada to the European continent!”
Snow-covered Hans Island is uninhabitable, but the onset of global warming is bringing more ship traffic to the Arctic, and opening it up to fishing and resources exploration — although maybe not in the area of the island.
Arctic expert Michael Byers noted that “the island is so incredibly remote as to make it uneconomical to contemplate any serious activity there.”
Putting off resolution of this unusual territorial dispute, however, made for good political theatre in both countries, flaring up before elections.
“It was an entirely risk-free sovereignty dispute between two Nato allies over an insignificant, tiny island,” Mr Byers said.
Denmark had also feared that losing the ownership battle would undermine relations with Greenland, while Canada worried that a loss would weaken its negotiating position in a more consequential dispute with the United States over the Beaufort Sea, in far north-western Canada, believed to be rich in hydrocarbons.
More recently, Canadian Prime Minister Justin Trudeau “has not made Arctic sovereignty part of his brand,” in contrast to his predecessor, Mr Byers said. “So that reduced the temperature, at least from our side.”
“But most importantly, Russia invaded Ukraine, and that created an opportune moment to tell the world that responsible countries settle territorial disputes in a peaceful way,” he said.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Favourite player: Franz Beckenbauer
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Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
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What are the awards? They honour anyone who has made a contribution to life in Abu Dhabi.
Are they open to only Emiratis? The awards are open to anyone, regardless of age or nationality, living anywhere in the world.
When do nominations close? The process concludes on December 31.
How do I nominate someone? Through the website.
When is the ceremony? The awards event will take place early next year.
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Age: 30
Favourite book: The Power of Habit
Favourite quote: "The world is full of good people, if you cannot find one, be one"
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Favourite colour: Blue