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Christian X, the King of Denmark, ruled Iceland until 17 June 1944. During his royal visit to Iceland in 1921, King Christian X issued the royal decree founding the Icelandic Order of the Falcon. When Iceland became a republic, new statutes were incorporated for the Order on 11 July 1944. The Republic of Iceland replaced the King by an elected President of Iceland who is the designated Grand Master of this Order. It may be awarded to both Icelanders and citizens of other countries for achievements in Iceland or internationally. A five-member council makes recommendations on awards to the Grand Master, who then grants the award. However, the Grand Master may award the Order without recommendations from the Order Council. The Grand Master and the Chairman of the Order Council then sign the Letters Patent, which is given to those who receive the awards.
Grand Cross sash and sash badge
Knight's Crosses on current suspension and older crown suspension
The collar is gilded metal, consists of links bearing the Icelandic coat-of-arms and blue-enamelled discs bearing the white falcon.
The badge consists of a gilt cross, enamelled in white, with a blue-enamelled central disc bearing the white falcon.
The star is a silver, eight-pointed star. For the Grand Cross class it has the badge of the Order superimposed upon it. For the Grand Knight with Star class it has a blue-enamelled central disc bearing the white falcon.
The ribbon is blue with white-red-white border stripes. It is worn on the left shoulder.
Collar with Grand Cross – wears the badge on a collar plus a star on the left chest;
Grand Cross – wears the badge on a sash on the left shoulder, plus a star on the left chest;
Grand Knight's Cross with Star – wears the badge on a necklet, plus a star on the left chest;
Grand Knight's Cross – wears the badge on a necklet;
Knight's Cross – wears the badge on a chest ribbon.
If a holder is promoted to a higher rank, the lower rank's insignia must be returned. The insignia is retained during the recipient's lifetime, but it must be returned to the Icelandic Government upon his or her death.
^Hieronymussen, Poul Ohm; Lundø, Jørgen, eds. (1968). Eurooppalaiset kunniamerkit värikuvina [Europæiske ordner i farver] (in Finnish). Translated by Karnila, Christer. Porvoo: WSOY. p. 101. OCLC466954328.