Under the auspices of the Ministry of Economy, the conference on "Islamic Financial Transactions between Legislation and Practice" was held on 21-22 December 2023. The inauguration ceremony, led by Mr. Bin Touq, sheds light on the substantial efforts of the Emirati legislator in formulating a pioneering legislative framework for Islamic financial transactions.
Mr. Bin Touq emphasized the significance of the conference as a distinguished platform to showcase the exceptional national endeavors aimed at codifying the jurisprudence of Islamic financial transactions and fortifying support for the Islamic economy.
His Excellency Abdullah bin Touq Al Marri, UAE’s Minister of Economy, inaugurated the international conference on "Islamic Financial Transactions between Legislation and Practice Application" in accordance with Federal Law No. 50 of 2022 concerning commercial transactions. The conference was organized by the International Islamic Center for Reconciliation and Arbitration (IICRA) and is scheduled to span Thursday and Friday, 08-09 Jumada al-Akhir 1445 AH, corresponding to December 21-22, 2023, at the Sofitel Dubai Hotel. The Ministry of Economy proudly sponsors this event.
In his inaugural address, His Excellency Bin Touq emphasized the UAE's steadfast commitment to fostering a competitive environment for institutions within the Islamic economy. This commitment is demonstrated through the launch of pioneering initiatives and strategies, coupled with the development of a sophisticated legislative and technological framework for the Islamic economy. These efforts have significantly bolstered the UAE's standing as a preeminent hub for Islamic economy under astute leadership.
His Excellency articulated, "The 'Islamic Financial Transactions between Legislation and Practice” conference stands as a prominent and crucial platform to showcase the extraordinary national endeavors led by the Emirati legislator in the meticulous codification of the jurisprudence of Islamic financial transactions. It also serves as a cornerstone in fortifying the Islamic economy, a vital tributary in the overarching mission to elevate the growth of the national economy and enhance its competitiveness regionally and globally."
His Excellency Bin Touq conducted a comprehensive review of the pivotal themes enshrined in Federal Decree Law No. 50 of 2022 pertaining to commercial transactions. This groundbreaking legislation is designed to establish an innovative framework for Islamic financial transactions and Islamic banking within the country. A key highlight is the introduction of the Decree Law specifically tailored for commercial transactions involving Islamic financial institutions—an unprecedented codification aimed at regulating contractual relations, fortifying transactional stability, safeguarding parties involved, and standardizing Islamic commercial transactions through legislative texts rather than reliance on fatwas and rulings issued by specialized bodies.
The legislation also incorporates distinct provisions for certain types of contracts and obligations relevant to Islamic financial institutions, such as commitment contracts, installment sales, Murabahah, and financing through Istisna’a.
His Excellency Abdullah bin Touq underscored noteworthy indicators and achievements solidifying the UAE's global leadership in the Islamic economy. Notable among them is the 8% growth experienced by Islamic finance in the preceding year, surpassing traditional banks by 3%. This remarkable success is attributed to the sustained surge in public demand for Islamic products and the extensive reach of distribution networks. The UAE's prominence as a major center for Islamic finance is reaffirmed by its representation of 29% of total banking sector financing at the close of 2022, as indicated by a report from the renowned global "Fitch Ratings". Furthermore, the country maintained its third place ranking globally for the third consecutive year in the Global Islamic Economy Index 2022.
His Excellency highlighted the integral role played by the Islamic banking sector within the Emirates' financial landscape, constituting 23% of the total banking assets, amounting to 845 billion dirhams in 2022. Of this, Islamic windows accounted for 25%, equivalent to 214 billion dirhams, alongside contributions from the Takaful sector and sukuk issuances.
In conclusion, His Excellency reiterated the commitment to ongoing national efforts, affirming the dedication to developing economic policies and legislation that enhance the financial system of the Islamic economy. These endeavors aim to propel the country to new heights of leadership and progress, thereby contributing significantly to the sustained growth and resilience of the national economy.
Professor Jassim Ali Salim Alshamsi, Chairman of the IICRA’s Board of Trustees, extended sincere appreciation to His Excellency the Minister of Economy for the esteemed sponsorship and personal presence at this distinguished event. He emphasized that such involvement reflects the profound commitment of the wise leadership to advancing the Islamic economy, which is anticipated to encompass total financial assets worldwide amounting to $3.8 trillion by 2023, with Islamic banks serving a clientele of one hundred million.
Furthermore, Professor Alshamsi conveyed gratitude to all entities contributing to the organization of the conference. This included the Institute of Training and Judicial Studies, the Ministry of Justice represented by Director General Counselor Dr. Muhammed Mahmoud Al Kamali, the Sharjah Center for the Development of Islamic Economy led by Director Dr. Yasser Hassan Al Hosani, and the generous sponsorship of the Abu Dhabi Islamic Bank (ADIB) Group. His Excellency Professor Dr. Mohammad Abdul Rahim Sultan Al Olama, Chairman of Internal Sharia Supervision Committee at Abu Dhabi Islamic Bank (ADIB) Group, represented the bank at the conference. He emphasized the significance of the event, highlighting that the bank's sponsorship aligns with its broader commitment to various development and community activities.
Dr. Rami Sulaiman Abudaqqa, General Secretary of IICRA, provided an introductory overview of the conference. He elucidated that the event is an integral component of the IICRA’s activities, focusing on the legitimate and technical legal aspects of the Islamic economy. Additionally, he emphasized the IICRA main ’s primary function, centered around the resolution of disputes through institutional reconciliation and arbitration in accordance with Shari’ah Provisions.
He further stated, "The ongoing codification efforts are met with great enthusiasm by professionals within the Islamic financial industry who find it crucial for effectively managing their transactions and legal positions. Since the inception of its activities, the Center has consistently advocated for reinforcing codification efforts, aligning with the recommendations emanating from the Sixth Forum of Legal Professionals in the Islamic Financial Industry. This forum, titled 'Codifying Islamic Financial Transactions and Standardizing Contracts,' was convened by the Center in Dubai in 2014."
The General Secretary underscored the significance of the recently enacted law, particularly its pivotal Chapter Six, asserting that the Emirati legislator has marked a significant milestone in Arab and Islamic legislation concerning the codification of Islamic financial transactions. He provided an overview of the conference's agenda, highlighting the participation of distinguished speakers with profound expertise in institutional activities within Islamic finance. The inaugural day of the conference will feature a comprehensive examination of the legal provisions encapsulated in Chapter Six of the law. This session will delve into the intricate details of Islamic financial transactions, encompassing Istisna’a, Aalam, Leasing, Contracting Promise, installment Sales, and Murabaha.
Looking ahead to the second day of the conference, the agenda includes specialized workshops facilitated by qualified trainers. These workshops will focus on Islamic financial transactions and arbitration, serving as an effective mechanism for the resolution of disputes within the realm of Islamic finance.
By reviewing the opinions and suggestions specialized conference participants, we identified some recommendations that the conference seeks to come up with, which are as follows:
It should be noted that the IICRA is an independent international institution that is considered one of the most important infrastructure institutions for the Islamic financial industry and is one of its kind hosted in the United Arab Emirates, and provides its services to the Islamic financial industry in the entire world.