UAE unveils initiative to build global framework for Islamic finance

The United Arab Emirates, on Wednesday, launched a new initiative to create a unified global legal and legislative framework for the Islamic finance sector. Launched by the UAE Ministry of Finance in partnership with the Islamic Development Bank, IDB, and the Dubai Islamic Economy Development Centre, DIEDC, the global legislative framework is set to enable […]

The United Arab Emirates, on Wednesday, launched a new initiative to create a unified global legal and legislative framework for the Islamic finance sector.

Launched by the UAE Ministry of Finance in partnership with the Islamic Development Bank, IDB, and the Dubai Islamic Economy Development Centre, DIEDC, the global legislative framework is set to enable the Islamic economy to expand its reach and responds to calls for greater standardization within the sector.

A memorandum of understanding, MoU, has already been signed between DIEDC and the Accounting and Auditing Organisation for Islamic Financial Institutions, AAOIFI, enabling DIEDC to use AAOIFI’s standards as a reference in building the international legal framework with the guidance of the Ministry of Finance and IDB.

Commenting on the initiative, UAE’s Finance Minister Sheikh Hamdan Bin Rashid Al Maktoum said: “The Islamic finance sector will benefit greatly from a unified international legal and legislative framework.

“After its formulation and subsequent approval by internationally accredited relevant authorities, it will be formally established as a legal and legislative framework that serves as the basis for a new international treaty.”

He said DIEDC was exploring new ways of advancing the Islamic economy sector globally.

“There is today an urgent need in the Islamic finance sector to accelerate growth and reduce discrepancies in practices across the globe. As part of this priority, the development of a general framework that standardizes rules and regulations will be a major achievement for Islamic finance and for the Islamic economy in general,” said Sultan bin Saeed Al Mansouri, Minister of Economy and Chairman of DIEDC.

Al Mansouri added: “Enabling and standardizing legislations provides the guarantees and trust needed to build smoother and stronger business relations. New courts are expected to be established worldwide to settle Islamic financial disputes according to the new unified legislative framework.” (Saudi Gazette)