National and Global Islamic Financial Architecture:
Prolems and Possible Solutions for the OIC Member Countries
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(Wilson 2011). The amended Banking Law No. 88 of 2003 had no provisions for Islamic
finance (Wilson 2011).
The capital markets are governed by the Capital Markets Law (Law No. 95 of 1992). The law
recognizes ‘bonds, financial notes and other securities’ as instruments that can be listed and
traded in Egyptian capital markets. There are no specific clauses on Islamic securities or sukuk
in this law. Similarly, the Regulation for the Law of the Control and Supervision of Insurance
and its Amendments (Law No. 10 1981, amended Law No. 91 1995 and Law No. 118 2008)
governs the insurance industry. There is no mention of takaful in these laws.
In capital markets, a law relating to sukuk was passed in April 2013, but it was not
implemented (Tan 2015). In January 2014, the Egyptian Financial Supervisory Authority
(EFSA) announced plans to cancel the Sukuk law replacing it with a chapter in the securities
law. However, in May 2014, it was reported that Sukuk law would be reconsidered again by the
regulator and the Central Bank with the possibility of technical revisions put forward (IFN
2014).
Tax regimes and impact on Islamic finance
The tax regime for Islamic finance is not clearly defined in the Egyptian income tax law (Amin
et. al. 2013). While there is no explicit tax law in Egypt specifically to facilitate Islamic finance,
the aim of the Egyptian tax authority is to ensure that Shariah compliant financial products are
taxed in a way that is equivalent to conventional banking products (Amin et. al. 2013). Thus,
Islamic financial products are taxed in a way that makes them neither advantageous nor
disadvantageous compared to their conventional counterparts.
Dispute Settlement/Conflict Resolution Framework and Institutions
Despite having Shariah judicial systems, the use of Islamic laws in Egypt are limited to
conventional specific areas of law such as family laws, marriage and inheritance (Saleh 2011).
Being commercial cases, disputes related to Islamic finance are tried in the civil courts that use
the national codes and laws to adjudicate the cases.
The Cairo Regional Centre for International Commercial Arbitration (CRCICA) is the arbitration
institution in Egypt for settling any conflict (Lawrence 2012). CRCICA applies the Egyptian
Law of Arbitration which is based on UNCITRAL Model Law of 1985 for adjudicating the
disputes. The total number of cases filed with CRCICA was 72 in 2013 and 74 in 2014 (CRCICA
2014). However, most of the disputes were not related to the financial sector with only 12% of
the cases being related to lease agreements. There was no indication of dealing with cases
related to Islamic finance.
Bankruptcy and Resolution of Banks
There are primarily three laws that govern bankruptcies in Egypt. The first of these is Trade
Law No. 17 of 1999, the provisions of which dictate the principles and processes to follow in
relation to bankruptcy. The second of these is Law No. 120 of 2009, endowing the recently
created economic courts with exclusive judicial competence to adjudicate bankruptcy cases.
And the third one of these is criminal law (found in the Egyptian Criminal Code), which – upon
the finding of certain elements such as bad faith or fraud (or both) – allows for the filing of