The Central Bank will oversee and select the members of the Sharia Authority board. Ryan Carter / The National
The Central Bank will oversee and select the members of the Sharia Authority board. Ryan Carter / The National

UAE Cabinet approves Sharia Authority launch



The UAE Cabinet on Sunday approved the launch of a new Sharia Authority, a national regulator to set standards for Islamic finance products, according to the state news agency Wam.

The board will oversee the Islamic financial sector, approve financial products and set rules and principles for banking transactions in accordance with Islamic jurisprudence on finance.

The Central Bank will oversee and select the members of the new board. Financial institutions will contribute to the running of the board by paying fees to the Central Bank.

Currently, individual financial institutions run their own Sharia boards, which are groups of scholars who decide on whether individual products are consistent with Islamic jurisprudence on financial affairs.

The national regulator will not replace the Sharia boards of individual banks, but will be approve new products that have already received approval from individual Sharia boards.

Analysts have long pointed to the absence of a single regulator as an obstacle to the development of the Islamic finance sector in the UAE.

The lack of a national board means that disagreement on Sharia standards persists, as individual Sharia boards disagree on the Sharia-compliance of particular products.

Individual banks may market the same products differently, while some UAE banks use financial structures to underpin products that are not approved by Sharia scholars in other jurisdictions.

In a report published last year, Deloitte said that a national Sharia board could “reduce future disputes and increase transactions”.

Oman launched a national Sharia board in 2012, while Bank Negara Malaysia, the Malayasian central bank an​d the world’s largest individual issuer of sukuk, launched its national Sharia board in 1997.

The UAE board, which is modelled on the Malaysian board, will have “a wide remit when it comes to approving products”, and should make “customers’ lives a bit easier” by ensuring consistent Sharia standards across all products, a person familiar with the government’s plans said.

“It’s one of the key pillars of the Dubai Islamic Economy Strategy, and it has been a Central Bank priority since 2013, when work began on this.”

abouyamourn@thenational.ae

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A new relationship with the old country

Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates

The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:

ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.

ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.

ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.

ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.

IN WITNESS WHEREOF the undersigned have signed this Treaty.

DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.

Signed

Geoffrey Arthur Sheikh Zayed

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