RUSSIA - Russian-Led Development Bank Plans to Expand Islamic Financing

www.bloomberg.com - Eurasian Development Bank, a Russian-led lender backed by six former Soviet republics, wants to expand Shariah-compliant financing after helping arrange a deal last year, Chief Executive Officer Igor Finogenov said.

“Islamic finance is an opportunity for us to enter new credit markets,” Finogenov told reporters in Moscow today. “We hope it will allow us to diversify our liability base.” (source)

UK - BLME completes largest Islamic financing in healthcare sector in the UK

www.zawya.com - Murabaha financing valued at £11.5 million

London, 30 January 2012: Bank of London and The Middle East ("BLME"), whose main shareholders are Boubyan Bank and the Public Institution for Social Security, today announced that it has competed the largest Islamic financing in the healthcare sector in the UK, a £11.5m Murabaha financing for Healthcare Properties Limited, a wholly owned subsidiary of the real estate specialist Public Service Properties Investments Limited ("PSPI").   (source)

UK - CAPITAL MARKETS - London: Sukuk required to secure pole position

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EUROPE - ARTICLE - Islamic Banking and Finance on the European Market

(by ISFIN) Islamic Finance, developed during the 70's in the Muslim countries, is experiencing an increasing popularity far outside the Muslim World's frontiers. In a world where the dominance of the capitalist economy is obvious, the development of a system where the main principle is the exclusion the interest rate comes close to being an exploit. At first, Islamic finance has been implemented in the Western World mainly to benefit from the advantages offered by European financial centers such as the Luxembourg and Switzerland. From this first tendency, only the corporate and private banking clients have taken advantage of. It is only recently that retail services started to be offered on the Western territory, conscious of the increasing economic power of the different European Muslim communities. (full article and source)

IRELAND - CAPITAL MARKETS - Fitch Rates Goldman's Sukuk Trust Certificate Program 'A+/F1+'; Rating Watch Negative

finance.alphatrade.com - CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has assigned an 'A+/F1+' rating to the trust certificate program created by The Goldman Sachs Group, Inc. (Goldman) and placed the rating on Rating Watch Negative. The issuing entity under the program is Global Sukuk Company Limited (GSCL). This program was created for the issuance of murabaha trust certificates. (source)

IRELAND - CAPITAL MARKETS - Goldman Sachs to list $2bn bond

www.irishtimes.com - IRELAND’S BURGEONING Islamic finance industry got a boost yesterday when financial behemoth Goldman Sachs was approved by the Central Bank to list a $2 billion “sukuk” bond on the Irish Stock Exchange, the Global Sukuk Company.  (source)

LUXEMBOURG - Luxembourg, a significant hub for Islamic finance

Although the Grand Duchy of Luxembourg is a very small country in terms of area and population (2,586 km2 and 502,000 inhabitants), it is one of the most important financial centers all over Europe. Nowadays, Luxembourg is considered to be the first European financial centre and globally the second after the United States of America in terms of fund industry. Furthermore, Luxembourg is recognized as one of the leading Islamic financial centers through its history in the field of Islamic finance and its continuous efforts to develop this sector.  (source)

RUSSIA - TATARISTAN - Tatarstan Islamic finance hub ambitions boosted

LONDON, Sept 14 (IFR) - Russian republic Tatarstan's ambition to develop a Sharia-compliant market received a boost this week when the Kazan-based AK Bars Bank became the first Tatar credit to secure a murabaha loan.

It was also the first international loan facility compliant with Sharia canons for a Russian bank .

Earlier this year Tatarstan announced an Islamic finance initiative to promote the sector, and the Ba1/NR/BBB- rated Muslim-majority republic backed this up with plans to tap the Sharia-compliant market with sukuk paper. (source)

RUSSIA - AK BARS Bank closes $60 million Murabaha financing

CPIFINANCIAL.NET - AK BARS Bank has successfully closed the debut in CIS one-year syndicated Murabaha financing for the total amount of $60 million. Citi and the Islamic Corporation for the Development of the Private Sector (ICD) acted as exclusive Joint Lead Arrangers and Bookrunners (source)

LUXEMBOURG - Sukuk assets qualified as guaranteed debt securities

The Grand-Duchy Grand-Duchy of Luxembourg is historically one of the first European actors in Islamic finance sector since the 1970s. Luxembourg was the first European Stock exchange to list a Sukuk in 2002 and currently hosts more than 40 regulated Sharia’a-compliant investment funds and sub funds. (source)

FRANCE - ISLAMIC FINANCE - most prominent mover 2010

Going over part of the archives, it became clear that France has been the most prominent mover during the year 2010 in the field of Islamic finance.  The review covers the span of the blog.

In July 2010 (just before the initiation of the blog), Norton Rose and DTZ Asset Management did publish the White Paper / Livre Blanc "Finance Islamique et Immobilier en France - comprendre pour agir" (French only) and this after DTZ AM had assisted between 2003-2008 with in all more than 40 transactions for more than 3 billion EURO.

Then there was intense focus on regulatory issues.

1. the French Sukuk-tax regulation published back in August, 2010 : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : les sukuk d’investissement et autres instruments financiers assimilés.
Les sukuk d’investissement sont ici des titres financiers hybrides négociables dont, comme pour les produits financiers assimilés, la rémunération et, le cas échéant, le capital, sont indexés sur la performance d’un ou plusieurs actifs sous-jacents détenus directement ou indirectement par l’émetteur";

2. the French Murabaha/Tawarruq-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à un des principaux outils de la finance islamique : l’opération de murabaha avec ordre d’achat, à laquelle s’ajoutent les opérations de tawarruq (opérations de financement réalisées au travers d’une opération de murabaha) et de dépôt rémunéré par une opération de murabaha.
La murabaha avec ordre d’achat est ici un contrat de financement aux termes duquel un client demande explicitement à un Financier de financer l’achat d’un actif déterminé ou d’un portefeuille d’actifs déterminés, en réalisant en particulier deux transferts successifs de propriété se présentant de la manière suivante : un vendeur vend l’actif à un Financier qui le revend à un Client moyennant un prix payable à tempérament, supérieur au prix d’acquisition à hauteur d’un Profit";

3. the French Ijara-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : le contrat d’ijara sur actif.
L’ijara considéré ici est un contrat aux termes duquel une entité met un bien à disposition d’un client pendant une durée déterminée, en contrepartie du versement de loyers. Ce contrat peut être assorti d’une promesse de vente ou d’une option d’achat"; and

4.the French Istisna-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : le contrat d’istisna.
L’istisna est un contrat de financement par lequel un Financier, finance pour son compte propre ou pour le compte de son Client, la construction d’un ouvrage mobilier ou immobilier auprès d’un tiers qui le construit (« le Fabricant »). Le Financier paie le Fabricant au comptant ou avec un échéancier durant la phase de construction."

As an interesting follow up on the Norton Rose / DTZ AM publication, there was the article in November 2010 of Wharton "Finding a Home for Islamic Finance in France : arabic" that not only gave a resume of the French position up to that time, but also placed the apparent tension between France and the UK in its' historical perspective from the 1980's onwards (original post) .

An MOU with Malaysian INCEIF aimed at the development for education in the field was entered into in October 2010 and the Guide and Position on the Issuance of Sukuk from the French Financial Markets Authority AMF was published in November 2010. (the English version can be dowloaded HERE).  In December 2010, the AAOIFI approved the "model" for French sukuk, which first French Sukuk in turn is supposed to be issued early 2011.

BNP Paribas was nominated the "Best Islamic Bank - France"by the IFN Islamic Finance News Poll 2010.

The perhaps most remarked academic contribution was "Diversification bancaire, performance, éthique : Alternative ou complémentarité ? Cas des banques islamiques." by Dr. Mohamed Ali CHATTI.

Stumbling upon these texts whilst reviewing part of the archive, I thought it was worthwhile to remind you.

For more details just click "FRANCE" in the country-list of the blog.

Hereunder is a short list of the most relevant tax regulations that changed in France in 2010 (original post) :

BELGIUM - SWIFT Sharia compliant for murabaha

SWIFT has announced that ISO 15022 message standards for the processing of treasury murabaha transactions have been certified compliant with the international Islamic finance standards issued by AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions). This certification paves the way towards the automated processing of murabaha treasury transactions, said to represent 60 percent of all Islamic financing.

FRANCE - New Islamic finance instructions in France

The possibility of the first sovereign or corporate sukuk origination out of France took a step nearer when the French government announced that it had passed new instructions to facilitate the introduction of sukuk, Ijarah, Murabaha and Istisna products in France.