HONG KONG AS THE DEAL MAKER CASE SCENARIO Countries among the Belt 1 and Road would like to take a coordinated approach to build, buy, convert, interconnect and operate a network of 5G-enabled mobile radio towers.
Islamic Financing and Capital Markets and The Belt and Road Initiative Mr. Amirali B. NASIR MH, JP Thursday 28 June 2018 2
Historical data on sukuk for infrastructure development Infrastructure and real estate investment in ASEAN-5 between 2014-2030 estimated at USD 7 tr (McKinsey Global Institute, Southeast Asia at the crossroads: Three paths to prosperity. November 2014.) Global Islamic Finance assets in mid 1990 were 150 bn, Estimated to reach 6.5 tn by 2020 (KFH Research) Islamic Fintech is on the rise and is expected to see record growth in 2018. During the recent World Islamic Banking Conference in Bahrain, Al Baraka Banking Group, Kuwait Finance House Bahrain and Bahrain Development Bank launched ALGO Bahrain, the first Fintech consortium specializing in Islamic finance. Eight more regional banks are expected to join in the next 12 months {Daily Fintech 2018} 3
Acknowledgment: http://en.wikipedia.org Islamic Schools Distribution Along the Belt and Road 4
Infrastructure Development Infrastructure development contributes towards long term development Roads Rail Ports Airport Mobile Drinking Water Sanitation Power Gas Hydroelectric Nuclear Electricity Fintech Housing IoT Solar, Wind 5
In fact there are TWO ISLAMIC SPACE Qard Sak (sukuk) Amanah Wa d Dayn UNIVERSES CONVENTIONAL SPACE Loan Bond (Bonds) Trusts Promise Debt Both existed in the past 6
What is the balance Investors Demand BRI - HKSAR Islamic Capital Markets Issuers -SUPPLY Islamic contracts (Uqd) Al Shirkah (Partnership) Claims on capital And returns Avoid gharar Al Ghorm bil Ghorum Contract trading Short selling Futures Options Permissible stock purification Production Avoid Gambling Intoxicants Riba Fraud Hoarding TAX Neutrality Capital Debt/Equity Debt- Islamic Bonds Equity Mushrarakah Mudarabah Zero Riba The Academy of Law 7
Islamic Finance and Capital market (eg. Sukuk) Islamic Contracts, Sale based, equity based, lease based, Trust, custody Profit: (1) Risk-taking (ghorm) (2) Value added (ikhtiyar) (3) Liability (daman) Prohibitions :Riba, Gambling,Pork,Intoxicants Gharar, Fraud, Hoarding NATURE Sharia h- Islamic Cannon law SOURCES OBJECTIVES Aqidah-faith Akhlaq eithics Muamalaat Man-Allah Man-Man Quaran Sunnah Ijma Qiyas Ijtihadinterpretation Education tarbiyah Justice Adalah Protection Public Interest Maslaha al amanah 8
Islamic Contracts Charitable Capital Investments Intermediary Hiba (Gift) IJARAH-LEASE Bay- Sale Rahn Waqf Bba MUDARABAH Joala Qard-loan Operational MURABAHA MUSHARAKAH Wadiah Ibra - Rebate Financial Salam Muzaraha WAKALAH Kafalah Only those indicated in GREEN background and UPPER CASE are used in the amendments to HK Law Ordinance No. 10 of 2013 on 19.7.2013 Istisna Musaqah Mugarasah Hiwala Muqasah The Academy of Law 9
Diagram on the Framework of the Proposed Legislative Amendments The Academy of Law 10
Product Double Transfer Income Property tax Profit/ Loss Stamp Duty Musharakah (Property) Murabahah (Property) Mudarabah Ijarah (Property) Ijarah with Diminishing Musharakah Salam (Property) Istisna/ (parallel) ( ) Sukuk The Academy of Law 11
ADR in the Islamic World Islamic law not readily ascertainable to legal practitioners and judges. Drafting requires caution. Shariah accepts arbitration (tahkim) and conciliation as a means of resolving disputes. {Quaran [4: 35.] } Battle of Siffin Arbitration The Battle of Siffin (May-July 657 AD) main battle 26 to July 28. Imam Ali ibn Abi Talib (AS) and Muawiyah, in Syria. Parties agreed to arbitration with inconclusive results. Two arbitrators appointed by deed which stated the names of the arbitrators, the time limit for making the award, the applicable law and the place of issue of the award. 12
Cases where courts or Government deal with arguments on Islamic law Malayan Banking Berhad v. Ya kup Bin Oje & Rosini Binti Fauzi Originating summons No. 24-173-2006-II 30 August 2007 (High Court of Sabah and Sarawak at Kuching, Malaysia). Beximco Pharmaceuticals Ltd V Shamil Bank Of Bahrain [2004] EWCA Civ 19 13
Thank You 14
HONG KONG AS THE DEAL MAKER CASE SCENARIO Countries among the Belt 1 5 and Road would like to take a coordinated approach to build, buy, convert, interconnect and operate a network of 5G-enabled mobile radio towers.