By: Ibrahim El-Masry
President of the Egyptian Financial Supervisory Authority (EFSA) Ashraf Al-Sharqawi warned that sukuk could be used to launder money, during a meeting of the Shura Council’s Economic Committee.
“Islamic Bonds and certificates which are issued must be nominal and not specific to the bearer, so as to prevent acts of money laundering,” he said.
Sharqawi called for Article 25 of the country’s proposed sukuk law to be dropped.
The article stipulates that a maximum fine of EGP 20m should be imposed on those who violate the law. “People can reap huge profits from money laundering, far greater than that of the maximum fine imposed by this law,” he said.
He added that “sukuk are not a new innovation, and were included in the country’s Capital Law passed in 1992.”
Mohamed Al-Feqqi, president of the Shura Council’s Financial and Economic Affairs Committee, said that the proliferation of sukuk was not the work of any one party or political organisation but rather a blueprint for economic development for all of Egypt.
He asked that the word “organisation” be dropped from Article 21 of the country’s sukuk law, which stipulates that holders of sukuk form “organisations” to protect the shared interests of its members.
Mohamed Maher, president of the Egyptian Capital Market Association (ECMA), stated that in economic law the term “organisation” meant a group of bondholders, or a group of traders.