Library of Congress

Law Library of Congress

The Library of Congress > Law Library > News & Events > Global Legal Monitor

Egypt: Council of Ministers Approves Draft Law Allowing Issuance of Islamic Bonds

(Mar. 8, 2013) On February 27, 2013, the Egyptian Council of Ministers approved a draft law allowing the issuance by the government of Islamic bonds, known as “sukuk.” The intent behind the draft law was to help close the gap in the national budget deficit. It is also supposed to increase the foreign currency national reserves. The draft law is considered the first piece of legislation in <?Egypt to allow the issuance of bonds based on Islamic law. The Foreign Minister announced that the law is expected to raise around US$10 million a year. The bill will be transferred to the Shura Council (the Upper Chamber) in the near future and is expected to be signed by the President. (The Egyptian Ministers of Council Approves the Islamic Bonds Draft Law [in Arabic], AL ARABIYAH, (Feb. 27, 2013).)

Sukuk is an Islamic financing system through which bonds are offered to fund a public asset or good. Such bonds offer undivided shares of ownership of tangible assets, and under Islamic law these bonds cannot earn interest. (Rodney Wilson, Islamic Capital Markets: The Role of Sukuk, QFINANCE (last visited Mar. 5, 2013).)