Islamic finance in France

• The Autorité des Marchés Financiers (AMF) note of 17 July 2007
It is the first text of French law that expressly addresses Islamic finance.
• The Senate information report (No. 347) of 22 June 2007 stresses the need to encourage the emergence of Islamic finance in France.
• The credit rating agency Moody’s published a report stating that “Islamic finance in France offers strong potential, but obstacles remain”, adding that these “relate less to the legislative changes that would be needed than to social and political aspects”.
• Launch on Réunion Island of an Islamic fund approved by the AMF and managed by a subsidiary of Société Générale, BFCOI.

• Launch of the first training course (250 hours) in Islamic finance in France, together with a certificate in Islamic finance (20 hours), November 2008, awarded by the Institut Français d’Etudes et de Sciences Islamiques ( www.ifesi.fr in Boissy-Saint-Léger, Val-de-Marne. )
• Creation of a first French-speaking Shari’ah Board (ACERFI).

• Launch of the University Diploma in Islamic Finance in Strasbourg (January 2009)

• Launch of the University Diploma in Islamic Finance at Paris-Dauphine University (September 2009)

• Invited to the Paris Europlace Forum, the Minister of the Economy, Christine Lagarde, speaking on Wednesday 2 July and addressing Middle Eastern investors present at the event, declared:
“We will develop, at both the regulatory and the tax level, everything needed to make your activities as welcome here in Paris as they are in London and in other financial centres. The Autorité des marchés financiers has already put in place rules compatible with the development of investment funds that meet the principles of the Shari’ah.
I have asked my administration to provide the tax and legal clarifications needed to facilitate the issuance of ‘sukuk’, and to allow the structuring of Islamic finance real estate transactions without tax friction, in particular as regards registration duties”, Mrs Lagarde further announced, adding: “We will adapt our legal environment so that the stability and innovation of our financial centre can benefit Islamic finance.”

• The French tax framework has been adjusted for two Shari’ah-compliant products, sukuk (Islamic bonds) and murabahah. The Directorate General of the Treasury has published “doctrine sheets” on them to specify the adjustments made.
For Christine Lagarde (the current Minister of the Economy), “the publication and posting online of tax rulings on sukuk and murabahah transactions will at last give investors and operators the legal and tax certainty needed for the development of these Islamic finance transactions in France”. The Minister also announced that she would shortly put out for consultation changes to the legal regime of the fiducie (trust), known as “waqf”, to facilitate its use for Islamic finance.
Until then, Islamic finance had been subject to a system of double taxation. These new measures, which should attract more and more foreign Muslim investors, follow the report published in early December (2008) by Paris Europlace on the challenges and opportunities of developing this form of finance in France. According to the report, it could invest up to 100 billion euros in France.

• The French Parliament adopted (in September 2009) a bill authorising the issuance of Islamic bonds, “sukuk”, despite protests from the left-wing opposition. The text put forward by UMP member of parliament Chantal Brunel is mainly intended to make it easier for small and medium-sized enterprises to obtain credit. The National Assembly adopted the bill as the Senate had voted it on 9 June. The text has therefore been definitively adopted by Parliament. The text requires banks, and also insurance bodies, to justify their withdrawal if the company so requests.
Source:
“lepoint.fr” of 17/09/2009.
Link:
http://www.lepoint.fr/actualites-economie/2009-09-17/le-parlement-donne-le-feu-vert-aux-obligations-islamiques/916/0/378138