ISLAMIC BANKING PROVISIONS IN THE UAE COMMERCIAL TRANSACTIONS LAW 2022 IN LIGHT OF AAOIFI SHARI’A STANDARDS
DOI:
https://doi.org/10.52747/aqujssis.4.01.272Keywords:
Commercial Transactions Law, AAOIFI Standards, Shari’a Standards, Islamic BankingAbstract
The United Arab Emirates has issued the new – Decretal Federal Law No. 50/2022 under the name of “Commercial Transactions Law” Which is characterized by its comprehensiveness and broad scope, particularly in its consideration of Islamic banking provisions. The law has designated an entire chapter (Chapter Six), which includes thirty-one articles, to explain and discuss the concepts of Islamic finance contracts along with a stipulation of some important provisions and controls. Prior issuing the said Law, the Higher Shari’a Authority (HSA) of the Central Bank of UAE issued a resolution regarding the adoption of Shari’a Standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (“AAOIFI”), the resolution stated that these standards shall be binding on the Internal Shari’a Supervision Committees (“ISSC”) of the Financial Institutions that preform all or part of their activities in accordance with Islamic Shari’a rules. Hence, it was necessary to study the provisions and controls included in the new law that are related to Islamic finance in comparison with AAOIFI’s standards in order to specify the similarities and differences. The study will also highlight the provisions and controls that the law added to what was stated in the AAOIFI standards and will try to evaluate them. Several approaches were followed to achieve the objectives of the research. The researcher followed each of the following approaches: extrapolate, comparative and analysis. The study firstly tried to extrapolate the legal materials related to the research topic, then compare it with what represents it in the AAOIFI standards, to highlight the compatibility and difference between each of them and analyze the results in order to reach to a conclusion. One of the most prominent results of the research was that the scope of the new law was broader than the AAOIFI standards, that’s because the law included Islamic windows among the institutions to which the provisions relating to Islamic financial institutions apply. Moreover, “Commercial Transactions Law” was characterized by its brevity in its mention of the provisions and controls of financing contracts, and this is based on what “Higher Shari’a Authority” decided to consider AAOIFI’s standards- which include the detailed provisions of those contracts- as a mandatory reference for Islamic financial institutions.
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