Legal Aspects of Islamic Finance and the “Belt and Road” Initiative

2017-05-08, by Amirali B NASIR, from China Energy Fund Committee

Abstract: The Belt and Road Initiative (BRI) is in essence a coalition of legal, economic and cultural goals for the development of a common destiny. The principles of understanding and acceptance of cultural differences adherence in the BRI will help achieving the foundation of relationships upon which economic trade can be developed.

Islamic countries have been of great importance to the development of the BRI. Shariah is an integral part of Islam and is often defined as a body of religious or moral laws that regulating the personal conduct of Muslims. Since it has no physical jurisdiction and its interpretation differs upon countries, cultures and educations, it may give difficulties to contract writer to incorporate Shariah principles into business processes.

Moreover, Shariah compliant investment are almost akin to socially responsible investment save for the prescript of interest and products derived from animals of the genus Sus within the suidae family. However, most of these essential underlying Islamic factors are not usually being addressed in the commercial contracts.

Hong Kong legislature is an example of how contracts could be drafted aligned with principles of Shariah. Contracts working on the BRI need to consider adopting Shariah principles based on a thorough understanding of Shariah, common law and international law.

Mr. Amirali B NASIR is a solicitor admitted in Hong Kong, England and Wales and the Dubai International Financial Centre. He is also the Chairman of Islamic Finance Committee for the Law Society of Hong Kong.

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