United Arab Emirates news: Visit from Lord Mayor of London seeking “piece of the Islamic finance action”

An article in The National mentions a recent visit to the Middle East by Fiona Woolf, Lord Mayor of London with the title “Everybody wants a piece of the Islamic finance action”.

“When Fiona Woolf, Lord Mayor of London, visited the Arabian Gulf region in February, Islamic finance was top of her agenda.

Last year, the British prime minister, David Cameron, said that he wanted the United Kingdom to be the first sovereign government outside the Islamic world to use sukuk, suggesting he believes it will be an increasingly important part of global finance.

The move reflects London’s effort to compete in the Islamic finance business, which is led by the Arab Gulf states and Malaysia.”

“London is targeting cross-border flows, helped by its scale as a financial centre and its legal system, which is recognised internationally. Sukuk issues on the London Stock Exchange have raised more than US$49 billion.”

The article also explains the concept of Sukuk:

“Sukuk in Arabic is the plural of sakk, a certificate showing ownership of an asset. The Ottoman Empire is believed to have first issued a sukuk in 1775, when it borrowed money against future income on tobacco customs levies.

Islamic law prohibits the payment of interest. Instead, those who invest in sukuk – for example, to help fund the building of an airport – gain a share in owning the asset and so are entitled to a share in the airport’s revenues. Once the sukuk is issued, it can be traded on local capital markets.”

The full article is here. The UAE is ranked 16th on the Financial Secrecy Index. Wikipedia has more detail on the Lord Mayor of London, clarifying that the post should not be confused with that of Mayor of London.

Please see also the Tax Justice Network on how the financial centre in the City of London is steering UK foreign policy and undermining democracy and stability in the EU.

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