Egyptian bonds bill criticism 'unjust'

Islamic bonds bill has been rejected by al-Azhar institute Cairo – Akram Ali Egypt's Finance Ministry has released a statement slamming accusations made against its Islamic bonds bill by some members of the Freedom and Justice Party (FJP) and the al-Nour Party. The statement described charges that the bill is "deformed and full of flaws" as "unjust aspersions totally devoid of truth" and "evidence of its propagators' disregard for facts." The statement, released by the Finance Ministry after Minister Mumtaz al-Saeid was replaced by Al-Mursi al-Sayed Hegazy, said that these accusations should be levied at the bill proposed by the Freedom and Justice Party, al-Nour and the Islamic Finance Association (IFA). The bill proposed by these bodies, the statement said, did indeed allow the government and public agencies to issue bonds backed by state assets without restricting them to usufruct, which is the right to enjoy profits not coupled with ownership. That bill, according to the ministry's statement, would enable foreigners and others to take over these assets, which are not safeguarded from sale, mortgaging and seizure. This "failure" in the two parties' proposal, the statement said, was redressed by the ministry in Articles 7 and 13 in its bill, which restrict the bonds to usufruct to the exclusion of bare ownership of the assets, and prohibit seizing the assets. They also ban the imposition of a right in rem on the assets. These strict provisions, the statement said, illustrate the extreme care that the ministry takes to protect public funds and assets. The statement also countered the accusation by the FJP's economic committee that the revenue from the sale of the bonds will be used to finance the budgetary deficit, saying that the revenue will instead be channeled toward building schools, hospitals and other "necessary services," which are non-profit establishments. "The bill proposed by the FJP and al-Nour Party linked the issuing of the bonds with the General Budget Law. This would allow the use of the bond revenue to fund these budgets while also exempting the revenue made by the bond-buyer from taxes and duties." Regarding the objection to the ministry's bill by the Islamic Research Complex (IRC), the statement said that the ministry had not asked the IRC for its approval, but merely for its opinion within the bounds of Islamic law. According to the statement, the ministry then forwarded its responses to the reservations put forward by the IRC to the Grand Imam and Sheikh of al-Azhar to be added to the agenda for the following meeting of the IRC, which will be attended by representatives of the ministry along with whomever the Grand Imam chooses to invite to the discussion. The IRC's responses did not indicate that the bill violated the Islamic Sharia, the statement said. The ministry also said that it had decided to put the bill proposed by the FJP and al-Nour to the public, alongside an ample survey of the ministry's own bill in response to the "ongoing chatter and unwarranted attack" by the two Islamist parties. The measure, according to the statement, aims at involving the public in the discussion and revealing the reality of the accusations. According the statement, the ministry also "ensured that the drafting of the bill was the result of dialogue with representatives from Dar al-Ifta (the official agency responsible for issuing Islamic opinions), the FJP, al-Nour Party and a number of Islamic-bonds experts, both Egyptians and non-Egyptians." These experts, the statement said, included Islamic-finance expert Hussein Hamed Hassan, who was "present during all the steps for drafting the bill through to the completion." Discussions also included representatives from major international institutions, the statement said, "keeping in consideration the global expertise in issuing Islamic bonds," such as in Indonesia, Malaysia, Gulf states, Turkey and Europe, and specifically Germany. This policy, the ministry's statement said, counters statements accusing the ministry of drafting the bill unilaterally.