France: High court rejects Islamic finance bill

France: High court rejects Islamic finance bill

France's highest constitutional authority on Wednesday struck down a provision of a new law that would have opened up French banking to Islamic finance.

The National Assembly last month adopted the measure to allow Sharia-compliant financing despite opposition from the Socialists who asked the Constitutional Council to rule on its legality.

Opposition deputies had complained that staunchly secular France must not allow principles of Sharia law to be recognized in legislation.

The measure would have provided a legal basis for Islamic "sukuk" bonds, which are asset-based and do not pay interest. Investors receive coupons corresponding to part of the profits earned by the asset underpinning the bond.


The Constitutional Council ruled that the provision should not have been lumped into a broader bill on financing for medium and small businesses as it was a separate issue.

A statement from the Council stressed that the provision was being challenged "not on the grounds of its content but rather over the procedure followed in parliament."


Source: Expatica (English)

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