Dr. Mohamed Maait, Minister of Finance, affirmed that the state is keen to diversify sources and financing tools by attracting new segments of Egyptian and foreign investors wishing to invest in accordance with Islamic law, which would contribute to reducing the cost of financing development through sovereign green and sustainable development instruments to provide the necessary liquidity for the implementation of investment and development projects. the green ones included in the economic and social development plan in the state’s general budget; In line with the state’s efforts to stimulate the demand for government issuances of securities and debt instruments that are issued in local and foreign currencies, to enhance aspects of spending to improve the citizens’ standard of living and meet the development needs of the state, pointing out that the government is preparing to issue the first sovereign sukuk offering during the coming period; Which helps in achieving the desired goals.
The minister added, following the Cabinet approved the executive regulation of the Sovereign Sukuk Law, that this regulation was prepared in cooperation with Al-Azhar, the General Authority for Financial Supervision, and local and international law firms to cover all legal aspects, and to give a legal and technical character in accordance with formulas compatible with the principles of Islamic Sharia, explaining that Sukuk are issued in the form of a paper or electronic certificate with the specifications determined by the executive regulations of the law. They are nominal and of equal value, and are issued for a specific period in Egyptian pounds or foreign currencies through public or private offerings in the local market or international markets.
The minister said that the issuance of sukuk is on the basis of assets that will be privately owned by the state, by selling the right of usufruct of these assets without the right of control, or leasing them, or by any other method consistent with the contract for issuing these sukuk in accordance with the principles of Islamic Sharia, provided that the sukuk is issued A decision by the Prime Minister defining the fixed and movable assets owned by the state as “private property” on the basis of which the sukuk are issued, so that there is a mechanism to assess the right to use these assets or in return for leasing them for this purpose, provided that the maximum period for determining the right to use these assets or the period of their lease Thirty years in compliance with the provisions of the Constitution, and these assets may be leased back to the issuer.
The minister indicated that sovereign sukuk are issued in accordance with the formulas that are compatible with the issuance contract and the contracts related to it, including the murabaha sukuk issued on the basis of the murabaha contract, and the proceeds of its issuance from the sovereign sukuk company are used; To finance the purchase of usufruct rights in Murabaha assets from a supplier or owner, Ijarah sukuk issued on the basis of a contract that includes the transfer of the usufruct right of the assets and concluded between the issuer and the sovereign bond company with the intention of leasing them to the issuer under an Ijarah contract, and Istisna’ sukuk issued on the basis of Istisna’ assets for the purpose of selling rights The use or lease of these assets and the instrument represents a common share in the ownership of the usufruct rights of manufactured assets, and agency sukuk issued on the basis of an agency contract in investing in usufruct rights of assets. Sovereign sukuks of all kinds, including green sukuks or sustainable development sukuks, provided that the oversight committee is approved.
He explained that the tax treatment prescribed on public treasury bonds will apply to the returns of sovereign sukuk bonds and the return on trading on them, and is followed in linking and collecting taxes due on the returns of sovereign sukuks and the return on trading on them, the same procedures followed regarding linking and collecting taxes due on public treasury bonds, pointing out that the right to Owners of sovereign sukuks during the issuance period shall have profits or periodic returns in proportion to the amount of the sukuk’s contribution and the redemption value at the end of the sovereign sukuk’s term or on the expedited redemption date, and circulate sovereign sukuks according to their issuance formulas and form a group of sukuk holders to protect the common interests of its members in accordance with the provisions of the law and its executive regulations.
The minister indicated that work will be done to form a “oversight committee” consisting of economics, finance and law experts and some scholars of Al-Azhar Al-Sharif, and it will be concerned with summarizing the issuances technically and legally and approving the controls related to the sukuk, in addition to establishing a state-owned company to manage and implement the process of “staking the governmental sovereign sukuks.” The issuance shall take place in accordance with any of the formulas compatible with the principles of Islamic Sharia approved by the Control Committee stipulated by law, and on the basis of the issuance contract, and its issuance, circulation and redemption are subject to the controls, rules and procedures compatible with the principles of Islamic Sharia, and the Sovereign Sukuk company may deal in more than one issuance and preparation An annual report regarding the investments according to their use for the purposes for which they were issued, the issuances according to their value, the value of the returns due to the sukuk holders and their maturity dates.
