Date: 12.08.2023
August 4 President of Russia Vladimir Putin signed a law on conducting an experiment in partnership financing in Russia.
The purpose of the experiment is to "assess the effectiveness of special regulation" of the industry and "assess the feasibility of implementing special regulation in the legislation of the Russian Federation." The experiment will take place on the territory of four regions - Tatarstan, Bashkortostan, Chechnya and Dagestan. It is these regions that have the greatest accumulated experience in the implementation of Islamic finance services.
The duration of the experiment is two years. It is assumed that during this time the interaction of the regulator, authorities (including regional ones) and market participants will be able to determine the most effective mechanisms for regulating the market for its effective development.
The Bank of Russia will maintain a separate register of participants in the experiment. It will be able to include banks, leasing companies, cooperatives, and other organizations that meet the requirements specified in the law. The law lifts the ban on banks to conduct trading activities, thereby banks that want to enter the market will be able to implement the most popular Islamic finance instruments - murabaha and musawam. The law also allows participants in the experiment to raise funds in the form of loans or trust management.
Of the new provisions included in the law before the preparation for the third reading - the possibility of using state support programs in financing the acquisition of real estate.
An issue on which the expert community has not been able to move forward is the value added tax. So far, there is no fixing of equal conditions for the tax burden in terms of VAT for credit institutions and participants in the experiment.
Currently, banks and other organizations, regions participating in the experiment are preparing for its start. A series of events is planned to improve financial literacy in the field of Islamic finance.
A number of universities continue advanced training programs in the field of Islamic finance. Among them - National Research University Higher School of Economics, KFU, Plekhanov Russian University of Economics, Sber University, etc.
To get the automated translation of the law, please click here. For any inquiries please send a request to rusexpertif@gmail.com.
Source: RAEIF