Building bridges with the Middle East
Xavier Bettel and Pierre Gramegna participated in the World Islamic Economic Forum, and met with government officials and leading representatives of major banks and financial institutions in Abu Dhabi and Dubai.
This year’s edition of the World Islamic Economic Forum (WIEF) was held under the theme of « Innovative Partnerships for Economic Growth ». The Prime Minister gave a keynote speech to an audience of more than 2,500 high-level representatives and highlighted the friendship and cooperation between the Grand Duchy and the Arabic world, as well as the long-established expertise available in Luxembourg in Islamic finance.
In Abu Dhabi, on 26 October, Minister Gramegna and Obaid Humaid Al Tayer, Minister of State for Financial Affairs signed a protocol to amend the agreement on the avoidance of double taxation and prevention of tax evasion on income and capital between the United Arab Emirates and Luxembourg.
The two parties also signed a Memorandum of Understanding on cooperation in the field of Islamic finance. This MoU was signed in recognition of the two countries’ important and growing role in Islamic finance. Minister Gramegna has already committed to going back to Abu Dhabi in March 2015. The Minister said : « The recent issue by Luxemburg of the first sovereign Euro-denominated Sukuk has increased investor appetite in the Arab world for products and services of the Luxembourg financial centre. It was thus an ideal moment to strengthen the ties between Luxembourg and the Gulf, with the aim to further diversify our economy ». In this context, the Minister also announced a future collaboration between Luxembourg and the newly created Abu Dhabi Global Market, a special zone for financial services.
During his visit, Minister Gramegna also attended the inauguration of the first Luxembourg bank, Banque Internationale à Luxembourg (BIL), to establish a branch in Dubai. « BIL, of which the Luxembourg State is a shareholder, has taken on a pioneering role. In doing so it contributes actively to strengthening the links between the two financial centres as well as increasing Luxembourg’s profile in the Gulf region.”
Luxembourg is recognized as one of the leading European centres for Islamic finance and is the third largest domicile for Islamic funds worldwide. Luxembourg has created a business environment geared to the needs of Islamic finance practitioners and has played a pioneering role in Europe. Luxembourg was the first to authorise an Islamic financial institution in 1978 and the first Sharia compliant insurance company in the 1980s. The first Sukuk in Europe was listed in Luxembourg in 2002, the Luxembourg Central Bank was the first European central bank to join the Islamic Financial Services Board (IFSB) in 2010, and the first Euro-denominated sovereign Sukuk was issued by Luxembourg this year.