Financial Undertakings, Rules, and the Internal Market Framework: Challenges and Opportunities

This chapter takes a normative approach to examining Islamic finance within a non-Islamic setting, namely, the European Union (EU). The whole analysis is constructed on the premise that the Rome I regulation on contractual obligations in civil and commercial transactions is based on connections or conflicts between the laws of different States and may not be applied to Sharia rules on the management of money because they represent the law of communities rather than of States. Section 2.1 outlines some introductive remarks; Sect. 2.2 argues for allocating the process of accommodating Islamic finance within the EU regulatory framework. Sections 2.3, 2.4, and 2.5 examine the normative approaches to the regulatory accommodation process, combining the “business-based” and the “cultural-based” approaches; the former concern Sharia-compliant financial undertakings from the point of view of the economic activity performed, while the latter consider Islamic finance as a cultural experience, where the adjective “cultural” implies that Islamic finance should be conceived at least as a set of thinking and behaviours that every Muslim gradually comes to endorse through a socio-educational process of induction.