Chicago Journal of International Law


This Article seeks to demystify sukuk by providing an analysis of the nature and application of sukuk structuring techniques, with an emphasis on legal considerations, in the rapidly changing world of Islamic finance. It also attempts to explore emerging trends in the rapidly evolving marketplace for sukuk investments. In particular, this Article will evaluate both the underlying legal principles involved in innovative sukuk structures and the use of assets in non- Islamic jurisdictions to back securitizations represented by sukuk certificates. After providing a general explanation of the fundamentals of sukuk as an Islamic investment vehicle and an overview of the growing importance of sukuk in the marketplace, this Article will turn to a discussion of the primary legal challenges of utilizing assets to back sukuk offerings in non-Islamic jurisdictions. In addition, this Article will provide an analysis of key conflicts of law considerations posed by the "exportation" of sukuk products outside their traditional markets. The first ever sukuk offering involving US assets will be examined as a case study to provide additional insight into how asset-backed sukuk deals in non-Islamic jurisdictions must be carefully structured.