Lawyers building bridges with Islam through Islamic Finance

Category: Europe, Life & Society Topics: Economy, Finance Views: 4076
4076

Eric Meyer walked out of a London office two weeks ago, a sheaf of signed fatwas in hand.

Hoping to cash in on the trend in financial products aimed at Muslims, the head of the New Canaan, Conn.-based Meyer Capital Partners started calling Islamic law scholars a year ago. His pitch: hedge funds that Muslims could invest in without violating strict tenets of Islamic law that prohibit financial speculation and the earning of interest.

The fatwas -- or Islamic legal opinions -- contained the blessings of three Islamic scholars, all of whom had reviewed Meyer's proposed fund and deemed it compliant with Shariah, or Islamic law.

Meyer also had formal assurances from a team of King & Spalding lawyers that his plans adhered to secular law in the United States as well. "I was on cloud nine," he says. "The lawyers from King & Spalding really did a yeoman's job of bridging the two worlds."

King & Spalding isn't the only U.S. firm collaborating with Islamic scholars. Gibson, Dunn & Crutcher; Bryan Cave; and Wiley Rein & Fielding are some of the firms getting a piece of the Islamic finance pie. Islamic finance was born in the 1970s, after a swell in oil revenues and the resurgence of fundamentalist Muslim movements. The growth meant potential new legal clients, and so American and London lawyers started specializing in investments and financing structures that satisfy Shariah requirements.

While experts differ over exactly how much investment money Muslims around the world have at their disposal, there's little doubt it's a big number, and growing fast. It has taken time and financial wizardry to get some of that capital into the Western market. And paving the way has been a fleet of lawyers who are as comfortable talking about ijarah, or lease deals that comply with Shariah, as they are parsing conventional Western contracts. ("What Is Shariah?".)

"Ten years ago, there were four or five Western lawyers with a little bit of experience in Islamic law," says Yusuf DeLorenzo, one of the scholars who helped vet Meyer's new Shariah-compliant hedge fund. Now nearly a dozen firms have Islamic finance working groups or lawyers who specialize in the practice area.

"It's become a very, very big business," says DeLorenzo, a Northern Virginia- and London-based consultant who helped set up the first Dow Jones Islamic Markets Index five years ago.

REDEFINING THE ART OF THE DEAL

Shariah is based on the Quran, the teachings of Muhammad, and the work of Muslim scholars during the first two centuries of Islam. Its principles prohibit Muslims from participating in some of the mainstays of Western business, such as earning or paying interest and engaging in speculation. However, Shariah does permit other forms of investment, such as ijarah wa iqtina (lease purchase financing), mudaraba (trust finance), and musharaka (equity participation).

James Phipps, 38, got interested in Islamic law and culture while serving as an Army interrogator during the first Gulf War. He then spent time in Riyadh, Saudi Arabia, studying at the King Faisal Center for Islamic Studies and then working in an outpost of Jones Day. Now an associate in Wiley Rein's international business ventures practice, Phipps helps craft joint venture agreements between Muslim and non-Muslim businesses.

Deals are sometimes canceled when Muslim and secular parties can't reach a compromise. But more often the parties make concessions, according to Phipps. "The Muslims that I know are pretty practical people who want to realize the best return they can on their money and do what needs to be done," he says. And a handful of Shariah jurists who specialize in finance are more than willing to level the path to Western markets for investment-savvy Muslims.

Says DeLorenzo: "As a Shariah scholar, I feel more than anything a consumer advocate. I ensure that the service or product is one that a Muslim investor can use with a clear conscience -- that the returns will be halal."

Phipps worked on, for example, a $300 million-plus transaction for a communications network in the Middle East. The buyer, a country with a largely Muslim population, opted for what's known as a build-own-operate-transfer model. A BOOT is a means of financing large-scale infrastructure development used primarily by governments.

Under this model, private sector investors provide the capital for construction, build, and operate the infrastructure for an agreed period of time and then transfer ownership back to the government. The model is conventional in Western terms, but also works as an Islamic finance tool because it doesn't require the buyer to make or receive an interest payment.

"From the buyer's vantage, BOOT doesn't cause any trouble in terms of Islamic law," Phipps says. "And the deal itself didn't strap the non-Islamic [seller] to doing business itself in the Islamic way."

Shariah compliance in government procurement can present a stumbling block, Phipps says. One such deal fell through because the non-Muslim seller in a large project for a Gulf-state government was not willing to forgo interest on late payments, having already agreed to a discounted selling price. There are ways of addressing late payment, Phipps notes, but they often mean that the Muslim party ultimately pays a higher purchase price.

MELDING ISLAMIC, WESTERN LAWS

As recently as a decade ago, Muslim investors who were determined to grow their wealth in accordance with Shariah -- and reap the returns of conventional Western style investment -- enjoyed few options.

"They didn't have available to them the smorgasbord of risk-reward adjusted investments available to secular investors in the West," says Donald Knight, a senior partner in King & Spalding's Middle East Islamic finance practice. But they did have capital.

Banks and their lawyers quickly found that adapting Western business transactions to Shariah principles can create challenges.

One example: During any corporate acquisition, it's typical for the buyer and seller to differ on the value of the target company. In secular transactions, that's often resolved by an arrangement requiring the purchaser to pay additional money if the acquired company meets certain earnings targets after the deal is completed.

That structure isn't an option under Shariah, because it is considered speculative. Knight, the King & Spalding partner, says he knows how to get around that obstacle. But he isn't advertising it -- or for that matter any of the solutions his firm has devised for solving problems when Muslim investors do business with non-Muslims.

Knight isn't alone in his reluctance to provide details about his handiwork. American lawyers who specialize in Islamic finance insist they aren't being cagey -- just wise in protecting legal solutions that can take years to refine and can be applied to a broad range of transactions.

Protecting Shariah-compliant financing structures as if they were secret formulas makes sense as the volume and sophistication of financial products and contracts for Muslim investors grows. Dow Jones' Islamic Markets Index was started in 1999 and has since expanded into a family of indexes of businesses that are broadly in accord with Shariah principles. And London-based HSBC Bank launched its Islamic banking arm, Amanah Finance, in the late '90s.

Before Muslims had the option to make the kinds of sophisticated Shariah-compliant investments now being offered, they either opted for conventional interest-based investments -- or kept their capital under the proverbial mattress.

"There was a certain amount of money that was not being invested, or being invested in less than optimal circumstances that were compliant with Islamic law," says Wiley Rein's Phipps.

Over the last five years, Gibson Dunn has represented clients in Islamic-compliant real estate acquisitions valued at more than $500 million. The acquisitions include multifamily apartment complexes, industrial property, and office buildings. The firm has primarily relied on an ijarah -- or master lease -- between property owners and Islamic investors to keep the transaction compliant with Shariah.

One of the common ways to structure a Shariah-compliant "mortgage" is through murabaha, a purchase and resale agreement in which the capital provider purchases the property and resells it at a higher price to the ultimate buyer.

Last year, Middle Eastern investors, including Israelis, put $1.2 billion into U.S. commercial real estate, eclipsing for the first time Germans, who have traditionally poured the most foreign investment into U.S. real estate, according to Real Capital Analytics.

A large portion of that capital came from Muslim real estate investors who in the past had bought property outright, which meant few Muslims strictly adhering to Shariah invested in U.S. commercial real estate, says David Furman, a real estate partner with Gibson Dunn.

Furman says he spends time explaining to property managers and lenders, who can be dubious about perceived constraints of doing business under Shariah, how Islamic investors follow a set of rules that are different, but not too different.

Or as Mahmoud El-Gamal, chair of Islamic economics, finance, and management at Rice University in Houston, puts it: "The name of the game is to try to maintain noticeable differences between conventional finance and Islamic finance in order to use the Islamic brand name, but then to convince regulators that it isn't so different. That's where interaction between Muslim jurists and lawyers comes in."

Judith Lee, a D.C.-based partner with Gibson Dunn, addressed a conference of Islamic auditors and accountants in Bahrain in March about compliance with the USA Patriot Act. The international trade and customs lawyer says the group was concerned not only with finding new finance mechanisms that followed their own religious laws, but with making sure they weren't disobeying U.S. statutes.

"The goal of the conference was twofold: how to operate on par with Citicorp and still maintain fidelity to Shariah, and how to respond to increasing scrutiny on money laundering and terrorism funding," says Lee.

Lee says the Islamic investors are "not parochial" and frequently operate in different jurisdictions. But as they increasingly become major players in world financial markets, they are learning to cope with regulations while remaining in compliance with their own religious laws.

She thinks that having a U.S. law firm can help to smooth the way. "A lot of it is overcoming bias with people who are not very familiar with Islamic financing and reassuring companies that none of the bad guys on any list are involved in our client's financing," says Lee.

Wiley Rein's Phipps is hopeful that the work of U.S. law firms in Islamic finance can do even more than that.

"Understanding Islamic law principles is a way we can be connected to the Islamic world in a healthy way," says Phipps. "It should be an engine for continuing to improve relations."

 

Source: Legal Times


  Category: Europe, Life & Society
  Topics: Economy, Finance
Views: 4076

Related Suggestions

 
COMMENTS DISCLAIMER & RULES OF ENGAGEMENT
The opinions expressed herein, through this post or comments, contain positions and viewpoints that are not necessarily those of IslamiCity. These are offered as a means for IslamiCity to stimulate dialogue and discussion in our continuing mission of being an educational organization. The IslamiCity site may occasionally contain copyrighted material the use of which may not always have been specifically authorized by the copyright owner. IslamiCity is making such material available in its effort to advance understanding of humanitarian, education, democracy, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law.


In accordance with Title 17 U.S.C. Section 107, and such (and all) material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.


Older Comments:
KING FROM UK said:
Bravo Akbar, excellent points. It comes as no surprise yet again that Jewish bigot "Alain" is simply regurjitating tired old christian polemic.
Guess when you are raised in a culture of fear and hatred such mental pathology is imminent.
2003-06-13

AKBAR KHAN FROM CANADA said:
Again, you fail to read and understand, big problem for you I can see. The Sunnah of the beloved Prophet is not only transmitted orally, it is transmitted in written form, along with orally. Secondly, the authenticity of an ahadith is not based on it's transmission, as it's soundness is based on who transmitted it, and if those individuals were one of the Sahaba's of the holy Prophet (SAW), or anyone else who LIVED during his time. These are called SAHIH HADITH. Such as Abu Dawood, Abu Huraiyra, Tirmidhi, Bukhari, Muslim. Therefore, if you do not EVEN KNOW about these things, why are you coming onto this website and challenging the transmission of Islamic knowledge and its authenticity while you know nothing about it's transmission. You really don't get it through your thick skull or something, I don't know how many times I have to tell you over and over, go read about Islamic history and knowledge first and understand what process it went through, and you will know WHY it is SOUND, from Qur'an, and the Sunnah. Ignorance is bliss...either you choose to learn of Islam first, not from a book written by someone from Switzerland, USA, Canada, Britain. Rather why don't you go pick up a book by a respected Islamic author? Otherwise you will be reading a Penguin Classics lie of Islamic holy books. It's really up to you...but when you sit there and claim to be more of an authority on Islamic holy writings than an individual who has spent 20 or more years of his/her life studying it in deep thought, I really feel you are lost.

When you say the Qur'an was written on all kinds of materials after the Prophet (saw), in fact it was immediately after, you fail to recognize that there were thousands of people around who had memorized the exact same Qur'an that was going to be written down. How do you think they wrote it down, they compared their memorizations with each other and made sure they were identical. U are disproved once again.
2003-06-12

AKBAR KHAN FROM CANADA said:
Alain Jean-Mairet:
You didn't answer one of my questions, you couldn't explain your knowledge of Islamic Law clearly, you have displayed that you are unaware of it's teaching and are in the process of discovery. This is the case, and you have no Qadi who has taught you of Islam. Therefore interpret the Sunnah of our beloved Prophet, but rest assured that your thoughts are nothing more than opinion, because they cannot match and have no authority over what Muslims follow, from amongst the four schools of thought, and the broadly accepted explanations by Islamic scholars (Ahlus Sunnah).


Which version of this so-called democracy do you claim existed in Switzerland without any interruptions for 700 years? Confederacy, Kingship, Representative Democracy( a phenomenon that is new to this century)? If that is the case, then obviously you are assuming that Switzerland had a so called "democracy" for 700 years non-stop. Listen, there is no "democracy" from fuedal war, invasions by French and others, and monarchial government Next point, your assumed application of tests done on oral tradition have no bearing on the arabic language, as they have not been administered with Arabic language as the language being tested in transmission, so what you say have no bearing whatsoever. Like I said, go visit a Madrassah before you comment on it's accuracy of transmission from one to another.

There are different categories of SUNNAH first of all, and if you knew this, you wouldn't be sitting there saying, qualified people are allowed to interpret SUNNAH. What qualifications do you have individual from Switzerland? Have you studied in Medina, Mecca, Al-Azhar? If you have not studied in the places where Islam has its roots, or is an Islamic country, then your "QUALIFICATION" is highly questionable. It takes years and years of dedication to be a qualified interpreter of the Sunnah, to give things like Fatwa's. You're making a fool of urself, stop lying already.
2003-06-12

ALAIN JEAN-MAIRET FROM CH said:
Second point
It is a pure matter of opinion if the oral tradition is safer than the written one. To my knowledge, no specific controlled test has been done for establishing the facts? But several tests (in the realm of psychological studies and not directly related to Islam, it is true) have shown that people are prone to alter the content and meaning of messages transmitted by mouth-to-hear. Hence we would have to admit that Islamic oral tradition really has benefited from repeated supernatural human faculties. This is very unlikely. Muslims definitely are in debt of the proof that their Sunnah is accurate.

Third point
At the beginning, several parts of the Qur'an had been written on all kind of material, without a plan, and others were learned by heart by different people. This quickly became a problem: after Muhammad's death, as Muslims were progressing (Armenia, Azerbaijan), they were confronted with Muslims who knew of other verses from the prophet. So it was decided (Uthman) to compile two versions (written in different languages), to make a few copies of the "new and augmented" version and to destroy the original material by fire. That was done. If this proves something, than rather the superiority of written tradition.


Forth point
We are computer-literate persons, able to enter the words you mentioned in a search-engine and learn what they mean. God knows Muslims do like explain this kind of things, at length. I won't add my wisdom to that treasure; also because I am not sufficiently acquainted with all the subtleties of such exchanges. But essentially because I disapprove of this kind of knowledge which is nourishing itself from is own existence without ever establishing a concrete body of reference. And because I am assured of being more apt to interpret god's will, based on the concept of right, natural laws, scientifically established facts and common sense, than any Muslim scholar working on the basis of Sunnah.
2003-06-12

ALAIN JEAN-MAIRET FROM CH said:
Akbar Khan
I reckon you called me a liar and calumniated me. I see that you won't admit the fact and try rather to put the burden of proof on my back, asking me to "prove myself", to show that I have some command of the Muslim scholarship.

A correction beforehand: I'm not an American--my country (Switzerland) has over 700 years of uninterrupted democratic tradition. Hence I won't respond to your claims regarding the U.S. internal issues.

You say that what you call "my personal logic" is not good enough for commenting on Sunnah.
You affirm that oral tradition, as usually practiced in Islam (texts are memorized by heart and transmitted through a teacher-to-student relationship), is safer than written tradition.
You are presenting the fact that all present copies of the Qur'an are identical as some kind of proof of the quality of its transmission.
You want me to define a few core concepts of Islamic scholarship such as Taqleed, Mujtahid, Ijtihad.

First point
Muhammad told (I won't give any references, I'm free of that choice) that the quality of a commentator is to be deduced from the quality of his comments. This would prove me right as long as what I am saying is sound. Scholars will tell that this was concerning scholars only, not amateurs. But this cannot really rules out my point as my being an amateur or not depends on my providing good comments: I could pretend being naturally gifted and thus be a better interpret than a regular scholar.
On the other hand, it is an accepted rule within Islamic scholarship that only "qualified" (instructed, at different stages) people are allowed to interpret Sunnah. Muhammad is also said to have told that no-one should emits interpretations based on one's uneducated opinion (he said that one goes directly into fire or something like that). So my case is rather bad, but I have a chance, based on that thin line drawn by Muhammad. I dare to walk over that fire. God is my witness.
2003-06-12

AKBAR KHAN FROM CANADA said:
I just realized that you think that Shariah law allows the cruel punishment and death penalty, but you fail to remind yourself that the PRESIDENT OF THE USA, executed more prison inmates while he was Governor of Texas than any other Governor in American history!! Another thing you fail to understand is, that your country is a phenomenon that has not even been in full operation for even 100 years. The current so called "democratic" ways of life in the USA cannot even come close to tremendous history of peace and tranquility that existed in Islam, ten times longer than this newly found "democracy" that you never seem to mention. You may plan, George W. Bush may plan, and I may plan, but God is surely the best of planners, he knows all that we do. Just go over the wonderful new Patriot Act set in by your democratic government that allows government officials to ransack private property, search it, take anything they want, without a warrant or court order, and not even have to inform the owner or residents of that property that they have done so. There are so many disfigurations within the man-made laws of the USA, that it's constitution is in such disarray and contradiction,, yet you seem to be some unknown authority of things like Shariah. Why don't you find something else to do, like clean up the mess in your own backyard before sticking your nose into the business of others in hte world. Once again the modern crusader, police man of hte world can judge us all for our actions. If you are so wise in commenting about Islam, to me seems like taking the comments of others and twisting them around to suit your personal interpretation of events, I challenge you...

What are the diffrent approaches for Muslims to live their lievs, through Taqleed, and what does this represent as today we are incapable of being a Mujtahid in performing acts of Ijtihad? Define Taqleed, Mujtahid, Ijtihad, and what they are in reference to. Prove yourself
2003-06-12

AKBAR KHAN FROM CANADA said:
As-Salaam-U-Alaiykum,

Alain Jean-Mairet:
You may not be using other names on this website, and even if you do, it doesn't matter. Educated brothers and sisters of the Qur'an and the the Prophet's Seerah will always be ready to respond to any sort of ill-educated comments, like the ones u just posted, of yours on matter such as Shariah.

I did not call you a liar, I simply said that what you said was a lie, referring to your actions. So, the next time u read a comment, read it properly then hopefully you would see the distinction.

It comes down to this...if you don't know about Islam on such things, posting your comments on the Qur'an and the Ahadith and justifying if they are valid or not, based on your personal logic, well then sorry but that's not good enough, your methodology is innacurate and incomplete. This is because you don't know the history of Islam well enough, and you do not understand the process of handing over the Qur'an from one generation to next. Visit a Madrassah and you'll see the amazing accuracy in handing down the word of Allah (SWT). You do not understand, you refuse to comprehend that the way the Quran is written, the way ahadith is written, when it is memorized and passed on from one generation to the next, it remains even safer, simply b/c u can compare the written book(which may contain hand written errors), with the flawless memorization of the MILLIONS of Huffaz over 1400 years who have memorized the Qur'an to HEART. Can you deny that truth?? Yes that's up to you, let's see if you accept logic and reason now. How do u rationalize that Alain Jean-Mairet?
Next, go to Turkey...one of two of the oldest versions of the Qur'an in the world is there, compare it to any Qur'an in the world and there is absolutely no difference. Now people should recognize that people like you on this website attempt to defame Islam but never succeed. All praise be to Allah, Subhanawata'Allah, master of the day of Judgement.
2003-06-12

ALAIN JEAN-MAIRET FROM CH said:
Akbar Khan:
I have been thinking of you more than I wished today. You called me a liar, someone who is trying to confuse people. You also said that I am using several other names on this forum, which would be dishonest.

That is calumny. I never lied to readers of this forum, nor tried to confuse them. I am writing here under my real name (Alain Jean-Mairet) and I never wrote under any other name in this forum.

From what I deduce that *you* are lying here. You pretend to know who I am, what I am up to, but you don't have a clue, let alone the slightest element of proof. You don't know anything about me and you use what you think is your good reputation for trying to slander mine.

As you seem to infer that you are much more knowledgeable than I am in Islamic matter, as well, I propose that you give us your interpretation, your Ijtihad of such a case. What punishment would be appropriate for a calumniator, i.e. someone who intentionally and publicly lied in order to damage someone's reputation?
2003-06-11

ALAIN JEAN-MAIRET FROM CH said:
Well, it is a question of appreciation, of course. If you admit that the Qur'an, in its present form, is perfect, that the hadith has been perfectly transmitted (mostly over dozens of years of purely oral tradition), that scholars are perfectly inspired by God in their interpretation, then you'll accept too that everything they (or the most respected among them, because there is actually no central Islamic authority in that matter) say is just perfect and does reflect god's will. But people who can believe that won't ever listen to me. So there's no need to worry.

But if you are listening to me nevertheless, please consider the question, for instance, as to why such amount of perfection, along 1400 years, hasn't brought a brilliant civilization among us?

But I'm so ignorant! Because actually, the shariah is not that pile of laws regulating social and political issues and authorizing death penalty, torture and other cruel punishments. No, shariah is the path to God as the prophet gave it to us. It is all love, tenderness, easiness, forgiveness. And it has been so often wrongly attacked. Muslims should be aware of that and try and help the revival of the true shariah.

But how many of the so called Muslims do want the true shariah? Or does that really make no difference whatsoever?
2003-06-11

WAYNE ANTONY BARROW/DOWONE ELBARR LLC. FROM UNITED STATES OF AMERICA said:
I AM THE NEPHEW OF JOE LOUIS-BARROW HEAVY-WEIGHTCHAMP[1936-1951].WORK WITH THE MOSQUE IN MY HOMETOWN CHICAGO'ILL.IAM A COMPLIANCE SPECIALIST FOR A COMPANY AS AN INDEPENDENT ASSOCIATE.WE MUST HANDLE THE DEEN OF ALLAH. AS MY UNCLE SAID[YOU CAN RUN BUT YOU CAN'T HIDE]--- FROM THE SHARIAH OF ISLAM.WITH THIS EFFORT SUCCINCTLY;THE SUN WILL DEFINATLY RAISE IN THE WEST.
2003-06-11

AKBAR KHAN FROM CANADA said:
As-Salaam-U-Alaiykum,

To everyone reading the previous comment, ignore the lies of "Alain Jean-Mairet", this individual knows nothing about Shariah Law it's actually funny reading his her attempt to do so...taking a personal guess as to what it is. Disregard everything he/she says, because he/she is just lying, trying to confuse people and won't succeed, or is just simply brainwashed.

If you would like to learn about Shariah Law and not from an ignoramous like this person "Alain Jean-Mairet" who uses many other names on this website as well, check out "www.islamicbookstore.com" and you can find some cheap books low as $4.95US, on Shariah Law, Fiqh (Islamic Jurisprudence), Ijtihad (the methods used to derive laws of Shariah). Islamicity also has excellent resources to refer to, so look around. Don't rely on vague opinions of people without full knowledge of Islamic laws yourself, and wrong interpretations. As-Salaam-U-Alaiykum
2003-06-10

ALAIN JEAN-MAIRET FROM CH said:
Riaz:
The source of Shariah declares that riba is haram. That's it. If you respect that, you don't invest in economy. Now scholars, not me, did interpret that, and they came to the conclusion that riba, eventually, is okay, or as a British expert puts it in the Gardian:
"A broad consensus has emerged among scholars as to what is Shariah compliant," says Dr Hardeep Tamana of stockbrokers, Redmayne Bentley. "It is about realising that in real life companies do borrow, do have debts and that interest is a part of life."

I consider it a good thing that scholars do correct Muhammad when the reality of our time doesn't give him reason. But, on your side, please realize that there is not that much god-given eternal truth in the holy books, and that Islam's rules have more to do with normal people (scholars)'s opinion than with the word of god. That is why I'll stick with my conscience.

Thanks for your good wishes.
2003-06-10

AKBAR KHAN FROM CANADA said:
This all sounds very interesting, I would like to understand it in a more detailed manner, and as a brother previously noted, Riba (usury), is not only in the form of accumulating interest. It can be something as simple as overcharging someone for a good or service even though it is not worth that amount being charged. How is the money used, what is it being used for, who handles the money and what sort of cycle does it go through, whether it be through a store front bank corporation, trust company, or the government itself...who are they lending the money that we deposit into banks? These are the questions that need to be answered by the "bridge builders," are they doing the same, or are they any different?

All the while the Patriot Act is being enforced, allowing search and seizure by police and government authorities on private property, in striking contradiction with the 4th amendment, we keep INVESTING our money into American banks. STOP putting your oil revenues in American banks and maybe, just maybe the US Government will notice that Muslim governments don't blindly bow down to them...unfortunately it seems that they do, and have been for decades!


The other tihng that needs to be addressed is....why does Bahrain's royal family, the Saudi Royal family, and all the other oil rich royal families have their money stockpiled in American banks, in US Dollars!! Billions of dollars, why are they sitting there, why don't u take them out and put them in European banks, or Japanese banks, why are most of their savings in American and British banks? How can we not point out these governments who operate Shariah Law in Muslim lands, yet reinforce the strength of the American economy while they rip apart Afghanistan and Iraq?

Bottom Line....Rich arab Royal families need to take their wealth out of American banks...how can u go about "MELDING ISLAM, WESTERN LAWS" as it says in this article? Unbelievable.
2003-06-10

RIAZ FROM USA said:
alan jean-mariet

please keep your opinion to yourself dont try to interpret shariah and its implications without knowing what it is.

shriah doesnt say that you cannot invest, what it says is that the investor should have the same risk in both profit and loss.fixed positive returns which is what interest is, is not permitted in islam.there are many more details but this is not the forum for that.

islam is an egalitarian religion it doesnt want the rich to gat richer at the expense of the poor getting poorer, which is happening in the capitalistic model.

i pray that ALLAH gives guidance and shows the light to people like alan jean-mariet.

peace
riaz.
2003-06-09

FARUQ FROM USA said:
Matters are judged by intention not words or interest to be more exact. I'm a Muslim and I don't characterize all forms of interest as haram in Islam. The bad intentions behind the formulation of interest is haram. Interest is just the deceptive weapon of choice. Changing terms from interest to profit means nothing to me if bad intentions are fueling the deal. In other words, profit and fees can be haram also. Matters are judged by Intentions my friend "Intentions".

As-Salaamu Alaikum
Peace be unto you
2003-06-09

SR.D.ALBIZU FROM USA said:
Sallam Alaikum, this is very interesting.Please keep educating us into these matters more often.Many of us (reverted to Islam) have mortgages and other interest based accounts and we don't know how to change to a halal way of buying or investing.If you can please provide a website or source of info. that we can refer to.
Thank you.
2003-06-09

YUSUF ESTES FROM USA said:
Bismillah Rahman Raheem

re: Bridges Over What?

We must be careful in money matters. Allah permits trade - but not usuary. He uses the word "harb" or war against those who violate this principle. (Quran 2:279)
O ye who believe! Fear God, and give up what remains of your demand for usury, if ye are indeed believers.
If ye do it not, Take notice of war from God and His Apostle: But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly.

I have noticed the non-Muslims are very interested in our (Islamic) financing.

We should continue to be most careful in how we invest and how we perform in our financial transactions - because this can also be a form of dawah.

But all of us should fear the anger of Allah and take care not to cross the bridges that lead into Hell.

May Allah guide us and all the believers, ameen.

Yusuf Estes www.IslamTomorrow.com
2003-06-08

ALAIN JEAN-MAIRET FROM CH said:
No-one should make exaggerate profit on usury. It is forbidden by any clean conscience to make profits on mere speculation. It is robbery in front of one's conscience. Unless that profit is redistributed and the operation thus leads to a better legitimate repartition of wealth, maybe. God knows better.

The crux sure is that man shouldn't own anything. In reality, everything belongs to God, and God is allowing mankind to use it for a time.

But, in the real world, if you "own" something and give it, for a definitive time, to someone else, you are entitled to claim compensation. Why? Because the (financial) worth of anything can be but the capitalization of the profit this thing permits to produce on the foreseeable future.

Say you own money, and you invest it in the construction of a building used by dealers, restaurants, whatever. In pure theory, it would be wrong that your money would be more or less worth just because you transformed it into a building. Hence, for balancing these different kinds of worth, we need to put forth the basic principle that a capital (money, land, animals, whatever) produces some rents (for if you work with a capital, you effectively, naturally, will produce profits), and that these rents should permit to maintain the value of the capital. You will thus encourage people, owners as well as workers, to create value. For anything they will do that goes beyond the definite rents will be theirs. Without this incentive, owners don't invest, and workers don't work (without coercion). It is the way it is. It may be imperfect, but at least it supports progress.

Thus people can invest freely as long as they listen to their conscience and respect the poor. People who want to respect the shariah invest nothing. And "smart" Muslims are boring a complicate, non-transparent as possible, way between the two. I think it would be smarter to suppress shariah.
2003-06-08