Modes of Financing Trade in Islamic Law

Modes of Financing Trade in Islamic Law - Modes of Finance...

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Bashar Malkawi* I. Introduction Muslims believe that Islam is the last religion. Islam is called the seal of religions. Islam, unlike the Talmud for Orthodox Judaism or Bible in Christianity, not only covers moral or spiritual teachings, but also it covers every aspect of life such as business. Islamic shari’a places religion as well as economics in the consciousness of Muslims. Therefore, Islam is comprehensive in coverage. Some rules in Islam may be stretched out to meet current issues while maintaining certain core principles as static. Indeed, Islam is a durable living force. According to the teachings of the Prophet Muhammad (s.a.w), the pursuit of business is not inferior but honorable. 1 Allah’s choice of prophet, who was a trader by profession from a trading society, highlights the importance of business. 2 The dominant tribe in Mecca, Quraysh , earned its livelihood for decades selling commodities for a profit. 3 The holy Qur’an is filled with numerous verses using the language of trade. For instance, it states, “O ye who believe! Eat not up your property among yourselves in vanities; But let there be 1 * Bashar H. Malkawi is Associate Professor of Law, University of Sharjah, UAE. He holds S.J.D in Law from American University, Washington College of Law and LL.M in International Trade & Business Law from the University of Arizona. U S.A.W letters are abbreviations for the Arabic words “ Salla Allahu ‘Alaihi Wa Sallam ”. It is an Islamic term of respect typically following a reference to the name of the Prophet Muhammad. “Peace be Upon Him” is used by English speaking Muslims. However, “Peace be Upon Him” does not give full meaning to “ Salla Allahu ‘Alaihi Wa Sallam ” words. Therefore, the words “ Salla Allahu ‘Alaihi Wa Sallam ” should be used. See Glossary of Islamic , 6 J. Islamic L. & Culture 135, 148, 150 (2001). To determine if profit is profiteering, there must be an analysis of prevalent market prices and trading practices among similar merchants. 2 See Chibli Mallat, Commercial Law in the Middle East: between Classical Transactions and Modern Business , 48 Am. J. Comp. L. 81, 92 (2000) (a long-standing tradition of Islamic civilization is its association with and the centrality of trade. The tradition relating to the other great monotheistic epigones in the figures of Abraham and Jesus does not acknowledge the centrality of trade and commerce in any similar way. In the case of Jesus, the episode of the Temple merchants even points in the opposite direction, with the mercantile pursuit of wealth depicted in a derogatory manner. Neither classical Christianity or Judaism seems to have extolled the virtues of commerce in such a detailed or enthusiastic argument for the commercial professions as did Dimashqi in his Mahasin al-tijara , The Virtues of Commerce). 3
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This note was uploaded on 07/12/2011 for the course LAW 32067 taught by Professor Basharmalkawi during the Summer '10 term at Politecnico di Torino.

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Modes of Financing Trade in Islamic Law - Modes of Finance...

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