Definitions provided here are direct excerpts from well-respected sources and reference materials.  No one definition is perfect–some are even misleading–so if you’ve found a better description, please contact us, provide the definition, and include a citation.

More terms and acronyms about Islamic finance and terror funding will be added in the weeks and months to come.  Thank you!


AML:  Anti-money laundering.  (See money laundering.)

amil:  “[T]he government agent or official, particularly the collector of taxes…”  (Brill)

‘ashir: “The ‘āshirs are the collectors stationed by the imām on the public road in order to collect the zakāt of Moslem traders, as well as the tolls imposed on the dhimmi and harbi traders who pass him.” (Aghnides)

Bayt al-Mal:  “House of money.  Historically, a financial institution responsible for the administration of taxes.  Acted as royal treasury for caliphs and sultans, managing personal finances and government expenditures.  Administered distribution of zakah revenues for public works.  Modern Islamic economists deem the institutional framework appropriate for Islamic Society.”  (Esposito)

Bonyad: “massive semi-government foundations with vast religious and philanthropic missions [which] have metamorphosed into huge holding companies that dominate the trade and manufacturing sectors while evading competition, taxes and state regulations.”

Dar al-Harb:  “Territory of war. Denotes the territories bordering on dar al-Islam (territory of Islam), whose leaders are called upon to convert to Islam. Refers to territory that does not have a treaty of nonaggression or peace with Muslims; those that do are called dar al-ahd or dar al-sulh. Jurists trace the concept to Muhammad , whose messages to the Persian, Abyssinian, and Byzantine emperors demanded that they choose between conversion and war…” (Esposito)

dawah: “Call. God’s way of bringing believers to faith and the means by which prophets call individuals and communities back to God. Militant submovements interpret dawah as calling Muslims back to the purer form of religion practiced by Muhammad and the early Muslim community. Historically, missionary dawah accompanied commercial ventures or followed military conquests. Dawah was also the function of the caliph, extending authority over Muslims outside Islamic lands and promoting Islamic unity. In the twentieth century, dawah has become the foundation for social, economic, political, and cultural activities as well as domestic and foreign policy strategies; jusitification for breaking away from the secular and colonial West; legitimation for claims to independent authority within the nation-state; and a call to membership in the righteous Islamic community. (Esposito)

dhimmitude: “Dhimmitude is the status that Islamic law, the Sharia, mandates for non-Muslims, primarily Jews and Christians. Dhimmis, “protected” or “guilty” people, are free to practice their religion in a Sharia regime, but are made subject to a number of humiliating regulations designed to enforce the Qur’an’s command that they ‘feel themselves subdued’ (Sura 9:29). This denial of equality of rights and dignity remains part of the Sharia, and, as such, are part of the legal superstructure that global jihadists are laboring through violence to restore everywhere in the Islamic world, and wish ultimately to impose on the entire human race.” (Spencer)

diyya: “The sum of money to be paid to the person who has suffered injury or to the heirs in the event of death.” (Atighetchi)

FATF:  Financial Action Task Force (FATF website)

Fai:  “In classical Islam, wealth taken peaceably from an enemy, either under the terms of a peace settlement or after fighting has ended. Fai was considered the right of the Prophet Muhammad originally. Later it was distributed by the community leaders according to what was considered to be in the best interests of Islam and Muslims.” (Esposito)

Fida’: “Ransom” (Brill)

FinCEN:  Financial Crimes Enforcement Network, Department of the Treasury (FinCEN website)

FIU: Financial Intelligence Unit. “A central, national agency responsible for receiving (and as permitted, requesting), analyzing and disseminating to competent authorities, disclosures of financial information:

“i. concerning suspected proceeds of crime and potential financing of terrorism, or

“ii. required by national legislation or regulation, in order to combat money laundering and terrorist financing.” (Schott)

Hadith:  “Report of the words and deeds of Muhammad and other early Muslims; considered an authoritative source of revelation, second only to the Quran (sometimes referred to as the saings of the Prophet)…”  (Esposito)

hawala:  “[An] underground banking system, which allows money transfer without actual money movement, or any wire transfer. There is nothing inherently illegitimate about the hawala system—it offers critically needed financial services in many remote corners of the globe and is used extensively by millions of law-abiding persons… But its nature makes it particularly susceptible to abuse by terrorists and other criminals.” (Greenberg)

Hezbollah: “Hezbollah (‘Party of G-d’) is a terrorist organization, based in Lebanon, whose goal is the destruction of Israel. In that pursuit it has attacked Israeli and Jewish targets worldwide. It is also responsible for infamous attacks against American military installations in Lebanon in the early 1980s.

“Hezbollah, a Shi’ite Muslim group, is financed and armed by Iran and enjoys full backing from Syria. Hezbollah was founded with the help of Iranian Revolutionary Guards who traveled to the Bekaa Valley in Lebanon in 1982 to fight Israel following the Israeli incursion into south Lebanon. According to its 1985 platform, Hezbollah advocates the establishment of an ‘Islamic Republic’ in Lebanon.” (Israel)

ijara: “To give something for rent.” (Kettell)

infaq: “Infāq literally means spending. It signifies any spending whether for good cause or bad. That is why spending by non-believers for opposing Islam, their spending on their wives, spending by hypocrites, spending by Muslims on their wives by way of dower and sustenance are all termed infāq. Infāq qualifies itself to become virtuous in case it is made for Allah’s pleasure. It should be done scrupulously without any desire for publicity.” (Hasan-uz-Zaman)

istisna’a: “A sale contract whereby the purchaser asks the seller to manufacture a specifically defined product, using the seller’s raw materials, at a given price.” (Kettell)

jihad:  “The term jihad is an Arabic verbal noun derived from jahada, meaning ‘to struggle,’ that is, to struggle with something that is disagreeable or else against something that is wrong.  While the frequently used expression ‘holy war’ is not a literal translation, it does summarize the essential idea of jihad.  The Muslim jurists give the most general definition of jihad as the Muslim believers’ exerting their abilities, talents, and power in struggling in the path of God using their resources of life, property, speech and all available instruments to make the Word of God prevail in this world.  Muslim jurists distinguish between a “greater jihad” which is the struggle against the world, the flesh, and the devil in the spiritual realm, and a “lesser jihad” consisting of open, physical warfare with the enemies of Islam or of the Muslims.  In the course of the revival of Islamic fundamentalism the doctrine of jihad has been invoked to justify resistance, including terrorist actions, to combat ‘un-Islamic’ regimes, or purported external enemies of Islam, such as Israel and the United States.”  (Anderson & Sloan)

kafir:  “One who is ‘ungrateful’ to God, an unbeliever, an athiest.  Almost all groups hold that a kafir will be condemned to Hell…”  (Newby)

Khadija: “The first wife of the Prophet Muhammad, and during their twenty-four years of married life his only wife. Khadija was a rich merchant’s widow, who first of all employed Muhammad in her service…” (Parrinder)

kharaj:  “The land tax.  When Muslims entered into the newly conquered territories, they imposed a tribute tax on the yield from the land along the same models as previous rulers.  This tribute tax was parallel to the jizya tax, or poll tax, paid by non-Muslims.  When the land-owners converted, the tax remained on the land and continued as a general levy…”  (Newby)

khums:  “Tax based on one-fifth of the war booty given by Muslims to Muhammad and his family.  After Muhammad’s death, khums was interpreted as an Islamic tax on profits of various sorts.  Most important in Shii Islam.  In the thirteenth century khums was split into two portions—one portion went to support indigent descendants of Muhammad, and the other portion went to the mujtahids, who were to give half to the imams and half to the poor and orphaned descendants of Muhammad.  Gave the Shii clergy in Iran in particular a source of income that granted them independence from the state and helped feul the Iranian revolution.”  (Esposito)

kufr: “Disbelief. A significant concept in Islamic thought, the word kufr or one of its derivatives appears in the Quran 82 times. Also means ‘ingratitude,’ the willful refusal to appreciate the benefits that God has bestowed.” (Newby)

maysir: Gambling

money jihad:  “Funding the jihad, i.e., financial jihad, or Al Jihad bi-al-Mal, is mandated by many verses in the Qur’an, such as chapter 61, verses 10.11: ‘you . . . should strive for the cause of Allah with your wealth and your lives,’ and chapter 49, verse 15: ‘The [true] believers are only those who . . . strive with their wealth and their lives for the cause of Allah.’ This has been reiterated throughout Islamic history and in recent times. ‘Financial Jihad [is] . . . more important . . . than self-sacrificing,’ according to Saudi and Muslim Brotherhood (MB) spiritual leader Hamud bin Uqla al-Shuaibi.

Qatar-based Muslim Brotherhood spiritual leader Yusuf al-Qaradawi, one of the most prominent Sunni scholars in the world today, reiterated the legal justification for ‘financial jihad [Al-Jihad bi-al-Mal]’ in a lecture he gave on 4 May 2002 in the United Arab Emirates (UAE). According to him, ‘collecting money for the mujahideen (jihad fighters . . . ) was not a donation or a gift but a duty necessitated by the sacrifices they made for the Muslim nation’.”  (Ehrenfeld & Lappen)

money laundering:  “Transfer (funds or goods) to conceal dubious or illegal origin, later recovering them from apparently legitimate sources.”  (Shorter Oxford)

mudarabah: “An investment fund arrangement under which the financiers act as the capital providers (rab al-mal) and the client acts as the mudareb (akin to an investment agent) to invest the capital provided by the rab al-mal and manage the partnership. The profit of the venture, which is based on the amount yielded by the fund that exceeds the rab al-mals‘ capital investment, can be distributed between the parties at a predetermined ratio but with any loss (subject to whether the loss is caused by the mudareb‘s negligence) being borne by the rab al-mal.” (Dewar)

murabaha: “A sale contract which fixes the price in terms of the seller’s cost plus a specified percentage markup. The seller must disclose all items of expense which are included in the cost if these are not known through custom.” (Vogel & Hayes)

musharaka: “Musharaka is a form of partnership between an Islamic bank and its clients whereby each party contributes to the partnership capital, in equal or varying degrees, to establish a new project or share in an existing one, and whereby each of the parties becomes an owner of the capital on a permanent or declining basis and is owed its due share of profits. Losses, however, are shared in proportion to the contributed capital.” (Kettell)

Muslim Brotherhood: “The Ikhwan al Muslimin is a nonstate Islamic fundamentalist group that seeks to replace existing secular governments in the Muslim world with Islamic regimes under which religious and political affiars would both be governed by the Shari’ah, that is, the traditional canon of Islamic laws. The name is applied to several territorial organizations, e.g., the Egyptian Muslim Brotherhood, the Syrian Muslim Brotherhood, and so on, that are formally independent of one another through all are historically derived from the original Ikhwan founded in Egypt by Hassan al Banna (1906-1949) in 1928…” (Anderson & Sloan)

Muslim Students Association: “Established in January 1963, the Muslim Students Association of the United States and Canada is one of the oldest and most influential Islamic organizations in North America. There are more than two hundred affiliated chapters at American and Canadian universities as well as many other Muslim student organizations that work closely with the MSA. A number of leading Muslim American local, regional, and national organizations and institutions have their roots in the MSA, including the Islamic Society of North America (ISNA).” (Cesari)

nisâb: “Minimum amount of property liable to payment of the Zakât…” (Summarized Sahih Al-Bukhari)

OFAC:  Office of Foreign Assets Control (OFAC website)

politically exposed person:  “PEPs are individuals who are or have been entrusted with prominent public functions in a foreign country, such as heads of state or government; senior politicians and party officials; senior executive, judicial, or military officials; and senior executives of state-owned corporations.” (World Bank)

riba: Interest. Annotations to one translation of the Koran (Ahmed Ali) define riba as, “Multiplying, increase, swell, expand (beyond the natural or original size), as in 22:5; excess such as surplus that comes to the surface like scum, as in 13:17; rabiyum, increased hold that over powers, as in 69:10; arba, more than the other; as in 16:92: Taj Muhit. All this points to unnatural or artificial increase. It is first mentioned in Makki Surah, 30:39, as lending money on interest to increase one’s capital through other’s wealth; and is explained at 2:275 as the opposite of trade, and at 3:130 as doubling and redoubling. By suffocating a person’s freedom of action and independence—another meaning of riba being asthma—it results in oppression, and is condemned in the strongest possible terms and forbidden.”

salam: “A sale whereby the seller undertakes to supply some specific goods to the buyer at a future date, in exchange for an advanced price fully paid at spot.” (Kettell)

shahid: “witness, martyr… The martyr who seals his belief with his death, fighting against the infidels is shahid throughout the Hadith literature at the great privileges which await him in heaven are readily depicted in numerous hadiths…” (Brill)

sharia:  “The Islamic code of religious law, based on the teachings of the Koran and the traditional sayings of Muhammad.”  (Shorter Oxford)

sovereign wealth funds: “Investment funds maintained by the governments of countries that run budget surpluses, usually because the nation exports more than it imports (e.g., oil-exporting countries). These funds act much like other institutional investors, except that their client is, directly or indirectly, a national government.” (Romero)

takaful: “Islamic cooperative insurance is not a contract of buying and selling, where a party offers and sells protection and the other party accepts and buys the service at a certain cost or price. Rather, it is an arrangement, whereby a group of individuals each pay a fixed amount of money, and then compensation for losses of members of the group are paid out of the total sum.” (Dar & Moghul)

tax:  “A contribution to State revenue, compulsorily levied on people, businesses, property, income, commodities, transactions, etc.”  (Shorter Oxford)

tribute: “Payments made by one state to another dominant state to prevent attack or in ongoing submission.” (Metzger & Coogan)

UNODC:  United Nations Office on Drugs and Crime (UNODC website)

ushr:  “Tithe or tenth; the land tax levied on the produce of agricultural land owned by Muslims in the premodern era.  Ushr was revived in Pakistan in the 1980s as part of the Islamization regime.”  (Esposito)

wakala: “Mandate, authorisation, is a contract (‘akd) by one contracting party, the muwakkil, commissions the other, the mandatory (wakīl) to perform some service for him.” (Brill)

zakah:  “Required almsgiving that is one of the five pillars of Islam.  Muslims with financial means are required to give 2.5 percent of their net worth annually as zakah.  To practicing Muslims, zakah connotes the path to purity, comprehension of material responsibility, and an enhanced sense of spirituality.  Zakah is used for the needy, for the propagation of the faith, to free slaves, to relieve debtors, to help travelers, and for the administration of the zakah, as well as other efforts approved by religious authorities.  The primary forms of wealth subject to zakah include gold, silver, livestock, agricultural produce, articles of trade, currency, shares and bonds, and other liquid assets.”  (Esposito)

zakat:  See zakah.


Aghnides, Nicolas P., Mohammedan Theories of Finance (New York:  Columbia University, 1916).

Anderson, Sean K. and Sloan, Stephen, Historical Dictionary of Terrorism, Second Edition (Lanham, Md.:  Scarecrow Press, 2002).

Atighetchi, Dariusch, Islamic Bioethics (The Netherlands: Springer, 2007).

Brill, E.J., Encyclopedia of Islam, New Edition (Leiden:  E.J. Brill, 1996).

Cesari, Jocelyne, Encyclopedia of Islam in the United States (Westport, Conn.:  Greenwood Press, 2007).

Dar, Humayon A., and Moghul, Umar F., The Chancellor Guide to the Legal and Shari’a Aspects of Islamic Finance (Great Britain: Harriman House, 2010).

Dewar, John, International Project Finance: Law and Practice (New York: Oxford University Press, 2011)

Ehrenfeld, Rachel and Lappen, Alyssa A., “Money jihad:  Financial Jihad = Shari’a Finance = The Fifth Generation Warfare (5GW),”  from Armed Groups: Studies in National Security, Counterterrorism, and Counterinsurgency, (U.S. Naval War College, June 2008), chapter 28.

Esposito, John, Oxford Dictionary of Islam (New York: Oxford University Press, 2003).

Greenberg, Maurice R., Terrorist Financing (Council on Foreign Relations: New York, 2002).

Hasan-uz-Zaman, Syed Muhammad, Economic Guidelines in the Qur’an (Islamabad: International Institute of Islamic Thought, 1999).

Israel: A Resource Guide (Anti-Defamation League: New York, 2009).

Kettell, Brian B., Introduction to Islamic Banking and Finance (Chippenham: John Wiley and Sons, 2011).

Metzger, Bruce M. and Coogan, Michael D., The Oxford Companion to the Bible (New York:  Oxford University Press, 1993).

Newby, Gordon D., A Concise Encyclopedia of Islam (Oxford:  Oneworld, 2002).

Parrinder, Geoffrey, A Dictionary of Non-Christian Religions (Philadelphia: The Westminster Press, 1971).

al-Qur’an, trans. Ahmed Ali, (Princeton, N.J.: Princeton University Press, 1994) p. 50.

Romero, Philip, Your Macroeconomic Edge: Investing Strategies for the Post-Recession World (New York: Business Expert Press, 2011).

Schott, Paul Allan, Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism, second edition (The World Bank: 2006).

Shorter Oxford English Dictionary, fifth edition (Oxford University Press:  2002).

Spencer, Robert, The Myth of Islamic Tolerance (Amherst, NY:  Prometheus Books, 2005).

Summarized Sahih Al-Bukhari, the Translation of the Meanings, Muhammad Muhsin Khan (Riyadh:  Islamic University, 1994).

Takeyh, Ray, “The Fatal Flaw in Iran’s Regime,” (International Herald Tribune: Aug. 3, 2005).

Vogel, Frank and Hayes, Samuel, Islamic Law and Finance (Boston: Kluwer Law International, 1998).

World Bank, Combating money laundering and the financing of terrorism: a comprehensive training guide, Volume 3, Part 1 (Washington D.C.:  World Bank Publications, 2009).

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