Posts Tagged ‘Hadith’

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Wednesday word: Istisna’a

June 6, 2012

Like salam, istisna’a is an Islamic contract that allows two parties to agree on a price now for a product delivered later (although Islam generally prohibits deferred payment sales or sales of objects that do not yet exist).

Specifically, istisna’a is defined by Islamic finance specialist Brian Kettell as “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.”*

One difference between istisna’a and salam is that is that istisna’a is used for major manufactured products, facilities, or equipment such as an oil rig, while salam is often used for agricultural or other objects.

However, while there is a marginal justification for salam in Islamic law, there is virtually none, if any, for istisna’a.  Kettell writes:

Similarly to Murabaha and Ijara, no direct support for the principle of Istisna’a can be found by studying the major sources of Sharia’a law.  In fact, the majority of religious schools argue that Istisna’a is inconsistent with Sharia’a law.  Only the Hanafi School accepts the Istisa’a contract and then merely because there is a need within society and customary practice (urf) to have an Islamically acceptable form of project finance.  Nothwithstanding the lack of juristic support for Istisna’a, it is still a widely employed method among Islamic banks.

In a 10 page document describing and justifying salam and istisna’a, Mufti Taqi Usmani (one of the two most notorious sharia finance proponents in the world) cites only one Hadith to justify salam, and none to justify istisn’a.  Usmani makes one vague reference to the Ottoman Empire as having utilized istisna’a.  Although Mr. Usmani supports jihad, sharia, and Islamic supremacy, his apparent support for istisna’a contracts may be based upon something other than Islam.

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

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Wednesday word: Salam

May 2, 2012

Salam is a type of forward contract in sharia finance that allows a buyer to pay now for goods to be delivered later.  In general, Islam bans the purchase of any object that the seller does not currently possess, and salam is presented by sharia finance advocates as a narrow, clearly defined exception to the general rule.

Kettell defines salam as “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 also says that the exact price, quality, quantity, and delivery date should be included in a salam contract, and references an unspecified passage from the Hadith that says “He who sells on Salam must sell a specific volume and a weight to a specific due date.”

Yet selling on salam appears to contradict the Islamic reliance on possession before a valid sale can be made.

The fact is that “business” by any normal measure is impractical without a forward contract.  The business elites of the ummah have realized this and have simply determined that in this instance, the exception is the rule.

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

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The Hadith’s ban on forward contracts

April 25, 2012

Agreeing upon a price now for merchandize to be produced or delivered later, which is a pretty common, uncontroversial, and healthy tradition in free market economics, is banned by the Hadith, the collection of sayings and actions of Muhammad.

The following comes from one of the most important and widely accepted Hadith among Muslims, the Sahih Al-Bukhari, Book 34 (The Book of Sales [Bargains]):

Chap. 33.  Al-Gharar (the sale of what is not present) and Habal-il-Habala (i.e. the sale of what is in the womb of an animal.)

1022.  Narrated ‘Abdullah bin’Umar:  Allah’s Messenger forbade the sale called ‘Habal-il-Habala which was a kind of sale practiced in the Pre-Islamic Period of Ignorance.  One would pay the price of a she-camel which was not born yet and would be born by the immediate offspring of an extant she-camel.

Similar language appears in Book 10 (The Book of Transactions), Chap. 8, of the Sahih Muslim, another widely agreed upon Hadith, which states that “it is invalid to sell the commodity before taking possession of it” in reference to grain.

It is unfortunate for the world’s Muslims and their economic development that Muhammad made this choice that forever limited the types of transactions available to willing buyers and sellers operating in a free market.

One Western source describes the benefits of production contracts which Muhammad seemed unable to understand:

There are several potential advantages for producers who may consider a production contract. Such contracts may provide for a more stable income for the producer by reducing traditional marketing risks. Such contracts may allow a producer to benefit from technical advice, managerial expertise and access to technological advances provided by the contractor. An agricultural production contract may provide the producer with a guaranteed market, provided that the commodities are produced in accordance with the contract. Finally, such contracts may allow a producer to increase the volume of his business with limited capital since the contractor may often supply the necessary production inputs…

From the contractor’s perspective, production contracts may provide an orderly flow of uniform commodities so as to allow the contractor to control production costs. And such contracts may allow contractors to better respond to changing market conditions. The use of such contracts may allow a contractor to protect its investment in genetics and other intellectual property associated with a particular commodity.

Contemporary sharia financiers have tried to distinguish a forward contract from a futures contract, saying that a forward contract is clear enough to satisfy the requirements of sharia law.  However, that interpretation still seems at odds with the plain language of the text above.  More on the contract loopholes of sharia finance (salam and istisna’a) later…

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Pak pastor told to convert, pay, or die

May 8, 2011

The jizya rears its ugly head again.  With the Islamic revivalism of the Arab Spring, we’re likely to see more and more demands for jizya against non-Muslims. The governments appear to be increasingly unable to protect the rights of religious minorities, and acting on behalf of Christians would undermine their political position in relation to the Islamists.

Here are the relevant excerpts from The New American on May 4:

The April 27 attack on Rev. Ashraf Paul and his family left one son, Sarfraz Paul, critically wounded after he was struck by three bullets. The attack from the Islamic group Tehreek-e-Gazi Bin Shaheed (TGBS) came after Rev. Paul refused to either convert to Islam, or pay a supposed “poll tax.”

The attack on the Paul family is a far from isolated incident: The overt, and growing, persecution of Christians in Pakistan has long made it clear that Pakistan’s status as an “ally” against the Islamic Jihad is a farce…

A similar report of the attack has been posted by the Pakistan Christian Post, with the added clarification that the Jihadists had allegedly not only told Rev. Paul to shut down his ministry, but also to convert to Islam: “Pastor Ashraf Paul has received threat calls and letter before this incident for converting to Islam or pay[ing] money.” As noted elsewhere, the supposed “poll tax” is nothing other than a demand that Rev. Paul pay the Jizya — a “tax” which a Muslim ruler extracts from his non-Muslim citizens.

Muslims would have us believe that jizya is for the “protection” of non-Muslims.  If it’s for our protection, why is it always accompanied by a death threat?  (For the answer, see the Sahih Muslim, Book 19, Number 4294.)

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Terror donations followed laws of Allah

March 13, 2011

The court defense of two terrorist financiers in Indonesia show that they are true believers in the rewards of the money jihad.

Donors behind Abu Bakar Bashir’s funding operation for a terrorist training camp say that they were making their donations in order to obtain “rewards from Allah.”

Their actions were perfectly legal, even required, within the context of sharia law.  Remember what the profiteer Muhammad said, “The warrior gets his reward, and the one who equips him gets his own reward and that of the warrior” (Sunan Abu Dawud, Book 14 No. 2520).  The jihadist financier is doubly blessed, and these two defendants believe it to their core.

From the Jakarta Globe on Mar. 9 (h/t RoP):

Two men accused of channeling funds to firebrand cleric Abu Bakar Bashir to set up a paramilitary camp in Aceh firmly maintained their innocence in two separate hearings at the South Jakarta District Court on Tuesday.

Defendant Abdul Haris, aka Haris Amir Falah, the leader of the Jakarta branch of Jemaah Anshorut Tauhid, an Islamic organization founded by Bashir, and Dr. Syarif Usman, who joined JAT last year, said they had simply made donations to a good cause.

Abdul told the court that he found himself faced with a dilemma. “If I move forward and follow the orders of Allah, I will be charged under the Anti-Terror Law. But if I turn back on His orders, then I have to face His wrath.”

He is facing nine years in jail for allegedly collecting money from donors and channeling it to Bashir.

“When we have to choose between the regulations and laws of Allah, and those that are man-made, any good Muslim will choose the laws as written out by Allah,” he said.

At a separate hearing, Syarif, whom prosecutors have accused of providing Rp 200 million ($22,740) for the Aceh camp, also presented his defense, insisting that his donation was based on Shariah law, and therefore, criminal charges should not be laid upon him.

“Who owns the land of Indonesia? We acknowledge that Allah has created the sky, the earth and all its contents,” said Syarif, who is also facing a nine-year sentence.

“As for this trial, it can deliver any verdict it wants, because my donation is meant to seek rewards from Allah.”

In their handwritten defense, containing mainly verses from the Koran, neither of the men mentioned Bashir.

Asludin Hatjani, a lawyer representing both defendants, said the terrorism charges were groundless because the prosecution failed to prove that the money had been channeled to the Aceh camp, which was raided by police in February last year.

In the indictment prepared by prosecutors, the two are accused of collecting the funds after Bashir allegedly told them: “We are launching a program of major jihadi activities. If you have extra money, you can donate to us and the biggest returns will come from God.”

The panel of judges on the case have said they will deliver their verdict on Friday.

A third suspect, Hariadi Usman, is also on trial in South Jakarta on similar charges .

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Wage jihad with your life, wealth, and words

December 19, 2010

Islamic law is full of verses urging Muslims to strive with their wealth against the infidel in order to achieve salvation.  Take for instance the Koran 9:20*:

It’s no wonder then that fundraising appeals by Muslim terrorists are chock-full of references to Islamic texts.  The latest example comes from the Global Islamic Media Front (GIMF), which serves as Al Qaeda’s press office.

According to Jihadology, Views from the Occident, and The MEMRI Blog on Dec. 7, GIMF released a lengthy appeal for donations to support jihad.  (MEMRI may have supplied the original source material, but that wasn’t clear from these blog posts.)

This is a longer text than we would normally post on Money Jihad, but it goes right to the core of the money jihad, Al Jihad bi-al-mal, and must be retained here for the record.  Here’s GIMF’s message as posted by Views from the Occident:

A Message to Those Who Spend in Allah’s Cause

All praise be to Allah, the Lord of all that exists, who has said in His Wise Book:

يُرِيدُونَ أَن يُطْفِؤُواْ نُورَ اللّهِ بِأَفْوَاهِهِمْ وَيَأْبَى اللّهُ إِلاَّ أَن يُتِمَّ نُورَهُ وَلَوْ كَرِهَ الْكَافِرُونَ

“They wish to extinguish Allah’s Light with their mouths, but Allah will not allow except that His Light should be perfected, even though the infidels hate it.” (At-Tawbah: 32)

He also said:

ادْعُ إِلِى سَبِيلِ رَبِّكَ بِالْحِكْمَةِ وَالْمَوْعِظَةِ الْحَسَنَةِ وَجَادِلْهُم بِالَّتِي هِيَ أَحْسَنُ إِنَّ رَبَّكَ هُوَ أَعْلَمُ بِمَن ضَلَّ عَن سَبِيلِهِ وَهُوَ أَعْلَمُ بِالْمُهْتَدِينَ

“Invite to the Way of your Lord with wisdom and fair preaching, and argue with them in a way that is better. Truly, your Lord knows best who has gone astray from His Path, and He is the Best Aware of those who are guided.” (An-Nahl: 125)

And may peace and blessing be upon the Messenger of Allah, Muhammad, the son of Abdullah, who said:

“Wage Jihad against the idolators with your wealth, your lives, and your words.” (Ahmed, Abu Dawud)

Read the rest of this entry ?

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Second verse, same as the first, a little bit quieter, a little bit worse

December 17, 2010

Here’s a music-free version of our Jesus-Muhammad tax video:

The earlier version was disabled by YouTube because it included music from Sony.  But like life under Islam, it’s no fun without music.