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This fatwa permits the usage of Mudharabah Musytarakah agreements to underpin insurance policies.

This fatwa states that a tabarru' agreement is an agreement that must be attached to all insurance (life, damage, and reinsurance) products. An insurance tabarru' agreement is all forms of agreement executed between policy-holders. The fatwa defines a tabarru' agreement as an agreement executed in the form of a gift (hibah) for the purposes of prosperity and cooperation between participants, not for commercial purposes.

This fatwa defines an ijarah as a benefit-transfer agreement pertaining to an object for a certain term, with a rental (ujrah) cost, that does not transfer ownership of the object itself. It also defines an ujrah review as a review of the quantum of the ujrah in the ijarah agreement between the shari'a financial institute and customer after a certain period. The fatwa states that an ujrah review may be conducted between the parties to an ijarah agreement provided that:

1. there is a change to the term of the ijarah agreement;
2. there is a strong indication that if a review is not conducted one of the parties will suffer a loss; and
3. both parties accede.

A review of the quantum of the ujrah after a certain period is permitted, provided that:

1. the ujrah agreed to for one term of the ijarah agreement may not be increased;
2. the quantum of the ujrah may be monitored for the next term pursuant to a formula of which both parties are aware;
3. the review is conducted after a certain agreed-upon period of time has passed, as provided in the agreement; and
4. in the event there is a change to the rental cost, the rental cost for the first term must be explained, and the rental cost for the next period must be based on a clear formula that does not generate conflict between the parties.

This fatwa defines a shari'a bond as a long-term security based on shari'a principles issued by a public company to an investor (bond-holder) that obliges the company to pay to the investor a fee and repay investment funds at a maturity date. A convertible mudharabah shari'a bond is a shari'a bond issued by a public company based on mudharabah principles for the purpose of complementing its work capital requirements, with the option that the investor can convert bonds into shares in the public company at the maturity date. A shari'a share is a certificate showing proof of ownership of a portion of a company, issued by the company whose business activities and mode of management are not contrary to shari'a principles.

The public company issuing convertible mudharabah shari'a bonds is the mudharib (manager of funds), while the bond-holder is the shahibul mal (investor). In the event the bond-holder exercises its right to convert its bonds into shares in the company, it will do so pursuant to a musyarakah agreement, where the bond-holder becomes a share-holder.

This fatwa defines 'shari'a share-purchase rights' (waran) as stock issued by a company that provides rights to holders of stock listed on the Shari'a Stock Listing (Daftar Efek Syariah) to order shares from a public company at a certain price for six months or more from their date of issuance. The fatwa permits a public company to issue shari'a share-purchase rights, and for holders of those rights to sell their rights to another party.  Share-purchase right-holders may only exercise that right if the resulting share can be categorised as shari'a stock.

The Muwaṭṭaʾ is the first extant treatise on Islamic law, written by the eighth-century Medinan jurist Mālik b. Anas (d. 179/795). It provides an unparalleled window into the life of the early Muslim community of Medina—where the Prophet Muḥammad lived and died after immigrating from Mecca—as well as the rituals, laws, and customs that its members upheld years after his death. Harvard’s Program in Islamic Law, in conjunction with Harvard University Press, published an English translation of the Muwaṭṭaʾ in 2019, edited and translated by Professors Mohammad Fadel and Connell Monette. This translation is based on the recently published critical edition of the Muwaṭṭaʾ, The Royal Moroccan Edition (Rabat: Ministry of Endowments, 2013). With its extensive notes, the English edition is intended to make this important early legal text widely accessible to a broad spectrum of readers, including those interested in both legal history and Islamic Studies. This Online Companion to the Muwaṭṭaʾ makes the full texts of both the original Arabic edition and its English translation freely available online. We gratefully acknowledge the Moroccan Ministry of Endowments and Islamic Affairs for permissions to make the full Arabic text available online.

Image 1: Kingdom of Morocco National Library, MS No. J787: Colophon of the Muwaṭṭaʾ manuscript, copied by Ibn al-Ṭallāʿ, dated 595 AH.

Image 2: Kingdom of Morocco National Library, MS No. J787, Folio 1: Excerpt of manuscript of the Muwaṭṭaʾ, copied by Ibn al-Ṭallāʿ, dated 595 AH.

Image 3: Kingdom of Morocco National Library, MS No. D2911, Folio 1: Excerpt of manuscript of the Muwaṭṭaʾ, copied by Ibn al-Labbād, dated 613 AH.

This source is part of the Online Companion to the print edition al-Muwaṭṭaʾ, the Royal Moroccan Edition: The Recension of Yaḥyā Ibn Yaḥyā al-Laythī(Harvard Series in Islamic Law), edited and translated by Mohammad Fadel and Connell Monette (PIL/HUP, 2019).

This fatwa acknowledges that brokerage in the property market is becoming increasingly prevalent, and that shari'a financial institutions have requested a fatwa on the subject. The fatwa permits brokerage, on the following conditions:

1. a brokerage agreement must be free of confusion and irregularities;
2. the authorised duties of the broker must be clear in the brokerage agreement;
3. the term of a brokerage agreement must be clear;
4. brokers must execute certain duties that form the basis of their payment;
5. owners of assets and intermediaries are to have sufficient knowledge of the assets for sale.

The fatwa also sets out conditions for brokers who choose to involve a shari'a financial institution in the brokerage process.

This fatwa acknowledges that previous DSN-MUI fatwas on mortgages had not accommodated the increase in mortgage-based businesses, and that shari'a financial institutions required a fatwa on the subject.

The fatwa states that all forms of financing/disbursement of funds by a shari'a financial institution can be guaranteed by collateral (rahn), but that security guarantees must be items of value, whether stationary or mobile, including state shari'a securities and other shari'a securities. Debts must be binding, quantified, and have a clear term. They may not, however, be increased if a time extension is granted. Shari'a financial institutions may issue a fine to a customer if they breach the agreement or are tardy in executing their contractual obligations.

This fatwa acknowledges that in order to obtain benefit from an object, often an ijarah (rental) agreement is necessary. The fatwa mandates that consent and accedence are required from both parties to the agreement, either verbally or in another form. The benefit of the object or service must be given a financial value and be practical to implement. The fatwa also sets out the obligations of shari'a financial institutions and customers as parties to such an agreement.

This fatwa defines a registered mortgage (rahn tasjily) as a guarantee (or collateral) in the form of an object in lieu of a debt. The collateral is transferred pursuant to an agreement stating that the object transferred to the mortgagee (murtahin) is only the proof of legal ownership, while the collateral (marhun) is to remain in the physical control, and at the disposal, of the mortgagor (rahin).

The fatwa states that rahn tasjily may be conducted pursuant to the following provisions:

1. the mortgagor transfers proof of legal ownership of an object to the mortgagee, which becomes collateral;
2. transfer of the collateral in the form of proof of legal ownership or a certificate does not transfer ownership to the mortgagee;
3. the mortgagor provides the mortgagee with the authority to sell the collateral, either via auction to to another party pursuant to shari'a principles, in the event of a default or inability to repay the relevant debt;
4. usage/disposal of the collateral by the mortgagor must be fair and in accordance with the parties' agreement;
5. the mortgagee may incur maintenance and storage fees, which are to be borne by the mortgagor, pursuant to an ijarah (rental) agreement;
6. the quantum of those fees is not to be related to the quantum of the debt owed;
7. the mortgagee may incur other necessary and incidental costs; and
8. the relevant insurance is to be covered by the mortgagor.

This fatwa acknowledges that the distribution of profits from an undertaking between parties in a joint-venture may be based on the principle of profit sharing, as well as the principle of net revenue sharing. The fatwa permits both approaches, but favours net revenue sharing for profit distribution.

This fatwa defines a kafalah as a guarantee provided by an insurer (kafil) to a third party (makful lahu) to meet the obligations of the second party/insured (makful 'anhu, ashil). It also defines a Kafalah Bil Ujrah letter of credit as a guarantee provided by a shari'a financial institute pursuant to an export/import transaction made by a customer based on a kafalah agreement. Pursuant to the guarantee the shari'a financial institute also obtains a fee (ujrah).

This fatwa acknowledges that shari'a financial institutions declare their murabahah financing profits either as a proportion or an annuity. As one of these approaches has proven to be problematic for the financial industry and society, however, the fatwa acknowledges the need for an explanation from a shari'a perspective of the two approaches. The fatwa defines the proportional method (Thariqah Mubasyirah) as multiplying a percentage of the profit by those accounts payable that have been successfully billed, while it defines the annuity method (Thariqah al-Hisab al-Tanazuliyyah/Thariqah al Tanaqushiyyah) as multiplying a percentage of the profit by the remainder of the cost price not yet charged. The fatwa permits shari'a financial institutions to adopt either approach, provided they adhere to the following prescribed conditions:

1. The proportional approach, as used by traders, is permissible provided it is conducted pursuant to standard trading practice;
2. Shari'a financial institutions may adopt either approach, provided they do so in accordance with the standard shari'a financial institution practice;
3. The selection of a profit declaring approach in a shari'a financial institution must take heed of what is best for the development of that shari'a financial institution;
4. The preferred approach for a shari'a financial institution in a period of growth is the annuity-based approach; and
5. In the event a shari'a financial institution adopts the annuity-based approach, a portion of the profits must be from the repayment term, and may not be declared in full before all accounts payable have been paid.

This fatwa seeks to provide clarity and certainty in regards to the adoption of two different accounting systems: cash basis (declaration of costs and revenue at the time) and accrual basis (declaration of costs and revenue distributed periodically). The fatwa also acknowledges that both systems are applicable for the purpose of distribution of profits in shari'a financial institutes.

The fatwa acknowledges that both systems are permissible under Islam. It notes, however, that an accrual basis system is preferable for recording purposes, while a cash basis system is preferable for distributing profits based on actual receipts. Either way, parties must agree in writing as to which system they wish to adopt.

This fatwa permits the provision of reserve funds, provided those funds derive from profits of the relevant shari'a financial institute. Such an approach, therefore, eliminates the possibility of having an adverse effect on the customer. The fatwa also states that, for tax purposes, a shari'a financial institute may source such reserve funds from its overall profits.

This fatwa permits a Wakalah bil Ujrah agreement to be executed between an insurance company and a policy-holder as the basis of the insurance policy agreement between the parties. It defines a Wakalah bil Ujrah as the provision of authority from a policy-holder to an insurance company to manage the funds of the policy-holder for a fee.

This document is the first draft of Criminal Procedure Bill prepared and adopted by the parliament and sent to the Guardian Council for review.

On March 6, 2017, President Donald J. Trump, issued a second Executive Order which barred, with certain exceptions, entry to the United States of nationals from predominantly Muslim countries. This order barred nationals from six Muslim-majority countries (the original seven except for Iraq), suspended the entry of refugees for 120 days, and reduced the number of refugees who can be admitted to the United States by more than half. The Plaintiffs (the International Refugee Assistance Project; HIAS, Inc., the Middle East Studies Association; Muhammed Meteab; Paul Harrison; Ibrahim Ahmed Mohomed; John Does Nos. 1 & 3; and Jane Doe No. 2) filed a Motion for a Temporary Restraining Order or a Preliminary Injunction. In an opinion by U.S. District Judge Theodore D. Chuang, the United States District Court for the District of Maryland found that the revised Executive Order should be halted because the Plaintiffs are likely to establish that Section 2(c) of the revised Executive Order, which issued the travel ban against citizens of the six designated Muslim-majority countries, violates the Constitution and federal law, specifically the Establishment Clause and Immigration and Nationality Act, 8 U.S.C. §§ 1101-1537 (2012).

The Plaintiffs argued that they had standing to assert the claim that the revised Executive Order violated the Establishment Clause because the “anti-Muslim views” underlying the Executive Order caused them stress and anxiety. The Court acknowledged that for “purposes of an Establishment Clause claim, non-economic, intangible harms to “spiritual, value-laden beliefs” can constitute a particularized injury sufficient to support standing. Suhre v. Haywood Cty., 131 F.3d 1083, 1086 (4th Cir. 1997). Because the harm suffered by the individual Plaintiffs is “fairly traceable to the challenged conduct” in that the revised Executive Order will result in the disfavoring of Islam, the Court found that the Plaintiffs had standing to assert an Establishment Clause claim.

The Court further determined that in order to withstand an Establishment Clause challenge under the Lemon v. Kurtzman, 403 U.S. 602, 91 S. Ct. 2105, 29 L. Ed. 2d 745 (1971) test, (1) an act must have a secular purpose, (2) “its principal or primary effect must be one that neither advances nor inhibits religion,” and (3) it must not “foster ‘an excessive government entanglement with religion.’” Id. at 612-613 (citations omitted). The Court found that the Plaintiffs presented a convincing case that the revised Executive Order fails the Lemon test because there is substantial, direct evidence that the travel ban was motivated by a desire to ban Muslims as a group from entering the United States. The Plaintiffs primarily relied on statements made by President Trump and his advisors, including a “Statement on Preventing Muslim Immigration” on his campaign website “calling for a total and complete shutdown of Muslims entering the United States until our representatives can figure out what is going on,” an interview with CNN in which Trump professed that he believed “Islam hates us” and that the United States had “allowed this propaganda to spread all through the country that [Islam] is a religion of peace,” and a written statement about the December Berlin attack in which he lamented that people “prepared to celebrate the Christmas holiday” were killed by “ISIS and other Islamic terrorists [who] continually slaughter Christians in their communities and places of worship as part of their global jihad.” Many of the statements about Islam, including references to Islam generally and to jihād, tend to refer to false conceptions of Islamic law or sharīʿa as inherently violent.

Rejecting the argument about neutrality on its face, the Court granted in part and denied in part the Plaintiffs’ motion. The Court issued a preliminary injunction barring enforcement of Section 2(c) of the Executive Order.

Editors’ Note: Many of the statements about Islam, including references to Islam generally and to jihād, tend to refer to false conceptions of Islamic law or sharīʿa as inherently violent.

This fatwa permits financial loans obtained via a mortgage, and outlines the obligations on the mortgagor and mortgagee until the loan is repaid.

This fatwa provides a set of guidelines for executing a mudharabah financing agreement. A mudharabah financing agreement entails one party (the financier) acting as the financial backer, and the other (the customer) as the manager of the venture. The two parties then share in the profits resulting from the venture, pursuant to the terms agreed upon in the contract.

The fatwa provides that the financier may not manage the venture or project, but has the right to foster and monitor the project. It also sets out contractual requirements to which all mudharabah agreements must adhere, including a statement of intent, what may constitute financial capital, as well as profit and how profit is to be shared by the parties. Damages are generally not available pursuant to a mudharabah agreement, unless loss has been incurred as a result of deliberate misconduct, negligence or a contravention on the part of one of the parties to the agreement.