Banking with Sharia Law

Islam rules everything including banking. Now the West is getting neck deep into it. Lots of links below as to what's it all about.

TownHall.com

Monday, December 3, 2007

Shariah's Trojan Horse

By Frank J. Gaffney, Jr.

Suddenly, a new national debate is beginning about the national security, economic and other implications of Persian Gulf potentates using their petrodollars to buy up strategic American assets. Most recently, the Emir of Dubai’s purchase at fire-sale prices of 4.9 percent of the largest U.S. bank, Citigroup, has caused a level of unease not seen since he tried to buy his way into a large number of this country’s port facilities.

Almost completely unremarked thus far has been a parallel – and in many ways far more insidious – effort to penetrate, influence and dominate America’s capital markets: so-called “Shariah finance.” Some estimates suggest that there are approaching $1 trillion now being invested around the world under this rubric. If present trends continue, all other things being equal, such funds may grow to many times that amount within a few years.

Shariah is, of course, the term used by adherents to the totalitarian ideology practiced by the Saudi Wahhabis, the Iranian mullahs and the Taliban to describe the all-encompassing theocratic code they use to justify repressive rule at home and to extend their dominance elsewhere. While it is often depicted by its promoters as Koranic in character, in fact, it is largely man-made, the product of dictates and rulings by caliphs and scholars over many centuries.

For non-Muslims, Shariah is best known for its sanction for the brutalization of women, homosexuals and Jews. Beheadings, amputations, flagellation and stoning are among the prescribed punishments for those who transgress this barbaric code, punishments plucked from primitive tribal practices in the Arabian deserts dating back to medieval times.

Read the Rest:

Frank Gaffney Jr. is the founder and president of the Center for Security Policy and author of War Footing: 10 Steps America Must Take to Prevail in the War for the Free World .

http://www.townhall.com/columnists/FrankJGaffneyJr/2007/12/03/shariahs_trojan_horse?page=full&comments=true

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GLOBAL BANKS ADOPTING ISLAM

Patrick Wood
December 14, 2007
NewsWithViews.com

The Bible warns that “… the love of money is the root of all sorts of evil” (1 Ti. 6:10) So, just when you think you have just about seen it all, something even more shocking turns up. Like this…

Either global bankers are seducing Islamic dictators, or vice versa. Even if they are seducing each other at the same time, the result will be the same: Islamic/Shari’a banking is coming to the United States and other western nations, thanks to global banks such as Citigroup, HSBC, Deutsche Bank, Morgan Stanley and Goldman Sachs.

With Great Britain now pledging to become the Islamic banking center of the world, the stampede by all global banks to enter the world of Islamic banking is well underway.

Western banking met Islam many decades ago, but only began to sleep with her a few years ago. Since then, it is has become a wanton and open affair.

The implications for the west, and especially for the United States, are staggering. Because all Islamic banking products must be created and offered according to strict Shari’a law, global banks are doing for Islam what it could never do on its own: give legitimacy to Shari’a and infiltrate it into the fabric of western society.

What is Islamic banking?

Simply put, “Islamic banking and finance” creates, sells and services products that are in strict accordance with Shari’a. In the Islamic culture, it is referred to as “Shari’a finance” and covers the practices of banking, investment, bonds, loans, brokerage, etc.

To insure Shari’a compliance, banks must hire Shari’a scholars to review and approve each product and practice as “halal”, the Muslim equivalent of kosher in Judaism. Because there is a shortage of such scholars, there is competition between banks to find the best expert to sit on their boards of directors. This provides the highest legitimacy to each ruling because it is made at the director rather management level.

It should be noted that most of these scholars are from the school of radical Wahhabi/Salafi Shari’a in Saudi Arabia and elsewhere, holding views diametrically opposed to the basic values of Western civilization.

Shari’a finance has many differences from orthodox banking: Notably, it cannot charge interest (usury) and it calls for alms giving (zakat). It also calls for avoidance of excessive risk and may not be associated in any way with gambling, drinking alcohol, eating pork, etc.

Zakat demands a tithe of 2.5 percent of revenue be donated to Islamic charity. If western banks follow this rule, their contributions will be staggering. It is certain that a portion of this money will end up in the hands of radical Muslims who are sworn to destroy the U.S. and replace its government with Shari’a law.

Shari’a finance is a recent phenomenon. There were very few Islamic banks prior to 1980. However, with the Khomeini revolution in Iran in 1979, Shari’a was summarily imposed throughout Iran and Shari’a finance took off.

The dark side of Shari’a

Shari’a is the legal and judicial system of Islam that is brutally imposed on many Islamic countries in the middle east. It is the specific embodiment of the totalitarian ideology practiced by the Taliban, Iranian Mullahs and Saudi Wahhabis.

Shari’a is perpetuated by claiming to have its roots in the Koran, but in fact it is mostly the product of rulings and dictates made by Islamic scholars and caliphs over several centuries.

For non-Muslims, Shari’a is best known for its medieval, harsh brutality. Many rulings handed down by Shari’a courts have shocked the western world, for instance:

• The December, 2007 “teddy bear” case in Sudan, where a British teacher was sentenced to 40 lashes and a year in jail for allowing her students to name their teddy bear “Mohammad.” Islamic mobs demonstrated in the streets and called for her execution.
• The November, 2007 case where a 19 year old gang-rape victim in Saudi Arabia received a sentence of 200 lashes for riding in the car with her rapists.
• In 2006, a 34 year-old mother was forcibly raped and ultimately tried and convicted of adultery, and was ordered to be stoned to death.

Shari’a demands total and unquestioned submission. Its subjects are told that Shari’a is given by Allah and that whatever befalls them (good or bad) is Allah’s will. To question a judgment under Shari’a (right or wrong) is to question Shari’a itself and will only bring harsher punishment. If a person receives harsh punishment for something they didn’t do, the rationale is that Allah could and would have prevented it if that had been his will. This fatalistic and deterministic approach allows Shari’a rulers to get away with virtually any thing that enters their head.

To the average western mind, Shari’a is no more than a medieval, barbaric code that somehow survived to the 21st century. It flies in the face of western law, philosophy, liberty and freedom. Furthermore, it is the vehicle used to call for the complete destruction of the west and in particular the United States of America, which then will be replaced by Shari’a dictatorships.

Read the Rest:
© 2007 Patrick Wood - All Rights Reserved

http://www.newswithviews.com/Wood/patrick29.htm

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Islamic Economics: What Does It Mean?

by Daniel Pipes
Jerusalem Post
September 26, 2007

While the outside world hardly noticed, a significant and rapidly growing amount of money is now being managed in accord with Islamic law, the Shari'a. According to one study, "by the end of 2005, more than 300 institutions in over 65 jurisdictions were managing assets worth around US$700 billion to US$1 trillion in a Shari'ah-compatible manner."

Islamic economics increasingly has become force to contend with due to burgeoning portfolios of oil exporters and multiplying Islamic financial instruments (such as interest-free mortgages and sukuk bonds). But what does it all amount to? Can Shari'a-compliant instruments challenge the existing international financial order? Would an Islamic economic regime, as an enthusiast

claims, really imply an end to injustice because of "the State's provision for the well-being of all people"?To understand this system, the ideal place to start is Islam and Mammon, a brilliant book by Timur Kuran, written when he was (ironically, given heavy Saudi backing for Islamic economics) King Faisal Professor of Islamic Thought and Culture at the University of Southern California.

Now teaching at Duke University, Kuran finds that Islamic economics does not go back to Muhammad but is an "invented tradition" that emerged in the 1940s in India. The notion of an economics discipline "that is distinctly and self-consciously Islamic is very new." Even the most learned Muslims a century ago would have been dumbfounded by the term "Islamic economics."

The idea was primarily the brainchild of an Islamist intellectual, Abul-Ala Mawdudi (1903-79), for whom Islamic economics served as a mechanism to achieve many goals: to minimize relations with non-Muslims, strengthen the collective sense of Muslim identity, extend Islam into a new area of human activity, and modernize without Westernizing.

As an academic discipline, Islamic economics took off during the mid-1960s; it acquired institutional heft during the oil boom of the 1970s, when the Saudis and other Muslim oil exporters, for the first time possessing substantial sums of money, provided the project with "vast assistance."

Proponents of Islamic economics make two basic claims: that the prevailing capitalist order has failed and that Islam offers the remedy. To assess the latter assertion, Kuran devotes intense attention to understand the actual functioning of Islamic economics, focusing on its three main claims: that it has abolished interest on money, achieved economic equality, and established a superior business ethic. On all three counts, he finds it a total failure.

1) "Nowhere has interest been purged from economic transactions, and nowhere does economic Islamization enjoy mass support." Exotic and complex profit-loss sharing techniques such as ijara, mudaraba, murabaha, and musharaka all involve thinly disguised payments of interest. Banks claiming to be Islamic in fact "look more like other modern financial institutions than like anything in Islam's heritage." In brief, there is almost nothing Islamic about Islamic banking – which goes far to explain how Citibank and other Western majors host far larger Islam-compliant deposits than do the specifically Islamic banks.

2) "Nowhere" has the goal of reducing inequality by imposition of the zakat tax succeeded. Indeed, Kuran finds this tax "does not necessarily transfer resources to the poor; it may transfer resources away from them." Worse, in Malaysia, zakat
taxation, supposedly intended to help the poor, instead appears to serve as "a convenient pretext for advancing broad Islamic objectives and for lining the pockets of religious officials."
3) "The renewed emphasis on economic morality has had no appreciable effect on economic behavior." That's because, in common with socialism, "certain elements of the Islamic economic agenda conflict with human nature."

Kuran dismisses the whole concept of Islamic economics. "[T]here is no distinctly Islamic way to build a ship, or defend a territory, or cure an epidemic, or forecast the weather," so why money? He concludes that the significance of Islamic economics lies not in the economy but in identity and religion.

The scheme "has promoted the spread of antimodern … currents of thought all across the Islamic world. It has also fostered an environment conducive to Islamist militancy."
Indeed, Islamic economics possibly contributes to global economic instability by "hindering institutional social reforms necessary for healthy economic development."

In particular, were Muslims truly forbidden not to pay or charge interest, they would be relegated "to the fringes of the international economy."

In short, Islamic economics has trivial economic import but poses a substantial and malign political danger.

http://www.danielpipes.org/article/4973

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The Risky Business Of Islamic Finance

Tell that to Gordon Brown.

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As Oil Revenues Boom, Islamic Banking Goes Global

Lee Hudson Teslik | 22 Aug 2007

Caribou Coffee, the second-largest U.S. java seller, seems at first blush like a fairly ordinary American company. The chain was founded in 1992 in the small town of Edina, Minn., the brainchild of idealistic newlyweds, and has since expanded to over 400 coffeehouses in 18 states. Caribou's menu is muffins and lattes -- not an Arabic coffee in sight. It may come as a surprise, then, to know that Caribou Coffee is "Shariah compliant," one of the largest American businesses to run its operations in accordance with Islamic law.

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NAB, clitoridectomy Mufti and sharia - Part A

Written by Circe

Friday, 07 December 2007

The NAB is another organisation bringing Sharia into Australia and privileging Muslims above others again in direct contradiction to Australia’s egalitarian values. NAB has joined Islamic countries, Islamic ‘charities’ (ha, ha), Islamic banks and many western banks in the fake ‘Islamic banking’ dreamed up in 1920 by the Muslim Brotherhood to wage ‘financial Jihad’ against the west (see following article and www. Terrorfinance.org). Nab offers $25,000 a year scholarships for those studying sharia compliant finance ....and no I don’t mean an analysis of its validity, it use in terrorism or destruction of the west, or its privileging of Muslims, but rather as training to apply it in Australia. They say "A special feature of the Scholarship will be to encourage the development of Shariah compliant financial products and services". The scholarship is named after the mufti, Sheik Fehmi. The NAB says "Membership of the NAB Sheikh Fehmi El-Imam Scholarship Board is comprised of senior NAB executives and respected members of the Islamic community." News item November 2007 NAB claims their services are to ‘strengthen links between NAB and the Muslim community.’ Presumably we will soon also see special financial products and services designed for the specific use of Buddhists, then another set for Jews , another for Hindus...etc! NO? Didn’t think so!! From:

islammonitor.org/index.php?option=com_frontpa...

Related:

Islamic Banking in Australia: Challenges and Opportunities

ABDUL MALIK MIRZA

Queesland University of Technology

and

ABDEL-KARIM HALABI

Monash University

Journal of Muslim Minority Affairs, Vol. 23, No. 2, (October 2003), pp. 347-359.

Introduction

Muslims are one of the many minorities in Australia. In this paper we report on Muslim

community's reasons for discomfort with the use of the Western financial system and

describe the alternative to it that has come to be known as "Islamic banking". One of the

major differences between the Western and the Islamic financial systems is the use of interest (riba) which is the very foundation of the Western financial system but prohibited under the Islamic rulings governing permissible financial transactions. In this paper we will describe the activities and operations of the Islamic financial institutions and discuss why riba-free banking is likely to flourish in Australia in the future.

Read the Rest Here:

http://eprints.qut.edu.au/archive/00005055/01/5055.pdf

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Jed Babbin: Islam vs. Free Speech.

Dr. Ehrenfeld is a scholar and author of the book, “Funding Evil: How Terrorism is Financed, and How to Stop It.” In that book, Khalid Salim bin Mahfouz — a Saudi who is former head of the Saudi National Commercial Bank — and some of his family are described as having funded terrorism directly and indirectly.

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ABC Radio National

Background Briefing

8 October 2006

Islamic Banking

Pure Islam teaches it's wrong to charge interest, known as usury. That's now being reinterpreted as Islamic financiers see a growth market. And, in Melbourne, one very strange bank apparently held $8 billion of someone's money.

Reporter: Peter Martin.
This transcript was typed from a recording of the program. The ABC cannot guarantee its complete accuracy because of the possibility of mishearing and occasional difficulty in identifying speakers.
THEME
Peter Martin: Hello, I'm Peter Martin, and welcome to Background Briefing on ABC Radio National.
DOOR OPENS/GREETINGS: Peter Martin and Ganesh Sahathevan
Peter Martin: I've come to meet the student who brought down the bank. Along the way he's shed light into some particularly murky corners of the Australian financial system and also Australia's new booming, so-called Islamic home finance industry.
Before Ganesh Sahathevan moved to Australia and began study five years ago, he was a financial journalist in Malaysia. He speaks Malay and he's worked as an accountant. That's why when he read on-line in the Malaysian press in 2003 that an Australian bank he had never heard of had been granted permission to set up a full-service bank branch in Malaysia, he became suspicious.
Ganesh Sahathevan: I read about them in a Malaysian business publication, The Edge.
Peter Martin: What is The Edge?
Ganesh Sahathevan: It's got a fairly wide reading, particularly among the professional class in Malaysia.
Ganesh Sahathevan: What did you read?
Ganesh Sahathevan: I read, much to my surprise, that a Melbourne company with assets of $US8-billion or thereabouts -
Peter Martin: $US8-billion? Bigger than the Macquarie Bank in terms of shareholders' funds?
Ganesh Sahathevan: Yes. Oh, definitely. A bank in Melbourne that I had never heard of, and I had worked in Melbourne as a tax consultant, a bank in Melbourne with assets of $US8-billion had just obtained a licence to operate a bank in the Malaysian tax haven of Labuan.
Peter Martin: Labuan is an island off the coast of Borneo.
Ganesh Sahathevan: And it's part of Malaysia.
Peter Martin: What struck you as odd?
Ganesh Sahathevan: The licence that they had obtained was to run a full deposit-taking bank, that means a full-blown banking operation. Obtaining one of those is extremely difficult for an unknown Commercial IBT, which appeared to be perhaps a business advisory company in Melbourne, to obtain a banking licence of that sort, is unheard of.
Peter Martin: Under Malaysian law, as under Australian law, you can only obtain a licence to operate as a full service foreign bank if you actually are a bank in another country. And becoming a bank is very difficult. Commercial IBT claimed to be regulated by the Reserve Bank of Australia, which it wasn't. And by the Australian Prudential Regulation Authority, which it wasn't either, although it was registered with APRA as a financial corporation for the purpose of collecting statistics.
The corporate head office for the pseudo-bank that apparently held $8-billion was a telephone answering service in Collins Street, Melbourne.
This struck Ganesh as more than merely odd.
Ganesh Sahathevan: Odd, suspicious; not merely odd.
Peter Martin: And did the amount of money seem strange?
Ganesh Sahathevan: Oh definitely. It goes without saying. The first inquiries I made were with the BRW Rich List, to see if there were any new entrants, because clearly whoever owned this bank, or this entity, must be among the new rich of Australia.
Peter Martin: One of the very richest I think, probably equal to the Packers?
Ganesh Sahathevan: Well richer. James now doesn't have $US8-billion in cash, which is what this entity claimed to have.
Peter Martin: Ganesh and I made a television program for the SBS about our attempts to find out who or what was behind Commercial IBT.
DATELINE THEME
Mark Davis: Hello, I'm Mark Davis, welcome to Dateline. A mystery billionaire with a multi-billion dollar company opening a bank branch in Malaysia for a non-existent Australian bank; and with a series of fake addresses to boot. It's the sort of scenario that should have Australia's corporate watchdogs swinging into action, but as Dateline found while trying to track him down, our regulators don't seem too interested.

Read the Rest Here:
You're listening to ABC Radio National.
http://www.abc.net.au/rn/backgroundbriefing/stories/2006/1754286.htm

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Monash University

Islamic banking on the agenda

Islamic banking is gaining popularity around the world, but ignorance and misunderstanding of some of its practices remain. ROBYN ANNS reports on an international conference organised by Monash University that has helped dispel some of the myths and stimulate informed debate.

In Australia, people paying off a mortgage accept that they will repay the loan, plus thousands of dollars more in interest. Credit card users know they are expected to pay off their debt, plus more in interest if they do not pay off their card balance promptly.

In credit-loving, debt-driven countries, the notion of lending money without charging interest is bizarre, unworkable, unimaginable - and even confronting.

Under the rules of Islamic banking, however, charging interest on loans is prohibited. Yet the industry has estimated global assets of $500 billion and is rapidly spreading. How does it prosper without charging interest, a practice regarded as one of the foundations of banking in other cultures?

This and other key questions were addressed at a Monash conference, titled 'From money lenders to bankers: evolution of Islamic banking in relation to Judeo-Christian and Oriental banking traditions'.
The conference, held at the Monash Centre in Prato, Italy, in September, also looked at the similarities in banking traditions among people from various faiths.

The chair of accounting and finance at Monash University Malaysia, Professor Bala Shanmugam, helped organise the conference, which attracted more than 200 researchers, academics and industry leaders from around the world. He said Europe was chosen as the venue because of the interest shown by the Western community in Islamic banking.

"The conference was timely because it helped generate awareness and enlighten people about Islamic banking and its underlying principles," he says.

Delegates were told that contemporary Islamic banking had experienced rapid growth, with 27 Islamic banks having been established in the Arabian Gulf, India and Europe since the early 1970s.

Monash University is also looking into specific aspects of Islamic banking, including Islamic financial derivatives, Islamic accounting, disclosure and corporate governance in the Islamic financial setting, and a study on what determines profitability within Islamic financial institutions.
http://www.monash.edu.au/pubs/monmag/issue12-2003/news/banking.html

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Lateline Business

Broadcast: 06/12/2007

Islamic banking sector sees rapid growth

Reporter: Sue Lannin

Rising oil wealth is making Islamic banking one of the fastest growing sectors in finance, with compliant institutions holding nearly $600 billion in assets across the globe.

Transcript

ALI MOORE: Rising oil wealth is making Islamic banking one of the fastest growing sectors in finance, with compliant institutions holding nearly $600 billion in assets across the globe.

There are stark differences between Islamic and regular banking, with Sharia law forbidding the payment of interest, while investment practices have much in common with ethical funds.

Malaysia is currently the hub for the Asia Pacific but Australia is being touted as a potential rival in the future battle for the halal dollar. Sue Lannin reports.

SUE LANNIN: Australian karate champion Bilal El-Hayek says Islamic banking has helped him achieve the great Australian dream.

Link: http://www.abc.net.au/lateline/business/items/200712/s2112124.htm

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BrookesNews.Com
Monday 15 October 2007

Brookes: For some inexplicable reason the Melbourne-based Institute of Public Affairs (IPA) produced an article that not only supported the notion of Islamic economics it also made the ludicrous suggestion that ‘Islamic economic thinking’ inspired Adam Smith’s Wealth of Nations! When I phoned Chris Berg, editor of the IPA Review and co-author of the article along with Andrew Kemp, he refused to give a guarantee that he would publish a refutation. So much for the IPA’s commitment to open debate. The following is a refutation of their article that I gave in an interview: Why did The IPA Review mislead readers about ‘Islamic economics’?.

http://www.brookesnews.com/071510islamiceconomics.html

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Institute of Public Affairs
March 2007
Islam’s free market heritage
Chris Berg & Andrew Kemp
American strategy in the Islamic world has been aimed at the establishment of political democracy —a worthy goal, but a worryingly incomplete one. Social and political freedom cannot be fully established unless they are united with the other pillar of liberalism, economic freedom.
One of the late Milton Friedman’s great insights was the inherently peaceful nature of an open economy: the free market, he wrote ‘does not care what [the participants’] religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another’.

Link:

Chris Berg is the Editor of the IPA Review. Andrew Kemp is a regular contributor to the IPA Review.
The authors would like to thank Mustafa Akyol, opinion editor for the Turkish Daily News in Ankara, and other reviewers for their valuable comments on drafts of this article.
http://ipa.org.au/files/59-1_Islam+FreeMarket.pdf


sorry for the messy post with the text; due to software or hacker troubles -10men




H/T: J Tex