Performing Hajj with a debt

Question:

Is your Hajj valid if you have an interest-free loan that you are paying in installments or a house for that matter? Also can you borrow money to make Hajj?

Answer:

Wa Alaykum Assalam wa Rahmatullah wa Barakatuhu,
From a previous question answered by Mufti Muhammad ibn Adam al-Kawthari :
If you really want to go for Hajj at present, then you may take a loan from someone, perform Hajj with that money and then pay off the loan with Halal and lawful money.
As far as the second aspect is concerned, which is going for Hajj despite on debt, if it is an interest-based loan, then it would be wise to pay off the loan first and then go for Hajj. However, this will not have an effect on your Hajj as long as the money used for performing Hajj is Halal.
If the loan is not interest-based, then if you fulfil your monthly commitments and your creditors do not have any arrears claim against you, it is perfectly permissible to perform Hajj. However, if the creditors have arrears claims against you, then you will be infringing on their rights by performing Hajj. Hence, you should not perform Hajj without the consent of the creditors claiming arrears from you.
It should be also remembered that, if a person is heavily indebted and his liabilities exceed his assets, Hajj is not obligatory (fard) upon him/her. (See: Radd al-Muhtar)
Wassalam,

Source

Unpaid Zakat, Mortgage, and Debt: What Do I Do?

Question:

I have not paid zakat for a number of years. Added on to this, I have a mortgage on a house as well as being in debt to two credit card companies. On top of all this, I was divorced recently and my wife is demanding her share of the money. What do I do?

Answer:

Publish Post

Assalamu alaykum
In the name of Allah the Inspirer of truth
First I would like to congratulate you for your good intentions. May Allah grant you the ability to overcome your problems and keep you steadfastness on your faith.
Your questions can be answered as follows:
1. Your Wife's Zakat
You are not responsible for your ex-wife's assets or her zakat payments thereof. This is her responsibility, more so now that she no longer remains your wife.
2. Unlawful Investments
You have to try to extract yourself from each one of your unlawful investments and insurance plans as soon as possible. (Please see fatwa on 401k plans to better understand the nature of various investment options.) When you cancel these plans the amount which was invested by you (payments or installments) is for you to take back and keep but any amount received beyond that (interest and payoffs) are to be disposed off to the poor without the intention of gaining reward.
Muslims, as much as others, are encouraged to plan for their future and security. It is permitted for one to pursue all permissible means in this regard. This includes matters related to this world but more importantly matters related to the next. However, adopting unlawful means (however lucrative they may seem) is tantamount to destroying the security and salvation of the hereafter for the supposed security of this world. Allah has promised security for those who fear him and follow His commands. He says in Surat al-Talaq, "Whoever fears Allah He will suffice him," and "Whoever fears Allah, He will make an opening for him, and will provide for him from where he did not imagine."
3. Wife's Share in Investments
It is up to you settle with her (as you have nearly done) to the percentage of ownership in the investments you have. Since you are going back a few years in terms of zakat payments, you may consider the entire amount yours, and for which you will pay zakat, until you settle with her as to how much is to be allotted to her.
4. Calculating Your Zakat
For calculating your zakat you must first determine the amount of your total assets and debt in the first year of not paying zakat. All cash you possessed, properties, amounts invested in various schemes, etc will be considered assets. As for your debt, it will be divided into two categories. One, the amount borrowed excluding any interest to be paid. Two, the interest amount you have paid or have to pay on the capital borrowed. The capital amount that was borrowed will be deductible in zakat but not the interest.
You will first calculate how many payments you had made into your mortgage until the first year of not paying zakat. The total amount repaid will be considered a repayment of the actual capital (Islamically), even though the mortgage company may consider it all interest or part interest and part repayment of loan. The amount that now remains of your borrowed amount will be considered part of your debt and thus deductible from your assets. For instance, if your property had cost 260 000 Rands for which you took out a loan and you paid the mortgage company 50 000 Rands till that year, your zakat deductible debt will be 210 000 Rands even though the mortgage company may see it otherwise.
When you have subtracted your total deductible debt from your total assets any remaining amount will be zakat-able at 2.5% for that first year. For each subsequent year, you will similarly calculate your assets and debts and then remove 2.5% of it as zakat. However, when calculating the zakat in your case for each subsequent year, the amount to be paid as zakat for the previous year (2.5%) will also be deductible from the total assets of the next year since it is also considered a debt. To provide a simple example, if your zakat-able assets come to $1000 for the first year of not paying zakat, your zakat would be $25.00 for that year. In the next year (if your assets remained the same) your zakat will be 2.5% of $975.00 now, since $25.00 is the zakat amount payable from the previous year. Hence your zakat for the second year will be $24.37. Likewise, you will calculate the zakat for each year until the present year.

And Allah knows best.

Source

Injury Compensation Claims

Question:

There are many people who seek compensation for injuries such as Car accidents, falls etc. I have seen many people make compensation claims following car accidents, these are not for any major injuries but minor aches & pains. It has become a big business. A proportion do not have any significant symptoms ie. they are not prevented from going to work or carrying out usual duties, the intention is obtaining significant money. My question is to what extent can a car accident victim (or any other accident) claim compensation from the other party even if the other pary admits fault ? Can one claim for the stress they suffered or temporary non-specific aches & pains ? There are some who argue that they are entitled to make a claim so they should claim something or that other people would do the same to them or that the do not get enough money from Insurance compared to what they have been paying. 

Answer:

In the name of Allah Most Compassionate Merciful
I hope you are fine and in the best of health and iman.
If one is genuinely injured due to an accident and the insurance company itself pays out an amount, then it would be permissible to take the offer. If one specifically claims injury compensation, then one is only allowed the annual insurance premium one has given for that year, say 250.00 for 2007, or if one has been insured with the same company for many years, say 5 years and one gave 250.00 each year for insurance, then one can claim 1,250, if one has a genuine injury.
And Allah alone knows best

Source

Mubarak Knockout

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Earl Lectures 2011 - Keynote Lecture - Shaykh Hamza Yusuf

Earl Lectures 2011 - Keynote Lecture - Shaykh Hamza Yusuf

January 26, 2011

Shaykh Hamza Yusuf delivers his keynote lecture: "Lenders, Leopards, and Lions: The Violence of Avarice - Muslim Musings from Dante’s Six, Seventh, and Eighth Circles of Hell"
Shaykh Hamza Yusuf is "the most influential Islamic scholar in the West" and the 38th most influential Muslim scholar worldwide, according to Georgetown University's study The 500 Most Influential Muslims (2009). Hamza Yusuf is a cofounder of Zaytuna College, located in Berkeley, California. He is an advisor to Stanford University's Program in Islamic Studies and the Center for Islamic Studies at Berkeley's Graduate Theological Union.

CLICK for Audio

Explaining the Egyptian Revolution to Americans

Explaining the Egyptian Revolution to Americans

Also while we are on the topic of Egypt, here is an excellent rebuttal from Alex Pareene on the thoroughly repugnant Richard Cohen who thinks Egyptians can’t handle Democracy:
Richard Cohen: Egyptian democracy will be “a nightmare”

(Salon.com)

Nothing saddens Richard Cohen more than the sight of hundreds of thousands of Egyptians peacefully protesting. The longtime Washington Post columnist is sad because those childish Arab Muslims might end up with a democracy, but they don’t know how democracy works. Here is how democracy works: We like it unless “the people” want something that complicates our current foreign policy objectives.

Cohen is just broken up about this. “Egypt, once stable if tenuously so, has been pitched into chaos.” “The dream of a democratic Egypt,” he says, “is sure to produce a nightmare.” It is sure to. Such a nightmare it will be. Just not anywhere near as pleasant as these last 30 years of “stability” have been, for everyone.

Cohen is totally an expert on Egypt and Muslims, because he is a longtime opinion columnist for the Washington Post, and not at all a blinkered idiot. Egypt “lacks the civic and political institutions that are necessary for democracy,” he tells us. And you can’t argue with that. I mean, do Egyptian newspapers even run syndicated Richard Cohen opinion columns? Do they have “Dancing With the Stars,” to teach them how voting works?

My take on all this is relentlessly gloomy. I care about Israel. I care about Egypt, too, but its survival is hardly at stake. I care about democratic values, but they are worse than useless in societies that have no tradition of tolerance or respect for minority rights. What we want for Egypt is what we have ourselves. This, though, is an identity crisis. We are not them.

No. We are not them, at all. Because they are Muslims. We all know Americans could handle democracy because we were super good at respecting the rights of minority groups. But the Egyptians are sometimes resentful of or even violent against minority groups, so no democracy allowed for them. (While some Coptic Christians worry that a more Islamic Egyptian government would be less friendly to Copts, demonstrators are stressing an inclusive, nationalist message, and there’s evidence that Christians are themselves involved in the protests. The right-wing CBN has even filed a report on the growing “bond” between Christians and “their Muslim neighbors” in Egypt.)

Cohen is concerned that the Muslim Brotherhood — which “runs the Gaza Strip” under the name “Hamas,” he tells us — will take control of Egypt and attack Israel, at which point “the mob currently in the streets will roar its approval.” That “mob” certainly does seem pretty bloodthirsty. They clearly want all-out war with the region’s sole nuclear power. Pretty sure that’s what these demonstrations are about. “I’m actually pretty cool with Mubarak but I really wish we were waging war against Israel right now” — An Egyptian protester.

Cohen seems to understand that the Brotherhood, while involved in the demonstrations, did not organize them, and he has been told that the majority of the demonstrators have no ties to the group, but he thinks that might just be because they are sneaky. “It has been underground for generations — jailed, tortured, infiltrated, but still, somehow, flourishing. Its moment may be approaching.” Scary!

And why should we all be super-scared of them? “The Islamists of the Brotherhood do not despise America for what it does but for what it is.” Thanks, Richard Cohen, for explaining who these Islamists are, and what they despise about us. It’s not our lengthy history of propping up the dictator who brutally repressed them — they hate us for our freedom. (You may compare Richard Cohen’s history of the Muslim Brotherhood to that an an actual expert on the subject, if you wish.)

This column is so full of winning lines, I have to stop myself from quoting the entire thing. There is literally an “I like democracy, but” part: “Majority rule is a worthwhile idea. But so, too, are respect for minorities, freedom of religion, the equality of women and adherence to treaties, such as the one with Israel, the only democracy in the region.”

I’m sorry, I can edit that one to more clearly express Cohen’s actual point: “Majority rule is a worthwhile idea. But so, too … [is] respect for… Israel….”

These are the last lines:

America needs to be on the right side of human rights. But it also needs to be on the right side of history. This time, the two may not be the same.

The “right side of history” might not be the “right side of human rights.” Got it? Sometimes you have to be on the “wrong side” of “human rights,” and history will totally understand.

Poor Egypt. Maybe you will be grown-up enough in the eyes of Richard Cohen to handle a democracy someday, but right now, it’s just not in the cards.

Source

Zakah with Debt and Extra earned money

In The Name of Allah, Most Merciful and Compassionate

You must pay zakat on the money you borrowed, if all the conditions of zakat on money exist, because debt does not prevent the obligation of zakat.

Shaykh Ibn Hajar al-Haytami, Allah have mercy on him, said in Tuhfah: "Debt owed by someone in whose hand is a zakat-payable amount (nisab) or more does not prevent it [zakat] from being obligatory for them according to the strongest of positions, whether the debt is due or deferred, whether it is owed to Allah or a human being. This is due to the general nature of the primary texts which obligate it [zakat] and because the person owns a zakat-payable amount and is able to execute transactions with it."[1]

The conditions which make zakat on money obligatory are two: (1) that you had a zakat-payable amount (the dollar equivalent of 592.9 grams of silver at that time) or more, (2) that at least this amount remained in your ownership for an entire lunar year.

So if you spent so much of the money that less than this amount remained any time during that year, you do not owe zakat on this money. However, if you invested this money, on merchandise for example, you might owe zakat on that merchandise and this zakat has its own conditions.

Then if the aforementioned two conditions are fulfilled, the zakat-year (hawl) for this money begun when you received it and ended one lunar year later. You must only pay zakat for the amount that remained with you during that entire lunar year. So if you received $5000 on Maharram 1, 1424 AH, for example, and on Maharram 1, 1425 AH you had $1000 left from the original sum, then you owe $25 zakat. And Allah knows best and He alone gives success (tawfiq).

[1] Ibn Hajar al-Haytami, Hawashi al-Sharwani Wa Ibn Qasim al-Abbadi 'Ala Tuhfah al-Muhtaj Bisharh al-Minhaj (Beruit, Dar Ihya' al-Turath al-'Arabi), 3:337.

Sunnipath.com - Shaykh Abdul-Karim Yahya, SunniPath Academy Teacher

Israel prefers Egypt’s Suleiman to succeed Mubarak: WikiLeaks

Secret US diplomatic cables have revealed that Egypt’s Vice President Omar Suleiman was long seen by Israel as the preferred candidate to succeed President Hosni Mubarak.

 President Shimon Peres shaking hands with Egyptian intelligence chief Omar Suleiman during their meeting in Tel Aviv on November 4, 2010.


According to an August 2008 cable released by WikiLeaks and published by the Daily Telegraph newspaper on its website, a senior adviser from the Israeli Ministry of Defense told US diplomats in Tel Aviv that the Israelis believe Suleiman would likely serve as “at least an interim president if Mubarak dies or is incapacitated.” A US diplomat who classified the cable, Luis Moreno, wrote that although he deferred to the Embassy in Cairo for Egyptian succession scenario analysis, “there is no question that Israel is most comfortable with the prospect of” Suleiman. The cable quoted the adviser to Israel’s defense ministry, David Hacham, as saying an Israeli delegation led by Defense Minister Ehud Barak was “shocked by Mubarak’s aged appearance and slurred speech,” when it met him in Egypt. “Hacham was full of praise for Soliman, however,” it said.

Source

From the bbc website:

The number of those on Tahrir Square has been swelling each day and dropping back overnight. Meanwhile, leaked US diplomatic cables carried on the Wikileaks website have revealed that Mr Suleiman was named as Israel's preferred candidate for the job after discussions with American officials in 2008.
As Egypt's intelligence chief, he is said to have spoken daily to the Israeli government on issues surrounding the Hamas-run Gaza Strip via a secret "hotline". 

Complete article

Egypt's Vice President Omar Suleiman was long seen by Israel as the preferred candidate to succeed President Hosni Mubarak, secret U.S. diplomatic cables published Monday suggested.

According to an August 2008 cable released by WikiLeaks and published by the Daily Telegraph newspaper on its website, a senior adviser from the Israeli Ministry of Defense told U.S. diplomats in Tel Aviv that the Israelis believe Suleiman would likely serve as "at least an interim president if Mubarak dies or is incapacitated."

A U.S. diplomat who classified the cable, Luis Moreno, wrote that although he deferred to the Embassy in Cairo for Egyptian succession scenario analysis, "there is no question that Israel is most comfortable with the prospect of" Suleiman.
The cable quoted the adviser to Israel's defense ministry, David Hacham, as saying an Israeli delegation led by Defense Minister Ehud Barak was "shocked by Mubarak's aged appearance and slurred speech," when it met him in Egypt. "Hacham was full of praise for Soliman, however," it said. Suleiman was spelled Soliman in some of the leaked cables.

Hacham added that he sometimes spoke to Suleiman's deputy several times a day via a "hotline," according to the cable.
On Sunday, Suleiman met several major opposition groups, including the outlawed Muslim Brotherhood, for the first time and offered new concessions including freedom of the press and the release of those detained during the country's recent violent protests.

Source

When the Social Contract is Breached on One Side, It's Breached on Both Sides - Sh Hamza Yusuf

When the Social Contract is Breached on One Side, It's Breached on Both Sides

Hamza Yusuf

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness, That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

– The Declaration of Independence

July 4, 1776

America, where are you? The people of Egypt are clamoring for the very right of dissolving the social contract with their current government due to its long string of abuses, a right enshrined in our nation's foundational document. It behooves America to lend a helping hand to Egypt's people at this crucial moment.

This is clearly a historic turn in the largest Arab nation, a widespread non-ideological movement, fueled by the long-repressed aspirations of the majority of Egyptians. Meanwhile, the ruthlessness of the powers that be in Egypt has been fully exposed in the sinister Machiavellian antics on display, being recorded this past week by the international media and by such American media celebrities as Anderson Cooper and Nicholas Kristof, who are sounding more revolutionary in their comments than some of the people they're interviewing. These courageous journalists have recognized the significance of the story and placed themselves on the front lines. While Hosni Mubarak is unleashing his thugs on innocent protesters and journalists, President Obama and Secretary of State Clinton, are apparently missing in action.

Something has irreversibly changed in the land of the Pharaohs. It has to do with the basic social contract, the relationship of a people to their leaders—a concept not alien to the Islamic tradition.

The oppression that the Egyptian youth have experienced for as long as they have been alive has stripped them of their basic human dignity. In many parts of the Arab world, including Egypt, it is not uncommon to see a grown man slapped and abused publicly by a police officer and have no recourse to justice. I have witnessed this several times during my time in the Arab world. Arab citizens are too often treated paternalistically at best and sadistically at worst. Not much has changed since the days of the preferred pre-modern method of public torture: the bastinado, which Florence Nightingale witnessed and recorded in her travelogue highlighting her stay in Egypt in the 1840s.

But for the youth of Egypt, enough is enough. They've come of age in a wired world that highlights the rebellious youth culture of the West. Many of them are more inspired by Bob Marley than by their local imam quoting Sahih al-Bukhari. "Them belly full but we hungry; a hungry mob is an angry mob."

The Egyptian people, many for the first time in their lives tasting the inebriating wine of political freedom, are challenging their government, courageously defying the fear factor so ruthlessly cultivated in the belly of the bestial state security apparatus. This mirrors what happened in the 1960s when African Americans lost their fear of a brutal system that had kept them in check for centuries and after much rebellion and rioting resulted in a freer and more enfranchised society.

America's Founding Fathers understood well that in order for a government to govern effectively and for its laws to be obeyed, the individual must have a respectful fear of the coercive power that government yields, but that, conversely, in order for a government not to abuse its laws and exploit its coercive power to further the selfish ends of its administrators or those who gain control over them, it must fear the aggregate of people for which it was established to serve. When a people, as in Egypt's case, collectively fear their government and are forced to bear its abuses, that government is a tyranny and not a servant of its people, despite the so-called elections in which Mubarak supposedly won about 90 percent of the people's votes.

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It is important to note that this is not an ideological movement. This is not about Right or Left, Communist or Capitalist, Liberal or Conservative, Islamist or secularist—even if all of these elements are invariably reflected in the various motivations of the diverse peoples populating Independence Square and other sites of protest. This is far more basic: it's about jobs, food prices, fair elections, reducing poverty, social justice, and above all, not living in fear of a government that should be serving the needs of its people instead of making them the servants of its wants.

The lack of an ideology, for me, is the most refreshing aspect of this uprising. The stale rhetoric of "Islam is the solution" that has marked countless demonstrations for decades is absent. The pathetic socialist slogans of the Libyan revolution as well as the Syrian and Iraqi Arab nationalist slogans are all conspicuously absent. Islam is not a political ideology and hence does not offer a political solution per se; basic morality in politics is the solution. Most Muslims would be content living under Finnish or Swedish forms of governance, with a few adjustments to the sexual liberties in those countries, and feel as if it were the time of Saladin, given that they are committed to eradicating poverty and hunger, serving the aged, and even ensuring rights for dogs and cats. If you torture a dog in Stockholm, you go to jail. In the jails of Egypt, people can be tortured with impunity by dogs of the state.

Ayman al-Zawahiri, the number two man of al-Qaeda, was a pediatrician from one of the most respected families in Cairo. His maternal great-grandfather was a distinguished Egyptian lawyer, and his paternal great-grandfather was Shaykh al-Azhar, Muhammad al-Zawahiri. After Sadat’s assassination, under Mubarak’s orders, Ayman was arrested with a slew of other suspected "Islamists," beaten mercilessly, and burnt severely and repeatedly with cigarette butts by Egyptian torturers. According to a well-known American journalist who lives in Cairo and knew Ayman personally, he came out a very different man than he went in. We are all paying the price of this failed system that can drive normally decent people into the abnormal heinousness of nihilistic violence.

Islam is not an ideology, political or otherwise. It is a revelation from God that explains and reminds people of their duties toward their Creator in honoring and worshipping God with gratitude for the gift of life and all the concomitants of that gift, and of their duties toward their fellow creatures as unique and protected creations of God. Those duties are well described in all the Books sent by God and enshrined most succinctly in the Ten Commandments. Politics involves making sure the mail gets out, allotting appropriate monies for public works, and ensuring the security of a people from internal or external threats; all of these can be done without recourse to any specific religious tradition.

The Prophet, peace and blessings be upon him, left no specific system of government; rather, he taught "constitutional" principles upon which governance should be based. Many of those principles, quite revolutionary at his time, have become common coin for most people today: the idea of equality among races and gender, the concept of economic justice, and the right of an individual to be protected in his person and property from unjust search or seizure. These are constitutional principles accepted by most governments today; whether they are practiced or not is another matter. There are, however, two clearly articulated aspects of governance that do have relevance in any state run by Muslims. The penal code of Islam was developed specifically for an Islamic polity, but only a few actual punishments are agreed upon, and the circumstances of its various applications are highly nuanced in Islamic legal texts, with an aim to avoid their implementation whenever possible. The gross and often perverse so-called "Islamic punishments" meted out today—invariably on the poorest and most helpless in societies—have nothing to do with the Prophet’s teaching, peace and blessings be upon him. Commercial law is, undeniably, another developed area in Islamic law that has implications in the running of a state.

           

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The Prophet, peace and blessings be upon him, warned that "Governance is great remorse on the Day of Judgment. Power is a luxurious wet-nurse and a terrifying weaner." Scholars interpreted this saying to mean that once a man tastes the perks of power, he finds it difficult to give up, but death comes to us all, and at that point, the crisis of having failed in one's duties to the people will turn into great remorse.

Since the American and French Revolutions, it is increasingly accepted that leaders must only lead when they have the support and the confidence of their people. If leaders breach the social contract of popular consent of the governed through abuses, they not only lose legitimacy but they must relinquish their mandate to govern. There can be no doubt—if there ever was—that Hosni Mubarak has lost his legitimacy with his people despite the apparent legality of his rule, whether it be cloaked in constitutional or Islamic principles.

These are indeed times that try men's souls, and the scholars of Egypt need to offer good counsel to their people. If the scholars are to have any relevance when the dust settles, they must take firm positions now. If they merely wait to see what happens, they lose the very thing that empowers them: the people's trust. Amr Khaled has courageously marched with the protesters in solidarity, despite his usual avoidance of politics, but in this situation, the cause is just and the stakes are high, and so he has taken a stand, and people will long remember that. Scholars need to guide and not be dictated to by the puppet masters of power who cut their strings as soon as their usefulness is over, leaving them in the paralysis of paltriness.

The need for resolute positions of solidarity with the Egyptian people in their pleas for political change is undeniable. I personally feel that the scholars, inside and outside of Egypt, have a responsibility to stand with the Egyptian people in their pleas for reform in Egypt. While scholars have a right to their own opinions on this and other matters, my personal opinion is that in order to stop further conflict and prevent more blood from being spilt, the scholars of Egypt should call for an immediate change in the government of Hosni Mubarak.

Having said that, I believe we should maintain a good opinion of the scholars who either take a position or choose to remain silent—a valid option during fitnah. We must recognize that personal ijtihad in difficult times is to be respected. The Mufti of Egypt is an honorable and pious man; he understands the complexity of the situation, the dangers of instability, and the tragedies that can quickly arise when conflagrations take a life of their own. Moreover, his position is certainly consonant with a traditional approach that was taken by many of the great scholars of the past. While some may not agree with his opinion, Muslims should respect religious authority, acknowledge a scholar's right to it, and not assume we know anyone's intentions. God alone is the Judge of men's hearts.

           

A few caveats are necessary in this current crisis. The idea that Mubarak is the sole problem is in itself a problem. Mubarak represents a certain ruling elite in Egypt that controls immense wealth and holds the country in its vice-grip of graft and corruption. If he goes today, it is likely that the ruling elite will make some cosmetic reforms, such as reduce the price of food, and promise free and fair elections, but when the foreign media leaves, it'll be business as usual. Moreover, the United States has its largest embassy in Egypt, and with tens of billions of dollars in investments over the years, mostly in military aid, Washington will invariably not want such a strategically significant place as Egypt to fall into the hands of a real reformer, despite the administration's rhetoric of "spreading democracy."

It's also worth noting that Egypt suffers from major systemic problems that make any immediate transition to a Western style democracy not only improbable but more likely a destabilizing factor that results in life becoming even more unbearable than it is now. America's experiment in Iraqi democracy is worth reflecting upon. 

The real problem in Egypt is not the lack of freedom of expression; the Egyptians are some of the most outspoken people in the world. In fact, the world's problems are solved daily in the cafes of Cairo with creative solutions coming from the waiters as well as the waited upon. What is lacking in Egypt is a reasonable living standard that enables average wage earners not to succumb to the necessity of graft, a government that serves the people, a sound judicial system relatively free from corruption, and, most importantly, basic human dignity—the right to be respected in your own land.

Other Arab countries exist with far less freedom of expression than Egypt—which happens to have the freest press in the Muslim world—but nonetheless have stable societies because the per capita income is high and people live reasonably well. American voter apathy—between 40-50 percent of eligible voters don't vote—proves that democracy is not a priority when all is going well, but when all is not well, tea parties arise, or perhaps in Egypt's case, qahwa parties, meant to awaken the failing government.

Fitnah is worse than killing, according to the Qur'an, and in this case, the fitnah is persecution. The Egyptians have been persecuted for too long, and while traditional scholars since the days of the early fitnahs have sided with stability in order to prevent bloodshed that often resulted in worse situations than the ones being opposed, in an age where peaceful protest is the only rational means of a people to redress the wrongs of their government, the scholars should not only support but acknowledge this change in the world. The situation in the Middle East is intolerable, and as John F. Kennedy rightly remarked, "If we make peaceful revolution impossible, we make violent revolution inevitable."

Enjoining Good, Forbidding Wrong

In the past days and weeks people all over the world have been following the events in Tunisia, Egypt and elsewhere. The people's struggle for freedom inspires hope, but the dangers they face provoke fear and anxiety. Many question the role of religion in such difficult circumstances. Some fear mixing politics and religion. Others criticise the absence of leadership from religious figures, and say the ulema are out-dated and irrelevant. In this sermon, Sheikh Abdal Hakim provides a timely reminder of the fundamental importance for our leaders of 'enjoining the good and forbidding the bad' (amr bi-l-ma'ruf wa-nahy 'an al-muhkar) - so important that Imam al-Ghazali called it 'the greatest pillar' (al-rukn al-'azim) of the religion.

Among the many great scholars and saints who have discharged this weighty responsibility, despite the grave threat to their livelihoods and even their lives, Sheikh Abdal Hakim mentions Hasan Kaimi Baba of Bosnia, Sheikh al-Hasan al-Yusi of Morocco and Sheikh Amadou Bamba of Senegal. They were true followers of the Prophetic example, because they resisted injustice and oppression. May Allah grant our leaders, our scholars and us ourselves the determination to do the same, and may He in His All-Encompassing Mercy guide and protect the people of Tunisia, Egypt and all over the world wherever they face cruelty, corruption and repression.

Ya Qawiyyu ya Matin ikfi sharr al-zalimin, aslah Allah umur al-muslimin, sarraf Allah sharr al-mu'dhin.

Fur Coat

One day the Hodja was invited to a feast in an important and wealthy family's home. When he arrived, neither the hosts, nor the other guests paid any attention to him. They made him sit at one corner of the table, they didn't ask his opinion on any of the discussed matters, and worst of all, they forgot to pass him the food trays. Nasreddin Hodja felt left out. Nobody was showing any due respect or offering him food. The servants were passing him by and forgetting to fill his goblet.

A half hour later, the Hodja had enough of being ignored and he quietly slipped out of the house. He went back to his home and changed his clothes. He wore the best and the newest garments he owned. Then, he borrowed a very nice coat with real fur trims from one of his better-off neighbours. With this new attire, he headed back to the house where the banquet was being held.

This time around, everyone noticed the Hodja. The hosts and the servants welcomed him and the other guests treated him with respect. They gave him the best spot at the table and offered him food and drinks. Nasreddin Hodja was very pleased with this new reception. He started to eat with relish and participate in the conversation.

However, the guests and the hosts soon noticed that, every now and then, the Hodja was dipping the hem of his coat into his plate and muttering `eat my fur coat, do eat, you eat too.' Everyone was curious.

`Hodja Effendi,' the host finally inquired, `why are you dipping your coat into the food and what is it that you are murmuring?' Nasreddin Hodja was waiting for this opportunity.

`I am feeding my coat,' he was glad to explain, `I am telling it to enjoy the food. After all, it is thanks to its fur trims that I am being offered all these delicious treats.'

Investing in the stock market: Is passive income permissible?

In the name of Allah, Most Compassionate, Most Merciful,

As mentioned in an earlier post, investing in the stock market and buying shares of a particular company is permissible, according to the majority of contemporary scholars, provided four conditions are met:

1) The main business of the company is lawful,

2) The company must have some liquid assets in its possession,

3) One raises his objection to the company's interest-based transactions,

4) The proportion of the company's income gained through interest-based dealings is given in charity.

As far as all the partners having physical contact and knowing one another, that is not necessary. It is not necessary Islamically that all the partners of a business know one another, remain in contact or have direct influence in the running of the business.

When one purchases the shares of a company, one will be considered a partner and share-holder of the business, hence all the rules of partnership (shirka) will apply.

In partnership, if all the partners agree to work together, then each one will be treated as an agent of the other in all matters of the business, and any work done by one of them in the normal course of business shall be deemed to be authorized by all of them.


However, if they agree that some partners will manage the business whilst the others will be considered to be sleeping partners, then that is also permissible. (See for details: Islamic finance, P. 42-43)

As far as the moral aspect (towards which you have pointed out) is concerned, that is another matter altogether. This would depend on the company of which one is being a partner, and the whole idea of the evils connected to the stock market trading. Thus, if one was to avoid investing in the stock market due this, it would certainly be a commendable act.

And Allah knows best

Muhammad ibn Adam al-Kawthari

SOURCE

Foreign Exchange Trading

In the name of Allah, Most Compassionate, Most Merciful,

Dealing in the various aspects of futures transactions, hedging, options, etc as in vogue in the stock, commodities and options markets today are not permissible in Shariah, due to the fact that they violate more than one of the many well-established principles of Shariah.

Futures transactions and Hedging

The Encyclopaedia of Britannica defines “futures” in the following words:

“Commercial contracts calling for the purchase or sale of specified quantities of commodities at specified future dates.” (See: Britannica Micropaedia, 1988, 5/65).

Futures transactions involve the selling/purchasing of a specified commodity at a future date for a specified price. In other words, the sale is conducted, but the delivery of the commodity and paying its price is agreed at a future date.

Normally, in futures, the term “commodity” is used to define the underlying asset, even though the contract is frequently separated from the product. It therefore differs from a simple forward sale in the cash market which involves actual delivery of the commodity at the agreed time in the future.

Futures transactions normally take place in a special market known as the “commodity exchange market”. There is a special membership fee for dealing in this market. Non-members may transact through the medium of members.

The objective in such transactions is not to buy, sell and actually take delivery of the commodities, rather to settle the differences of prices only. At times, prior to the specified date of delivery approaching, the commodity is transacted and sold further to another party, and they also sell it further and so on, to approximately 100 transactions or more in some cases. And when the specified date of delivery appears, each party settles the difference between the buying and selling price. The idea is to gain profit without having to actually take the burden of delivering the commodity.

Hedging is also part of futures transactions and is a kind of insurance against any possible loss. It is a strategy designed to reduce investment risk using the futures contracts. It involves taking a position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change; a purchase or sale of futures as a temporary substitute for a cash transaction that will occur later. (See: Gerald, Modern Commodity Futures Trading)

The Shariah ruling with regards to futures transactions is quite clear, in that they are without doubt unlawful (haram) and impermissible, for they contravene more than one of the principles of a valid Islamic transaction.

Firstly, it is a well-established and recognized principle of Shariah that a sale must be instant and absolute. It can not be effected or attributed to a future date. Thus, if a transaction or sale is attributed to a future date, or if a sale is contingent on a future event, then the transaction will be void. Yes, one can promise to sell on a future date, but a new separate deal based on offer (ijab) and acceptance (qabul) will have to take place. All the jurists (fuqaha) are unanimous on this established principle.

An example of a sale attributed to a future date is when: A says to B on the first of January: “I sell my car to you on the first of February for £5000.” This sale will be void, for it is attributed to a future date.

An example for a sale contingent on a future event is when, A says to B: “If party X wins the elections, my car stands sold to you”. This sale will also be void, because it is contingent on a future event.

The great Hanafi jurist (faqih), Allama Ibn Abidin (Allah have mercy on him) states:

“Deferment (ta’jil) in the delivery of the commodity is not permissible and will make the sale void.” (Radd al-Muhtar ala al-Durr, 4/531).

Imam al-Mawsili (Allah have mercy on him) states:

“If one sold a commodity on the condition that its delivery will take place at the end of the month, then this sale will be void, because deferring commodities is invalid (batil).” (al-Ikhtiyar li ta’lil al-mukhtar, 1/276)

Thus, attributing the sale or conditioning the delivery of the commodity to a future date will make the sale and transaction invalid. The sale must be absolute and instant according to Shariah. Therefore, the futures transaction which took place between the first seller and the first buyer was invalid due to it being attributed to a future date, and as a result the following transactions will also all become void.

Another well-established principle of Shariah violated in the futures transactions is that the commodity is sold without the seller actually owning the commodity or (at the least) having possession over it, both of which (ownership & possession) are indispensable for a valid sale according to Shariah.

In order for a sale to be valid, the seller must own the commodity and must also have acquired its possession. This possession can be either physical or constructive. Constructive possession means a situation where one has not taken physical delivery of the commodity, but it has fully come into ones control and all the rights and liabilities are passed on to him.

Hakim ibn Hizam (Allah be pleased with him) reports that he said to the Messenger of Allah (Allah bless him & give him peace): “O Messenger of Allah! At times an individual comes to me to purchase a specific item that I do not possess. Can I sell him the item and then purchase it from the market? The Messenger of Allah (Allah bless him & give him peace) said: “Do not sell what you don’t own.” (Sunan Tirmidhi, no. 1232 & others)
Regarding the prohibition of selling a commodity before acquiring its possession, Sayyiduna Abd Allah ibn Umar (Allah be pleased with him) narrates that the Messenger of Allah (Allah bless him & give him peace) said: “Whosoever sells foodstuff, then he must not sell it before taking its possession.” (Sahih al-Bukhari, no. 2019 and Sahih Muslim, no. 1525)

Sayyiduna Abd Allah ibn Abbas (Allah be pleased with him) narrates that the Messenger of Allah (Allah bless him & give him peace) forbade the selling of foodstuff before acquiring its possession. Ibn Abbas states: “I consider this ruling to be in all transactions.” (Sahih al-Bukhari & Sahih Muslim)

The third reason for the impermissibility of such transactions is that it falls in the category of selling a debt against a debt which also is prohibited in Shariah. When an individual sells a commodity in the futures market, it is promised that the commodity will be delivered at a later date. Similarly, the price is also deferred making the transaction into the exchanging of debt against a debt. The commodity remains a debt which the seller owes to the purchaser whilst the price remains a debt upon the buyer.

Exchanging a debt against a debt is not permissible in Shariah. Sayyiduna Abd Allah ibn Umar (Allah be pleased with him) narrates that the Messenger of Allah (Allah bless him & give him peace) prohibited the selling of a debt in return for a debt (bay al-kali bi al-kali). (Sunan al-Bayhaqi, 5/290, Sunan Darqutni, 3/71 and Hakim in his al-Mustadrak, 2/57).

Due to the above reasons, futures transactions are totally impermissible in Shariah, regardless of their subject matter. Also, it makes no difference whether these contracts are entered into for the purpose of speculation or for the purpose of hedging. Both situations are impermissible.

Options

An option is a contractual agreement that gives the holder the right to buy (call option) or sell (put option) a fixed quantity of a security or commodity at a fixed price, within a specified period of time.

For example: A promises B that he will purchase a specific commodity for £100 at any time between the 1st of January and the 1st of March. B will have the right to sell that particular commodity to A for £100 within that period, but he will not be obligated, although if he does desire to do so, A will be obligated to purchase it. This option (of sale) which B has is known as the “put option”. If however, A promised B that he will sell him a specific commodity for £100 during a specific time, if B desired to purchase it, then this will be known as the “call option”. Here the holder of the option (B) has a right to buy the commodity whenever he desires during that fixed period, although he will not be obligated to do so. The one giving the option (or promising to buy or sell) will charge a fee for his promise and service.

Options contracts are not only restricted to commodities, rather one can also purchase options on future contracts, interest rates and currencies in the same way. The price one pays for the option is called the “premium” and the price at which it is agreed that one may buy or sell the commodity, etc… is called the “exercise price”.

The objective behind these option contracts is to guarantee oneself from the fall in the prices of commodities and currencies. For example: A purchased one British pound for two dollars. Now, he fears that if he keeps this pound in his possession, the value of the pound may fall in the future, thus he will suffer loss. But at the same time, if he was to sell his pound at present, he may well deprive himself of potential profit, for the price of the pound may rise in the future. Therefore, he enters into a options agreement where he purchases a option to sell his pound for two dollars for a specific period, thus if the price of the pound rises he will sell it in the market, and if it falls, he has the option to sell it for two dollars to the person from whom he purchased the option.

Moreover, these options have become an article of trade themselves, where individuals further sell these options to others in the options market.

From a Shariah perspective, options contracts are also unlawful (haram) and not permissible. The reason being, is that a promise to sell or purchase is in itself permissible and is morally binding upon the promisor, but this promise can not be a subject matter of a sale or purchase. In other words, it will not be permissible to charge a fee for making such a promise.

Similarly, it will not be permissible to further sell these options, for they are not something that can be traded in. An intangible object can not be a subject of sale according to the Fuqaha except with certain conditions, which are not met here.

Furthermore, there is an element of interest (riba) in these contracts. The extra fee charged by the one who makes the promise is in addition to the price of the commodity. This is more relevant where currency is being traded in.

For the above reasons, Shaykh Mufti Taqi Usmani (may Allah preserve him) issued the following Fatwa in his Contemporary Fatwa:

“Since the prevalent options transactions in the options market are based on charging fees on these promises, they are not valid according to Shariah. This ruling applies to all kinds of options, no matter whether they are call options or put options. Similarly, it makes no difference if the subject matter of the option sale is a commodity, gold or silver, or a currency; and as the contract is invalid ab-initio, the same cannot be transferred.” (See: Contemporary Fatawa, p. 152)

I hope I have been able to clarify the aspects related to futures and options transactions. And Allah knows best

Muhammad ibn Adam al-Kawthari
Source