Islamic Shari'ah Banking, Is It Invading America?

The New Media Journal ^ | April 24, 2008 | Warner Todd Huston

[NewMediaJournal]

The Daily Record in Baltimore, Maryland recently published a story by Brendan Kearney that oddly seems to present a conflict between a bank employing Islamic Shari'ah law with its American investments and some black American borrowers and painting it as a racist issue. Sadly, the real story, that of Islamic law being imposed on American investors, is sidelined in order to pursue the race card. (Full story reprinted at BlackEnterprise.com)

As The Record reports, a black couple in Baltimore -- I identify their race because it is pivotal to how the Record reports the story -- had contracted with the Church's Chicken restaurant chain to open a new outlet in Baltimore. Unfortunately for the entrepreneurial couple, as they were investing in their chicken outlet, Church's Chicken was purchased by Crescent Capital Investments Inc., the US affiliate of the Bahrain-based First Islamic Investment Bank BSC. And, upon the restaurant chain's purchase, these new Islamic corporate owners decided to institute Shari'ah laws upon their investments.

This caught the Beasleys new restaurant in a tough spot because pork products were on the morning breakfast menu for the Church's Chicken chain. Because Shari'ah law principles had been imposed on the Beasleys' new restaurant, they would be barred from serving their breakfast menu items, their corporate owners informed them. This barring from being able to serve their breakfast items, the couple maintains, contributed to the restaurant's failure and their eventual bankruptcy.

[Psycho_Bunny]

No matter how you cut it...no matter what angle you look at it from...no matter how open-minded you try to be: Islam Sucks.

It's as simple as that.

[Parmenio]

Here is an article that examines some of the legal risks of shariah based finance.

“Shari’Ah’s Black Box: Civil Liability and Criminal Exposure Surrounding Shari’Ah-Compliant Finance”

published in Utah Law Review

by DAVID YERUSHALMI
Institute for Advanced Strategic & Political Studies

Abstract:

This article examines the multitude of legal issues - both criminal and civil - that Shari’ah-compliant finance (SCF) presents to U.S. financial institutions and their professional advisers.

In short, SCF is the practice of investing in conformity with Islamic law (Shari’ah). Such investment appears at first glance innocuous. With only a modicum of probing, however, SCF turns out to be a black box, where the financial industry and their legal professionals have hidden a doctrine at war with the West and have ignored the dangers and risks posed by Shari’ah authorities who determine the rules and principles of this industry.

While SCF is marketed as primarily the avoidance of transactions involving interest and also includes a prohibition on investing in vice industries, this appearance ignores the reality of Shari’ah as determined by the contemporary and authoritative historical Shari’ah scholars. With a modicum of due diligence, one learns that the SCF black box fails to disclose the fact that leading Shari’ah authorities have issued authoritative Shari’ah legal rulings calling for violent Jihad against the non-Muslim world. As such, SCF presents U.S. investors and legal advisers with considerable risk under securities, anti-terrorism, antitrust, and racketeering laws.

“To this point, the civil liability and criminal exposure surrounding SCF have been ignored by legal academia. Although some scholars have broached the topic of SCF, these scholars have merely trumpeted the practice’s virtues without questioning its legality. In an area that begs for vigorous analysis, only those with a vested interest in the success of SCF has been presented in the legal literature. This article, by identifying both professional responsibility and substantive legal issues inherent in SCF, seeks to fill in the current gap and instigate a much needed critical examination among practitioners, scholars, and policymakers.

This article is truly the first of its kind. Given academia’s failure to challenge Shari’ah - compliant finance or even engage in serious debate about its feasibility in the U.S. legal system, the article is certain to provoke strong responses from both proponents and detractors of the SCF industry.

Available for download here:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1105101