Sergey Bizyukov1
  • 1 Managing Partner at Law Bureau Paktum, Saint Petersburg Chamber of Lawyers, 87 Maliy Prospekt, Saint Petersburg, 197022, Russian Federation.

Legal Subterfuges in Islamic Law: from the Middle Agesto the 21st Сentury

2014. No. 3. P. 31–54 [issue contents]
The article is devoted to the role and significance of legal subterfuges in financial instruments applied inthe Islamic banking system (hereafter IBS). The paper studies the concept of subterfuges, exemplifiestheir application and an outline of Islamic legal conceptions which existed in the Middle Ages as certaindeals to bypass Quran Prohibition of riba, which was originally understood as spare money (interest),resulting from loan operations. When the 1970s and 80s a campaign was launched to Islamizeknowledge enveloping such spheres as economics, the subterfuges which appeared in the MiddleAges were understood as forms for modern Islamic financial instruments. Many of them were the meansto bypass riba as a loan interest forbidden in Islam. The paper analyzes the subterfuges to bypassthe prohibition on interest loan riba in the current operations of Islamic banking system. The papershows the changed role of Islamic law in finances which is not law regulating IBF operations and thenorms are recognized no more as legally binding but are ethical maxims of a sort lacking legal content.Moreover, the reference in a financial contract to Islamic law (sharia) may be only considered as shariarisk increasing the voidability of the deal in court. The article concludes that almost all the consideredIslamic financial instruments and schemes are based on such subterfuges. It is evident that in theconditions of high competition with conventional banks in Islamic countries especially in the area offinancial finances, this Islamic banking model without resorting to the subterfuges to bypass the ban onloan interest riba is becoming non competitive.
Citation: Bizyukov S. (2014) Yuridicheskie ulovki v islamskomprave: put' ot Crednevekov'yado xxi veka [Legal Subterfuges in Islamic Law: from the Middle Agesto the 21st Сentury]. Pravo. Zhurnal Vysshey shkoly ekonomiki, no 3, pp. 31-54 (in Russian)
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