UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Archive for February, 2020

Proposal for an Online Dispute Resolution Mechanism for the Islamic Finance Industry

Proposal for an Online Dispute Resolution Mechanism for the Islamic Finance Industry

 

By: Camille Paldi

 

The author proposes that for 2020 the Islamic finance industry aims to create an automated and online dispute resolution mechanism called (“DWIFAC”) or the Dubai World Islamic Finance Arbitration Centre and (“DWIFACJO”) or the Dubai World Islamic Finance Arbitration Centre Jurisprudence Office complete with an online Sukuk Bankruptcy Tribunal (“SBT”) and an online Takaful Tribunal (“TT”) and that DWIFACJO issue a standardized dispute resolution contract for each DWIFAC, SBT, and TT, which may be attached to the main contract (Paldi, 2020). The arbitration contracts may be delivered and executed online and uploaded through the secured DWIFAC online portal and DWIFAC App (Paldi, 2020). The DWIFACJO standardized dispute resolution contracts may contain a similar built-in dispute resolution mechanism as the FIDIC contract containing three stages including (1) the online Dispute Resolution Board (DAB), (2) online amicable settlement, and (3) final referral to online DWIFAC, SBT, and TT arbitration (Paldi, 2020). Within thirty days of the occurrence of the subject-matter of a dispute, any party to the contract may submit an online claim to the DAB through the DWIFAC online portal or DWIFAC App, addressed to the chairman of the DAB and with a copy e-mailed or texted to all parties of the contract (Paldi, 2020). The online claim can also be accessed through the online DWIFAC portal and DWIFAC App (Paldi, 2020). However, if any of the parties to the contract considers that there are circumstances, which justify the late submission, she may submit the details online through the online DWIFAC portal or DWIFAC App to the DAB for a ruling (Paldi, 2020). If the DAB considers that it, in all the circumstances, is fair and reasonable that the late submission be accepted, the DAB shall have the authority to override the relevant thirty-day limit and if it so decides, it shall advise both the parties accordingly via email or text message as well as upload the decision to the online DWIFAC portal and App (Paldi, 2020). All DAB decisions shall be accessible through the online DWIFAC portal and DWIFAC App (Paldi, 2020).

 

The DAB shall have sixty days to issue a binding online ruling, which must be implemented immediately and which will be available on the DWIFAC online portal and through the DWIFAC App (Paldi, 2020). The DAB decisions shall also be emailed or texted to the disputing parties (Paldi, 2020). The DAB may deliberate online and coordinate with other DAB members via text, e-mail, online chatrooms, and/or video-conferencing (Paldi, 2020). If either party is not satisfied with the DAB ruling, either party can give notice of dissatisfaction via email or text to the other party and upload the Notice of Dissatisfaction online on the online DWIFAC portal and/or the DWIFAC App before the thirty days after the day on which she received the decision on or before the thirty days after the day on which the said period of sixty days expired (Paldi, 2020). If there is no dissatisfaction within thirty days after the day on which she received the decision, the DAB’s decision, which shall be delivered electronically via email or text to all parties to the dispute and which shall be available on the online DWIFAC portal and/or through the DWIFAC App, shall become final and binding upon both parties (Paldi, 2020). The DAB’s decision may then only be overturned by online settlement or online arbitration at DWIFAC, SBT, or TT (Paldi, 2020).

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The DAB shall consist of three people who must be suitably qualified in law, Islamic finance, and Shari’ah (Paldi, 2020). Each party shall nominate one member for the approval of the other party (Paldi, 2020). The parties shall consult both these members and shall agree upon the third member, who shall be appointed to act as chairman (Paldi, 2020). However, if a list of potential members is included in the contract, the members shall be selected from those on the list, other than anyone who is unable or unwilling to accept appointment to the DAB (Paldi, 2020).

 

The agreement between the parties and either a sole member (adjudicator) or each of the three members shall incorporate by reference the General Conditions, which shall take into account all facets of Online Dispute Resolution, as written by DWIFACJO, with such amendments as agreed between them (Paldi, 2020). The composition of the DAB shall be by nomination and then joint-selection (Paldi, 2020). DAB members are to be re-numerated jointly by the parties with each paying half of any fees (Paldi, 2020). DAB members may only be replaced by mutual agreement (Paldi, 2020). The appointment of any member may be terminated by mutual agreement of both parties, but not by any party acting alone (Paldi, 2020). Unless otherwise agreed by both parties, the appointment of the DAB shall expire when the discharge of the matter shall have become effective (Paldi, 2020). Where the parties fail or are otherwise unable to agree upon the appointment, nomination or replacement of any member of the DAB, then the appointing official so named in the contract shall make the appointment (Paldi, 2020).

 

DWIFAC, SBT, and TT may establish an Ambassador’s List similar to the FIDIC President’s List, from which arbitrators and DAB members may be selected, if not specified in the contract (Paldi, 2020). Persons who have successfully completed a DWIFAC Adjudication Assessment Workshop and International Arbitrator’s Islamic Finance Contracts Course and applied for entry to the DWIFAC Ambassador’s List of Approved Dispute Adjudicators are entered on the List for five years (Paldi, 2020). Successful attendees at an Adjudication Assessment Workshop are required to be fluent in English and to be thoroughly familiar with Islamic finance, law, and Shari’ah (Paldi, 2020).

 

There may be situations where a party fails to comply with a DAB decision (Paldi, 2020). In such cases, the other party may refer the failure to online DWIFAC, SBT, or TT arbitration (Paldi, 2020). Where notice of dissatisfaction has been given, both Parties shall attempt to settle the dispute amicably online through video-conferencing, face-time, and/or chatrooms and texting before the commencement of arbitration (Paldi, 2020). However, unless both Parties agree otherwise, online arbitration may be commenced on or after the fiftieth day after the day on which notice of dissatisfaction was given (Paldi, 2020). The attempt to obtain an online amicable settlement during this prescribed period of fifty days is a condition precedent to a referral to online arbitration (Paldi, 2020). There is no given time frame to refer a dispute to online arbitration, however, it should be without undue delay (Paldi, 2020). Once the online arbitration procedure has been initiated, the online DWIFAC arbitration shall commence according to the online DWIFAC arbitration rules, the online SBT arbitration shall commence according to the online SBT arbitration rules, and the online TT arbitration shall commence according to the online TT arbitration rules (Paldi, 2020). Parties may upload statements and evidence for online DWIFAC, SBT, and TT arbitrations through the secured DWIFAC online portal and DWIFAC App (Paldi, 2020).

 

The arbitrator(s) shall deliberate the arbitration proceedings online and in conjunction with each other via e-mail, text, chatrooms, and/ or video-conferencing and face-time (Paldi, 2020). The arbitrators shall have full power to open up, review, and revise any decision of the DAB relevant to the dispute online (Paldi, 2020). Neither party shall be limited in the proceedings before the arbitrator(s) to the evidence or arguments previously put before the DAB to obtain its decision or to the reasons for dissatisfaction given in its notice of dissatisfaction (Paldi, 2020). Any decision of the DAB shall be admissible in evidence in the online arbitration (Paldi, 2020). Online arbitration may be commenced prior to or after completion of the contract (Paldi, 2020). The obligations of the Parties and the DAB shall not be altered by reason of any online arbitration being conducted during the progress of the contract (Paldi, 2020).

 

The online arbitration at DWIFAC, SBT, and TT shall be conducted in the English language and any arbitral decision shall be final and binding (Paldi, 2020). All of the online DWIFAC, SBT, and TT decisions are to be published online in English, French, and Arabic and the arbitration itself to be conducted in English (Paldi, 2020). All decisions are to be stored in electronically retrievable files (Paldi, 2020). In the event of a conflict of laws, the Shari’ah shall prevail (Paldi, 2020). A valid online arbitration decision should lead to a verdict that conforms to the rules of the Shari’ah (AAOIFI 2004:559) (Paldi, 2020). The Shari’ah and legal basis of the online arbitration decision shall be mentioned in the decision (AAOIFI 2004:559) (Paldi, 2020).

 

In the context of the online DWIFAC, SBT, and TT, the centers may make arrangements with the Dubai and DIFC or Dubai International Financial Center courts and Abu Dhabi Courts and the ADGM or Abu Dhabi Global Markets Courts for enforceability of online DWIFAC, SBT, and TT arbitration awards (Paldi, 2020). However, parties to the dispute must realize that the online arbitration award issued by DWIFAC, SBT, and TT may be overturned or enforced in other jurisdictions (International Bechtel Co. Ltd. v. Department of Civil Aviation of the Government of Dubai 300 F. Supp. 2d 112 (DDC. 2004) or challenged in UAE courts based on Article 216 of the Civil Procedure Law (Now Article 53 of the Arbitration Law) (Paldi, 2020). Higher Shari’ah Authority decisions shall act as a source of precedent and shall be binding, thus providing legal certainty to Islamic finance, takaful, and sukuk dispute adjudication (Paldi, 2020). The Higher Shari’ah Authority shall act as the highest Shari’ah authority for DWIFAC, SBT, and TT arbitration, the UAE, and the DIFC or Dubai International Financial Center and ADGM or Abu Dhabi Global Market (Paldi, 2020).

 

Bibliography

 

  1. FIDIC Red Book (1999) London; Thomas Telford Publishing.
  2. Paldi, Camille (2020) ‘Dispute Resolution in the Islamic Finance Industry’ in Abdul Rafay’s Handbook of Research on Theory and Practice of Global Islamic Finance, IGI Global Publishers, USA.

 

Islamic Finance in the United States

Islamic Finance United States Report 2019

By: Camille Paldi

 

*This article was first published by Islamic Finance News in their 15th Anniversary Edition in Feb. 2020.

 

Aside from the millions in sukuk issuances by East Cameron Gas, General Electric, and Goldman-Sachs and the billions in Islamic funds and under Islamic asset management in the USA, plus Islamic investing, and Islamic insurance or takaful, the main area of Islamic finance in the United States in 2019 is in Islamic home financing. The offering of retail investment products in the US is hindered by the fact that banks in the US allow consumers to share in profits, but not in losses. Under US regulations, a depositary amount must not be at risk and the system requires the backing of deposits by federal deposit insurance up to specified limits. In terms of equity investments, the US has had the Dow Jones Islamic Index among others since 1999. The index combines Islamic investment principles with the traditional Dow Jones index to allow Islamic investing in the United States. In 2019, the gross annual dollar value of retail Islamic finance transactions in the USA is approximately US$4 billion.

 

Although there is no nationally chartered Islamic bank in the United States, there are 25 Islamic financial institutions operating in the USA including University Bank’s subsidiary University Islamic Finance (UIF), LARIBA/Bank of Whittier, Devon Bank, and Guidance Residential among others. University Islamic offers home financing in the form of the Ijara home-financing model in California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Washington, deposit accounts, and Islamic mutual fund shares. SHAPE Financial Corporation modified the deposit product it offers through University Bank so that the principal is guaranteed, and the deposit-holders share only in bank profits and not losses. SHAPE offers asset financing and deposit account products in the US, Canada, Singapore, and Lebanon. J P Morgan started Islamic banking in 2013 and currently offers products in debt and equity capital markets, investor products, cash management and Murabaha liquidity products, risk management and asset management funds. Standard Chartered (UK bank) conducts Islamic finance worldwide through its Islamic ‘Saadiq’. Devon Bank in Chicago offers a mix of Islamic products including Islamic home, construction, and business finance. Devon bank also offers commercial murabahah and Ijara transactions for real estate acquisitions to business customers in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Michigan, Minnesota, Missouri, North Carolina, Ohio, Oregon, Texas, Utah, Virginia, and Wisconsin.

 

LARIBA/ Bank of Whittier (CEO: Yahia Abdul Rahman), based in California, offers banking and home financing across the USA in all fifty states. LARIBA offers a lease-to-purchase model with terms up to 30 years, or a variation of the Ijara model to finance homes, autos, and medical clinics and equipment. LARIBA also offers leasing with declining equity for construction of single-family homes and finances small businesses and trade. Guidance Residential offers home financing through its declining balance co-ownership program or a variation of the Musharakah in Connecticut, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, California, Oregon, Washington, Alabama, Arkansas, Florida, Georgia, Mississippi, North and South Carolina, Tennessee, Colorado, Kansas, Missouri, Texas, Arizona, Delaware, Kentucky, Maryland, Virginia, DC, West Virginia, Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.

Saturna Capital, an investment advisor and fund management company, manages funds, which are invested in Shari’ah compliant mutual funds, including Amana Mutual Funds such as the Amana Income Fund, Amana Growth Fund, Amana Developing World Fund, and the Amana Participation Fund.  Other Islamic investment firms include Arcapita, Azzad Asset Management (Azzad Funds), and Allied Asset Advisors (the Iman Fund).

 

These institutions are state-chartered entities subject to the same state and federal regulatory guidelines, corporate governance, banking and insurance operations and tax treatment as conventional financial institutions in the US including the requirement to be insured by the Federal Deposit Insurance Corporation. The US has not adopted any federal legislation specifically addressing Islamic financing as of yet. Although Islamic financial institutions may be qualified to do business in different states, the majority of an Islamic financial institution’s assets are located in the institution’s home state and licensing and other conditions must be satisfied with respect to any state where the Islamic financial institution seeks to be qualified as a bank or mortgage or loan finance provider.

 

 

In 1997, the Office of the Comptroller in the United States (OCC) issued two rulings approving the Ijarah and Murabahah structures for home financing. These structures have now been approved by the federal government, the NYSBD or New York State Banking Department and the banking authorities of several other states. Furthermore, the relevant authorities have removed the double tax jeopardy of these products where tax was incurred by the initial purchase and at the transfer of final payment. The tax authorities in New York and other states have handled this issue by eliminating double tax burdens on a case-by-case basis where the Shari’ah compliant structure was equivalent to a conventional financing structure. In 2008, the New York State Tax Department determined that no real estate transfer tax is due when the deed is transferred by a bank to its customer at the end of the lease term in accordance with the terms of the Ijarah arrangement.

Currently, institutions such as Whittier Bank/LARIBA in California, University Islamic in Michigan, Devon Bank in Chicago, and Guidance Residential in Virginia among others offer Islamic home financing in the United States. The Federal National Mortgage Association (Fannie Mae) and the Federal Home Mortgage Corporation (Freddie Mac) purchase Shari’ah-compliant mortgage contracts from financial intermediaries, allowing providers to originate further mortgages. In 2007, Freddie Mac purchased more than $250 million in Islamic home loans, a small fraction of the enterprise’s $1.77 trillion in activities. For the purposes of this short article, the author will focus on the Islamic home financing product offered by Whittier Bank/LARIBA.

 

The no-interest Islamic home-financing of LARIBA/Whittier Bank is based on two concepts: (1) Commodity Indexation and (2) Marking to Market. The no-interest discipline clearly states that fiat (paper) money can be used, and the U.S. dollar may continue to be the reserve currency of the world along with maybe the euro, but gold or a basket of commodities may be used to calibrate the real value of the currency. President John F. Kennedy and James Baker III (1987) have both approved and proposed these concepts previously in US history and monetary policy. John F. Kennedy attempted to introduce silver certificates with Executive Order 11110. In fact, at one time in history, the US dollar was backed by gold. Under the rule of the British Empire, the British pound sterling and the gold standard were adopted around the world. In 1913, the gold cover for Federal Reserve notes was set by 1913 law to be 40%. In 1945, the gold reserves against Federal Reserve notes were reduced to 25%, and to continue the inflation spiral, this figure (25%) had to be reduced to zero. Toward the end of WWII, the US dollar and gold became the principal international reserve assets under the Bretton Woods Agreement. The US dollar became the world reserve currency, and it was treated as if it were gold because the agreement defined its value to be $35 per ounce of gold. On August 15, 1971, President Richard Nixon ordered the gold window closed, ending the international currency’s link to gold.

 

This no-interest discipline is implemented in order to price things fairly in the market while detecting any overpricing ‘bubble.’ In fact, it is interesting to note that Dr. Rahman of LARIBA through his LARIBA system detected the 2008 bubble as early as 2005 using this Commodity Indexation Discipline. In fact, this system helps to fairly define prices and to standardize and stabilize markets, allowing the efficient working of the market forces of supply and demand. It lays the foundation of fair pricing for products and services, based on real market values within an open and free market operation. Thus, we can see that the no-interest banking brand is not based on renting money at a rental price (interest), but on the actual measured fair market rent of properties, businesses, and services.

 

The following example illustrates how the no-interest discipline may be used to buy a house. The buyer who wants to obtain no-interest finance and the no-interest bank should mark the house to market. The best way of doing this is to find out how much a similar house in the same neighborhood and with similar specifications would rent/lease for in terms of U.S. dollars per square foot (or euros/square meter). This mutually agreed-upon live market lease rate is used to calculate the rate of return on investment of the proposed purchase and no interest transaction, looking at it as a no-interest investment. If the rate of return on investment makes economic sense, the no interest bank proceeds to finance (invest in) the property. In addition, the no-interest bank does its best to make the monthly payments in the no-interest mode of finance competitive with those offered by conventional banks. Basically, the no-interest banking and finance discipline, in an effort to neutralize the effects of the prevailing fiat currency in the local markets, requires that the financier first apply the Commodity Indexation Discipline to check, in a macroeconomic way, on the existence of a bubble in the business/asset that is being considered for finance. This process is followed by the Mark-to-Market Discipline and approach, evaluating the economic prudence by calculating the real return on investing in this item, using its actual real market rental value. In this way, it is affirmed that money is not rented with interest and that the rent is that of the market rent of the facility in the marketplace.

 

With federal and state regulatory approvals in effect for Islamic home financing in the United States, there is an increase in the number of institutions providing Islamic home finance above and beyond the major providers of Whittier Bank/Lariba, Devon Bank, University Islamic, and Guidance Residential in the USA including Ijara Community Development Corporation and Ameen Housing Cooperative of California plus others. For 2019 and ahead, Islamic home finance is the future of Islamic finance in the United States with room for sukuk, Islamic funds and asset management, Islamic investing, and Islamic insurance or takaful however, in general, Islamic finance remains a niche segment of the larger conventional financial world for Americans.

 

In terms of the takaful or Islamic insurance business such as offered by AIG through Risk Specialist Companies Inc., Lexington Insurance Company, and Zayan Takaful among others, the US has a state-regulated insurance system whereby each state determines its own licensing requirements for insurers. In order to obtain a license, a company must demonstrate that it has the experience and management capability to run the company and show that it is financially sound. Insurers are also required to justify their premium rates.

 

In addition, companies must fulfil the solvency requirements set by the state. Furthermore, there may be limits on the types and concentration of investments made with ‘held’ reserves. These issues should be addressed in the state and federal takaful laws. The biggest challenge in introducing takaful, sukuk and Islamic finance in the US is the First Amendment of the US Constitution, which prohibits the making of any law respecting an establishment of religion or impeding the free exercise of religion as well as the Establishment Clause. (Murray v Geithner)

 

In Murray v Geithner, a case was filed against the Federal government challenging the permissibility of bailout money provided to AIG under the Emergency Economic Stabilization Act (EESA) legislation saying it violated the Establishment Clause. The Act gives the Treasury the ability to purchase troubled assets from any institution. In this case, EESA was used to purchase $40 billion in AIG shares. AIG conducts takaful business in Bahrain and the US. The plaintiff alleged that tax dollars were going towards the financing of Shari’ah products and activities. The court found that the EESA legislation and the AIG bailout were created for a secular purpose and did not violate the First Amendment of the Constitution.

 

In the US, the only type of takaful being offered includes commercial and residential property insurance.

 

In the United States, there are no specific disclosure or reporting requirements for takaful, sukuk, or Islamic funds that differ from conventional products under applicable federal or state banking, insurance, and securities laws.

 

Court disputes will be dealt with by applying applicable state law or foreign law, if the governing law of the contract is that of another country and US courts will not comment on whether an agreement or contract complies with Shari’ah principles.

 

Although there is a green light for Islamic finance in the USA, Islamic financial institutions may be at a disadvantage in possibly not being able to gain access to federal funds. Islamic institutions may also experience compliance issues as well as legal challenges. There are currently no listings of sukuk on US security exchanges.

 

 

 

 

 

Dispute Resolution in Islamic Finance: Problems and Solutions

 

*New Book Release*

In this book, the author will examine the Abrahamic principles underpinning Islamic finance, the rationale for a distinct economic system based on Islamic values originating from the moral teachings of Islam, Islamic finance dispute resolution and some of the problems experienced in adjudicating Islamic finance disputes in the conventional court system, and solutions in the field of Online Dispute Resolution for the Islamic finance industry as Online Dispute Resolution or (“ODR”) is the wave of the future. Available on Amazon now!https://www.amazon.com/Dispute-Resolution-Islamic-Finance-Solutions/dp/1096353571

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https://www.amazon.com/Dispute-Resolution-Islamic-Finance-Solutions/dp/1096353571

 

Journey to Islam

By: Camille Paldi

This article was first published on Literary Yard.

 

It just came out of my mouth.

 

لَا إِلٰهَ إِلَّا ٱلله

There is no god but God.

lā ʾilāha ʾillā llāh

 

مُحَمَّدٌ رَسُولُ ٱلله

muḥammadun rasūlu llāh

Muhammad is the messenger of God (Wikipedia).

 

Now, I was officially Muslim after reciting the shahada or declaration of faith in Islam. The shahada is the central statement of faith in Islam, recited ceremonially by new converts, and consisting of an affirmation of the uniqueness of God and of Muhammad as God’s prophet (The Free Dictionary). Muslims believe in all of God’s prophets with Muhammad (p.b.u.h.) as the seal of all Prophets. Muslims believe that Jesus was a prophet and not son of God. I was in the midst of studying for an LL.M degree at University of Hawaii William S. Richardson School of Law. I had recently returned to the United States after living for three years in the Emirate of Dubai, United Arab Emirates.

 

In fact, three and a half years prior to this date, I had embarked on a solo journey to the Middle East from Hawaii, which would forever change my life. I flew to Dubai with a few suitcases, hopes and dreams, and the enthusiasm of a fresh graduate of law seeking out employment and a new adventurous life full of travel, learning, and the absorption of all the different cultures and nationalities, which would surround me for my entire stay in the Emirates. In fact, I was lucky enough to see the Islamic jewels of art, culture, and architecture in the UAE, Oman, Pakistan, Lebanon, Malaysia, Indonesia, Egypt, Bahrain, and Qatar. The mosques beautify the atmosphere with their stunning art, architecture, design, and display and of course, the remembrance of Allah.

 

I gained employment at a local law firm called Global Advocates and Legal Consultants in the Garhoud district of Dubai, directly across the street from a quaint mosque. The owner Ali, often gifted me informative books about Islam and Arabs, which I read fervently and with a thirst for knowledge about Islam. We even read the Qu’ran together line by line, word by word and discussed and pondered its’ deep meaning and content. Islam is such a beautiful and peaceful religion, focusing on preparing the individual for the Day of Judgement, on which day one’s good and bad deeds would be weighed and a decision would be made as to whether or not one would enter Heaven or Hell.

 

I can distinctly remember hearing the Muslims call to prayer or adhnan five times a day and remembering how beautiful and peaceful it sounded, especially at 5 AM in the morning when the atmosphere was still, silent, and dark. I once told Ali that it sounded like honey dripping into my ears. Prior to converting to Islam, every time I heard the adhnan, it would stop me in my tracks whatever I was doing and cause me to ponder my existence. Muslims are reminded five times a day to return and submit to Allah or God and to remember that their ultimate return is to Him. The mortal’s place on earth is temporary and we are only here to fulfill our assigned tasks – assigned at our conception.

 

You see our entire lives are already written including how much money we might make, our spouses and children, work, the places we might travel and the people we encounter…everything is part of a larger plan…Allah’s plan. Once one as an individual comes to accept the greater plan and submit to Allah’s will, one might feel more content and satisfied with everything one has been given in this life and strive for a greater eternal life in Jannah or Heaven. This can only be done by fulfilling Allah’s wishes such as caring for the needy and the poor, taking care of one’s family, fasting during Ramadan, giving in charity, and increasing oneself in knowledge towards Allah’s cause.

 

I was struck by how well women seemed to be treated in Islamic countries. It seemed girls and women were always protected either by their fathers and brothers or husbands and that they were well maintained physically, emotionally, spiritually, and monetarily. They dressed elegantly, covering all of their skin in black dresses and wore a scarf to cover their hair. Women were not seen in public without remaining fully covered. Human beings should cover all of their skin in public as we are distinct from other animals. It makes sense. Honor is key in the maintenance and protection of women. In Islam, there are no relations between males and females prior to marriage. It is a question of honor for the female and the family of the female in question.

 

Everything in Islam has a rhyme or reason. For instance, fasting for one month from sunrise to sunset during Ramadan helps one keep their weight and blood-sugar under control, prevents cancers, and boosts the immune system. Fasting causes a pause in the digestion system, which then allows the digestive system to clean itself out and re-boost. Islam operates on a lunar calendar and there is really something special about the month of Ramadan that permeates the air. This is the month that Allah sent the Qu’ran down to earth through his messenger Muhammad (pbuh). During this month, one should reflect upon the Qu’ran, help those in need including the hungry and homeless, and focus on one’s role in submission to Allah. If one cannot fast for health reasons, one can donate to charity in lieu of fasting.

 

Fasting has a lot of health benefits like prayer benefits the individual in many ways. The Islamic prayer allows oneself to stretch one’s body out, improve circulation, aid in digestion, stretch all of the internal organs, and acts as a spiritual bath, leaving one feeling refreshed and revitalized after prostrating and praying to Allah. The washing of oneself prior to prayer or wudhu allows oneself to purify oneself five times though out the day, even rinsing the nostrils. This makes sense as it cleans out germs and other impurities, which might cause disease. One rinses the feet, hands up to the elbows, face, nostrils, and hair. Usually, the Muslim is very clean, pure, with good posture and good physical and mental health.

 

Imagine if this was done in America? Can you imagine companies allowing their employees to either leave the office and go to a mosque or prayer room to pray five times a day? It would be unheard of. However, I did find my counterparts in the Islamic world much healthier physically, mentally, and spiritually then in the West. Of course, as one lives for Allah and submits to His will rather than living purely for the market. The sense of purpose of the Muslim is deep and extends to fulfilling Allah’s will. We are only here because Allah allows us to be and we should remember that constantly throughout the day. We are only trustees of the earth and all that we have belongs to Allah. Allah tests one with wealth and power, however, it is important to remember that these are only tests to see how one treats other people and fulfill’s the will of Allah. Life is a test to see which among us are worthy to enter Jannah or Heaven.

 

Through Islam, I also learned not to eat pork, as the pig is a filthy, disease-carrying animal that eats dead flesh. Furthermore, halal meat, or specified meats slaughtered in the Islamically prescribed method, should be consumed to preserve ideal human health. In addition, one should pay attention to the specified halal foods as mentioned in the Qur’an and sunnah or the actions of the Prophet Muhammad (PBUH). Sunnah is the body of literature which discusses and prescribes the traditional customs and practices of the Islamic community, both social and legal, often but not necessarily based on the verbally transmitted record of the teachings, deeds, sayings, and silent permissions (or disapprovals) of the Islamic Prophet Muhammad (PBUH) (Wikipedia).

 

One should also avoid alcohol, as it is a dangerous intoxicant that leads to the disruption of the fabric of society, the family, and the deterioration of the health and well-being of the individual. Gambling is also a dangerous activity which destroys society, as it is a zero-sum game in which one party wins at the other party’s expense.

 

The five pillars of Islam include (1) shahada or reciting the Muslim profession of faith; (2) salat or prayer; (3) zakat or paying alms (or charity) tax to benefit the poor; (4) sawm or fasting; (5) hajj or pilgrimage to Mecca.

 

My journey to Islam began with one brave soul stepping on a flight from Honolulu, Hawaii, to Dubai, United Arab Emirates, in 2008, and continues to this day as I study and contemplate Islam and the Qur’an.

 

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance