Money laundering laws and principles of Shari'ah: dancing to the same beat?
| Date | 19 July 2011 |
| DOI | https://doi.org/10.1108/13685201111147513 |
| Pages | 198-209 |
| Published date | 19 July 2011 |
| Author | Siti Faridah Abdul Jabbar |
| Subject Matter | Accounting & finance |
Money laundering laws
and principles of Shari’ah:
dancing to the same beat?
Siti Faridah Abdul Jabbar
School of Accounting, Faculty of Economics and Management,
Universiti Kebangsaan Malaysia, Bangi, Malaysia
Abstract
Purpose – The purpose of this paper is to analyse the criminalisation of money laundering, corporate
criminal liability for money laundering, equitable liability of professional intermediaries for money
laundering and defence of disclosure from the perspective of Shari’ah.
Design/methodology/approach – The approach is to interpret and analogise the injunctions in the
primary sources of Shari’ah, namely the Qur’an and Sunnah.
Findings – In Islam, money laundering can be classified as a criminal offence of ta’zir, corporations
cannot be made criminally liable for money laundering, professional intermediaries can be made
equitably liable for money laundering and defence of disclosure is acceptable.
Practical implications – Money laundering laws can be adopted with some modifications by
Muslim jurisdictions where Shari’ah is the principal source of law.
Originality/value – The paper presents novel insights into the compatibility of money laundering
laws with the principles of Shari’ah.
Keywords Crimes, Finance,Islam, Money laundering
Paper type Viewpoint
Introduction
Money laundering brings many adverse economic, financial, social and security
consequences. It misallocates resources and income distribution, distorts asset and
commodity prices, and breeds social ills, crime and corruption, to name but a few. These
negative repercussions are precisely those that Islam seeks to avoid. This is evident, for
example, in Islam’s promotion of equitable distribution of income, resources and wealth
among mankind so that a just socio-economic order may be established for the benefit of
the society at large (Mannan, 1982; Ahmad, 1991, 1999). Socio-economic justice is central
to the Islamic way of life, thus, any unconditional possession and use of wealth that
endangers the interests of society or disturbs public order is condemned and prohibited
(Ahmad, 1991). According to Islam, one’s needs are to be satisfied without sacrificing
that of another (Baldwin and Wilson, 1988). In fact, one is required to use part of the
wealth that one has obtained from God’s bounties for the benefit of one’s fellow-beings
(Mannan, 1982). This stems from the fact that in Islam, wealth is regarded as a gift from
God, which is given as a trust and human being, as trustees, are to utilise the wealth to
establish prosperity on earth and in the hereafter (Mannan, 1982). Accordingly,
a Muslim is to engage in economic activities that would fulfil his obligation of trust and
this is known as the principle of economic trusteeship (Metwally, 1997). Nonetheless, this
does not mean that Islam does not recognise private ownership. The right of
private ownership, however, is not absolute and unconditional because it is subject
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
JMLC
14,3
198
Journal of Money Laundering Control
Vol. 14 No. 3, 2011
pp. 198-209
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685201111147513
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