Money laundering with particular reference to the banking deposit transactions. An Islamic perspective
| Published date | 08 August 2008 |
| Date | 08 August 2008 |
| Pages | 251-260 |
| DOI | https://doi.org/10.1108/13685200810889399 |
| Author | Mahmood Mohamed Sanusi |
| Subject Matter | Accounting & finance |
Money laundering with particular
reference to the banking deposit
transactions
An Islamic perspective
Mahmood Mohamed Sanusi
Ahmad Ibrahim Kulliyah of Laws, International Islamic University Malaysia,
Kuala Lumpur, Malaysia
Abstract
Purpose – The purpose of this paper is to explain the theoretical framework of money laundering
and expanded to study it from the Islamic perspective. As money laundering sustain truly “global
issues” and thus should be treated as such. The purpose is to examine the conception of money
laundering under Islamic law in conjunction with the discussion of Islamic law of contract; the most
common methods in money laundering involving numerous cash deposits at various bank branches,
followed by the purchase of a secured bank instrument, such as cashiers’ check; how far is Islamic law
able to provide rules, norms in protecting financial institutions, customers and the public from
criminal activities?
Design/methodology/approach – The paper depended on primary data. The data were procured
from the Holy Quran, Prophetic Sunnah which embodied all tenets of Islamic law, and in addition,
from the books of the Classical Muslim scholars.
Findings – It has been revealed that Islam has initially taken great interest in the market condition,
business conduct and economic system. Generally speaking Islam law prohibits all business conducts
which compromise unjustified consumption, misappropriation of one’s wealth thus creating
parasitical classes of people obtaining wealth and money being the root of all criminal activities;
financial crimes and the concept of money laundering have been categorised as a division of Islamic
criminal law which has been addressed via many provisions in the Quran and Prophet’s Sunnah; the
prophet and his successors have developed the Institution of Hisbah to control malpractices and
criminal activities. Moreover, Islamic law prescribes a set of principles, rules and measures to deal
with acts that are most likely to affect the economic scenario.
Originality/value – This invaluable paper identifies the attitude of the Islamic law in monitoring
and preventing the concept of money laundering, further distinguishing between illicit gains
(al-Kasb al Haram) and lawful gains. Finally, this paper reviews the Islamic norms relating to
confiscation and forfeiture of Ill-gotten wealth and property.
Keywords Money laundering,Islam, Criminal forfeiture,Savings banks
Paper type General review
Introduction
As the international financial system has expanded, so too has the abuse of the system.
One of the abuses that have gained ground, due to the free trade of goods and services
and the contemporary need for easy capital mobility, is the increase and spread of
money laundering. This can be defined as the conversion of the monetary proceeds
from criminal and illegal activities into legitimate funds to make it look like money that
has been obtained legally.
The current issue and full text archive of this journal is available at
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An Islamic
perspective
251
Journal of Money Laundering Control
Vol. 11 No. 3, 2008
pp. 251-260
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685200810889399
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