Fatwa: # 43868
Category: Business Matters
Country: African Country
Date: 2nd December 2019

Title

What are Sharia Compliant Sukuks?

Question

Salams

What are Sharia compliant sukuks?

Can mufti saab explain and define halal sukus in order for me to differentiate between halal and haram sukuk.

Jzk

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Brother,

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) defines Sukuk as “certificates of equal value representing undivided shares in ownership of tangible assets, usufruct and services (in the ownership) of the assets of particular projects or special investment activity”.

Accordingly, Sukuk can also be described  as ‘Islamic investment trust certificates or securities’. Sukuk certificates confirm an investors’ ownership interest in the underlying Sukuk asset, business, enterprise or project which entitles them to receive a share of the income generated thereby.

Many a time Sukuk is also referred to as "Islamic bonds".

The key principles relevant to structuring a Halal Sukuk  are the same as the principles which apply to other Islamic financing structures, and can be summarised as follows:

1) The charging or receiving of interest (Riba) is prohibited .

2) The underlying Sukuk assets must be Shari’ah-compliant. The assets or businesses underlying the Sukuk must be Shari’ah-compliant and therefore cannot be related, for example, to gambling or to the production or sale of alcohol or pork.

3) Prohibition on uncertainty (Gharar), speculation (Maysir) and ignorance (Jahl).

There are many different types of Sukuk. 

The eight most common Sukuk structures are :

  • Sukuk al-ijara
  • Sukuk al-wakala
  • Sukuk al-mudaraba
  • Sukuk al-musharaka
  • Sukuk al-manafa’a
  • Sukuk al-istisna’a
  • Sukuk al-murabaha
  • Sukuk al-istithmar

However, we cannot issue a ruling on the permissibility or impermissibility of  any Sukuk agreement as each one may differ according to the contract and agreement between the parties.

If you do wish to enter into a Sukuk transaction you may send us the documents and agreements of the Sukuk agreement. We will then analyse it and advise you accordingly.

Kindly email your question to admin@daruliftaa.net (Reference: Ahmad Patel)

And Allah Ta’āla Knows Best

Ahmad Patel

Student Darul Iftaa

South Africa

Checked and Approved by,
Mufti Ebrahim Desai.

_________

1] فقه البيوع (153-155/2) 

2] كتاب الشروط و علوم السكوك(ابو نصر احمد بن محمد السمرقندي الحنفي)

3] https://www.lw.com/thoughtLeadership/guide-to-structurings-sukuk

4] An Introduction to Islamic Finance (Mufti Taqi) (18-22)

5] Sukuk and their contemporary applications (Mufti Taqi Uthmani)

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