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In countries that do not have an Islamic Legal system, disputes related to Islamic financial transactions can lead to outcomes t - Research Paper Example

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Name: Institution: Course: Tutor: Date: Introduction Understanding the nature of law requires legal reasoning, understanding of the legal institutions of a given region or country and digging deeper to understand the legal systems; the civil law, common law and religious laws…
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In countries that do not have an Islamic Legal system, disputes related to Islamic financial transactions can lead to outcomes t
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Download file to see previous pages Sharia law, as a moral code and religious law for Muslims; addresses various perspectives of human activities such as economics, crimes and politics, as addressed by secular laws, and it seeks to differentiate intentions, interactions and decisions between those that are good and those that are bad (MacEoin and Green, 2). Just like the secular laws, Sharia code of ethics touch on various interactions of the human race giving the prospects and punitive aspects whenever the codes are breached, though from the secular observation of Sharia being a religious law, it has provisions that make the laws holistic in guiding and governing human interactions making it fall under and satisfy individual legal systems. Economically, just like Christian finance, Sharia economics presents the economic systems that conform to the Islamic scriptures and traditions; behavioral norms and foundations, Zakat tax as the basis of Islamic fiscal policy and other economic provisions that holistically covers the economic and finance sector (Bonner, 397). Though close and similar to the secular and other traditional laws, in countries that there is no Islamic Legal System, disputes related to Islamic Financial Transactions can lead to outcomes that contradict Sharia Principles. Sharia principles like the secular laws have provisions that govern the Islamic Investment Funds; where investors pool their surplus money for the purpose of its investments to earn profits, Halal, but governed and in strict conformity with Sharia laws, and the subscribers receive certification entitling their pro- rated profits accrued from the fund. The Islamic banking phenomenon is based on sector of profitable for investor that represents growth for positive reputation and responsible management, and by fueling growth that is necessitated by increasing demand stimulated by rising number of Muslims in common law and civil law countries (Imady, Omar and Hans, pp.4-6). The conflict is bound to occur especially on the business ethics provided for by Sharia laws in relation to these countries’ provisions whereby the Islamic economic systems are neither socialists nor capitalist, conflicting interests of natives and the economic outlook of these countries. For instance, Sharia provides for Zakat; a practice of charitable giving by Muslims based on the accumulated wealth, and obligatory to all that are able to do so, contravenes with capitalists economies where in most cases taxation is mandatory to all irrespective of economic background and/ or social class. This would further lead to conflicts especially if certain sections of Sharia have to be incorporated in these countries’ laws such as contractual agreements and financial transactions due to different expectations from both sides and the conflict to the national interests. Capitalist societies/ economies rely on creation of value which can be tangible, for physical goods and/ or intangible for services; which involves transactions that mutually benefit the parties, the consumer gets the added value to the product/ service, and the retailer or the producer gets the entrepreneurial profits and royalties which may include interest on shares. To the contrary, the Sharia provisions for legal entity or a business that is Halal as a company that does not borrow money on interest and/or keeps their surplus in interest bearing accounts; and that one being a shareholder of such a company becomes a Sharik, agent for the partners in the matters of ...Download file to see next pagesRead More
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