Sharia-compliant finance (SCF) refers to commercial (especially lending) transactions conducted in accordance with Islamic law. Typically, interest is not charged in SCF transactions. In addition, SCF avoids investments in certain industries, such as the pornography, pork, alcoholic beverage, and gambling industries. In addition, the investors must comply with Muslim rules regarding the zakat, or a charitable contribution aimed at supporting the poor. Note, however, that while sharia forbids the charging of interest, SCF has developed ways to get around this prohibition. Problems presented by SCF include that it enables racketeering, antitrust activity, securities fraud, consumer fraud and material support for terror.


David Yerushalmi, Esq., Civil Liability and Criminal Exposure for U.S. Financial Institutions and Businesses Engaged in Shariah-Compliant Finance ( ). (Caution: large file).

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