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ECONOMIC AND FINANCIAL CRIMES AND ICT INFRASTRUCTURE: THE ISLAMIC CRIMINAL LAW PERSPECTIVE Yusuf Ibrahim Arowosaiye ibrahimyusuff@gmail.com Ahmad Ibrahim Kulliyyah of Laws International Islamic University Malaysia Do not mischief on the earth, after it has been set in order, but call on Him with fear and longing (in your hearts: for the mercy of Allah is (always) near to those who do good Surat (7) Al-Araf, verse 56 Whoever deceives us is not part of us Reported by Muslim. Introduction The contemporary phenomenon of economic and financial crimes and ICT infrastructure as facilitator is adversely affecting the stability of the international financial system and the economic growth and development of many nations of the world, especially the developing countries. Fighting economic and financial crimes has therefore been a major preoccupation of many legal systems across the globe. The Islamic law, as a recognised legal system, is expected to respond to these developments within its jurisprudential ambit and to contribute to the development of a harmonised international regulatory framework in combating the trends. The phrase economic and financial crimes may not exist under the Islamic jurisprudential parlance. However, Islamic criminal law recognises economic and financial crimes which though are non-violent but are likely to impact adversely on the wellbeing of the people. This paper examines the Islamic law approach to the prevailing phenomenon of economic and financial crimes and ICT infrastructure as facilitating tools. Fighting economic and financial crimes requires both legislative and non-legislative measures. This paper explores the Islamic law dynamism in combating economic and financial crimes and ICT related crimes. Concept of Economic and Financial Crimes under Islamic Law The phrase Economic and Financial Crime is not a common usage under Islamic criminal law. This is not to suggest that Islamic law does not consider as imperative crimes that may adversely affect the economy, political cum social wellbeing of the people. The common theoretical usage of the phrase Economic and Financial Crime might not have been widely embraced by early Islamic scholars and most probably the contemporary Islamic jurists. The fact remains that in content and substance these classes of crime that constitute the generic phrase Economic and Financial Crimes1 are adequately proscribed under Islamic law as will soon be examined in this paper. Under Islamic law, economic and financial crimes have been classified within the division of criminal law which forms part of the corpus of Islamic jurisprudence. As was rightly observed, any reference to Islamic jurisprudence has included several nominated crimes It is instructive to note at this juncture that there is dearth of materials and as well incomprehensive study on the subject of economic and financial crimes and ICT infrastructure as facilitating tools from Islamic law perspective. This is not an admission of legal infirmity of

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Islamic law as erroneously perceived by those who are ignorance of the potentiality of Islamic law.2 This is rather a reflection of the differences between the past and the present.3 As earlier reiterated, economic and financial crime is a traditional crime. However, ICT facilitated economic crimes have not been specifically identified and defined under Islamic law. Islamic law does have a general and comprehensive conception of economic crimes which include offences ranging from corruption, money laundering, obtaining wealth illegally or taking financial advantage by deception and fraud.4 These are contemporary crimes that did not exist in early Islamic society and are yet to be comprehensively analyzed under the Islamic jurisprudence. Be that as it may, the contemporary classification of economic and financial crimes and the influence of ICT infrastructure in the commission of these crimes will be examined in this paper from Islamic jurisprudential point of view. Definitions and Typologies of Economic and Financial Crimes under Islamic Law Criminal acts are forbidden acts punishable under the Shariah in accordance with the prescribed punishment for such offences.5 In other words; crime under Islamic law is defined as any legal prohibitions imposed by Allah which violation entails punishment set down in accordance with the Shariah.6 To some Islamic legal writers, crime in Islam literally refers to the act of committing an offence.7 In this context crime has general and specific meanings. The general meaning of crime refers to an act of committing any sin or transgression that Allah (SWT) had commanded believers to avoid even though no specific punishment is prescribed for transgressing the commandments. Sins like lying, hatred, envy, greediness, meanness, scandal and backbiting are all prohibited acts to be punished in the hereafter even though no specific punishment has been decreed against the offender in this world.8 The general meaning of crime is therefore restricted to shameful deeds in relation to moral and ethical aspects with no penal sanction. However, the specific meaning of crime here are those criminal acts proscribed by the Islamic Penal Code and backed by appropriate sanction in the event of violation. In this sense, crime is defined as an illegal act that harms an individual or his property. Furthermore, crime means any act against righteousness and justice. In a strict legal sense, crime under Islamic jurisprudence means criminal actions that are prohibited by the Shariah for which Allah (SWT) prescribed a Hadd or a discretionary punishment.9

Economic and financial crimes under Islamic law comprise of both violent and non-violent crimes. By contrast, conventional law and common law jurisdictions adopt the common definition of economic and financial crimes as non-violent criminal activities committed with the sole purpose of earning wealth illegally. Islamic law conceptualised economic crimes as comprising of both violent and non-violent criminal activities. The Islamic law conceptualisation of economic and financial crimes is most encompassing in underpinning the ordinary and extreme results of such crimes. In actual sense, the Islamic law conception of economic crimes and the conventional law approach share the same objective but the reality is that economic and financial crimes in its holistic sense are not totally devoid of violence.10

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Against the above background, economic and financial crimes under Islamic law have been classified under four major headings and sub-categories; theft, confiscation, bribery and gaining money or acquiring wealth illegally. It is instructive to note that the above classification of economic crimes under the Islamic Law is not so sacrosanct. Many other forms of economic crimes such money laundry, advance fee fraud, theft of intellectual property rights, internet fraud and so on can be accommodated under the Islamic typology of economic and financial crimes. The fluidity in the above categorization will be exemplified shortly in the later part of this paper.

Theft as Economic Crime Theft ordinarily means the taking of property belonging to another secretly and with fraudulent intention of appropriating it. The seriousness of the offence of theft often depends upon the value of the stolen property as well as the method adopted in stealing the property.11 From the above exposition theft or stealing in whatever form leads to a similar result of moving and acquiring anothers property with dishonest motive which is against the Islamic injunction. One of the cardinal objectives of Shariah (Maqasid Shariah) is that it strives to protect private and public properties against theft, destruction or unauthorized interference. Individual property belongs to the individual and so public property is the common heritage of all which cannot be enjoyed legally by individual and selected group of people based on their social status. Therefore, individual properties must not be misappropriated while public funds are not to be abused. Anything to the contrary will be considered as peculation. The Holy Prophet (SAW) warned believers in his farewell address during the Hajj al-wida (farewell pilgrimage) thus, your lives and properties are forbidden to one another till you meet your Lord on the day of resurrection. A caution similar to the above warning on the need to uphold the inviolability of property and its sanctity is contained in the Quran (al-Nisa: 29) where Allah (SWA) states; O you who believe! Eat not up your property among yourselves unjustly except it is a trade among you, by mutual consent Theft as an economic crime is punished severely because it deprives the owner of a property of the benefit of whatever purpose he might desire to put it into use. It also creates fear, distrust and apprehension among individuals in a community. Taking into account the consequential effect of the crime, the punishment for theft liable to hadd is amputation of the right hand of the convict from the joint of the wrist.

Bribery (Al-Rishwah) and Corruption Bribery or Al-Rishwah in Islamic legal parlance means an offer or promise of whatever nature given to someone in order to influence him or persuade him to do something which is unlawful in the circumstances in favour of the giver.12 In other words, it is an incentive that is illegally

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given to someone in position of authority to influence his sense of justice, due process and discretion. Bribery as a form of economic crime is prohibited under the Islamic law. The Prophet (SAW) was reported to have said, Allah has cursed one giving bribe and one receiving bribe as well as the go between.13 Thus, from the above prophetic tradition, an administrator, a civil servant and all other classes of people entrusted with authority are strongly forbidden from taking bribe or allowing themselves to be unduly influenced in the discharge of their duties for any form of consideration or unlawful reward. The common practice of offering gifts to public officers or people in authority is strongly condemned under the Islamic law because of its tendency to encourage and institutionalize dishonest practices.

The Prophet (SAW) was reported to have sent Abdullah bin al-luthbiyyah Azdi to collect the Zakat for Bani Sulami tribe. In rendering account to the Prophet (SAW), Abdullah indicated a portion of the collection given to him as a gift. The response of the Messenger of Allah (SWA) was; If you were sitting in the house of your father or your mother would any one give you that gift if you are really truthful.14 Giving of gifts to people who occupy public office or position of authority, by the consensus of scholars, are not to be accepted and if at all to be accepted based on any compelling circumstances; it should be paid into the public treasury (Bait almal).15 Caliph Umar (RA) was reported to have sent to all his governors the following message; Beware of gifts because they form part of bribe.16 The above instruction is imperative in view of the dangers that go with the habit of accepting gifts by people entrusted with authority most especially in the modern society where the craze for material wealth is on the increase. Bribery therefore is an economic crime under Islamic law which must be avoided by both believers17 and non-Muslims due to its evil consequences. The Prophet (SAW) has warned; There will come the period when bribe will be made lawful by people through gifts and murder through admonitions.18 Bribery unlike the offence of theft, whose punishment is prescribed by the Quran,19 is punished based on a penalty fixed by the authority or at the discretion of the judge at the trial. Bribery will fall under Tazir since the punishment for such crime is not mentioned in the Holy Quran or the Sunnah of the Prophet (SAW).20 Contemporary Economic Crimes and Islamic Law The wind of globalization blowing across all continents of the world and the development in ICT has accentuated rapid economic and social interactions among nations and people of diverse backgrounds. As a result some traditional crime metamorphosed into continental crimes while some new crimes emerged. Some of these contemporary crimes include official corruption, insider dealing, currency counterfeiting, cyber piracy, credit card fraud, money laundering, internet online fraud, cyber laundering, phishing and advance fee fraud to mention but a few. The emergence of these crimes no doubt necessitates the over hauling of the existing penal laws of almost all the known legal systems, though at different levels of modification and amendment. The Islamic law, as a progressive legal system is also expected to address those contemporary

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economic crimes facilitated by ICT infrastructure. Be it noted that the slow response of Islamic law to these contemporary crimes does not mean that the Islamic legal texts lack the potentiality and capacity to address the problem. The principles of the Islamic jurisprudence can amazingly establish appropriate legal response by diagnosing a current case and exposing it to relevant original text in order to set up a suitable legal decision.21 This methodology will be applied in this paper to explore the Islamic law response to contemporary economic and financial crimes and ICT related offences. Money laundering as Economic Crime under Islamic Law There is no gain saying that money laundering has become a global phenomenon with relevant regional and international institutions working tirelessly in formulating legal framework to combat it. Although money laundering is a contemporary crime, conceptual wise it has been addressed over 1,400 years ago under the Islamic jurisprudence.22 Although there is no specific definition of the economic crime of money laundering in Islamic jurisprudence however, the essential justification for prohibiting money laundering are well embedded under Islamic law. Money laundering is all about illegal criminal activities, illegal commercial operations which aim to convert massive amount of money that are derivable from illegal activities (for example corruption, embezzlement, drug trafficking, terrorist activity, prostitution, fraud and so on), into legitimate proceeds.23 In other words it is a process of transforming proceeds from illegal activity into proceeds from legal activity. The Islamic ruling on money laundering can be garnered from relevant the Quranic injunctions and the Sunnah. Money laundering involves the process of concealing the origin of proceeds from illegal activity by giving it the appearance of legal sources.24 It was well reported that the Prophet Muhammad (SAW) prohibits any activity funded by money derived from Soht (unlawful trade or ill-gotten property). Thus; Any activity built from Soht, will be caste into fire.25 Money or property that is acquired through illegal means is patently unclean (haram) and unlawful which must not be put into use by anyone either for himself or for the benefit of others.26 The Prophet (SAW) was also reported to have warned that prayers and supplications of the one who lives on property or income derived from unlawful means will not be accepted by Allah and in case he does good deeds, they will not avail him.27 The common method of concealing the origin or identity of proceeds from illegal activities is through bank deposit or structured transactions. Money laundering activities are not restricted to conventional banks and financial institutions. Proceeds from illegal activities could also be deposited in Islamic banks and financial institutions in form of banking deposit (al-wadiah). However, the fundamental question here is, how does Islamic jurisprudence view the contract of al-wadiah (banking deposit)? And how far does it insist on business ethics and moral principles?28 To address these posers in light of money laundering activities within Islamic banking and finance, it is imperative to attempt the definition of the contract of al-wadiah. The term wadiah is derived from the verb wadaa which means to leave, lodge or deposit. Wadiah in its ordinary meaning means leaving something for safekeeping in somebodys custody. In the light of the above definitions, wadiah in a pure legal sense means a thing entrusted to the care of another. The proprietor of the thing is known as mudi (depositor), the person entrusted with it is

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known as wadi or mustawda (custodian) and the deposited asset is wadiah. Money laundering through bank deposit (al-wadiah) is obviously a bogus transaction. Thus, the intention of the launderer who deposits money in Islamic bank and financial institutions is not for safe custody but rather to take advantage of the facilities offered by Islamic banks to actualise his/her criminal activity.29 The Islamic law position with regard to such bank deposit (contract of al-wadiah) is that such contract would be regarded as void since it is tainted with fraud (tadlis, taghrir), concealment of information and illegality. Ibn Qayyim was reported to have said that Islamic law and its rules specify that the intention and the motive behind contract is an essential consideration and affects their validity.30 Money laundering as an economic crime is totally prohibited in Islam. The Islamic economic system is premised on a comprehensive system of moral and divine principles regulating social cum economic affairs of the people in terms of their business conducts; consumption and protection, wealth creation and distribution.31 Any other manner of unlawful wealth acquisition, which is incongruous to the well being of the society, is prohibited in Islam. However, Islam never objects to wealth creation and acquisition provided it is pursued through lawful means. This submission is amply justified by the saying of the Holy Prophet (SAW) that, Anybody raised an unlawful provision will be fuel for the fire of Hell on the Day of Judgment.32 In another narration, the Prophet (SAW) stated; Whoever gathered unlawful riches and then gave out in charity, he will have no reward; on the contrary he will have to bear the burden of his evil deed.33 In another similar narration, the Messenger of Allah says; When a servant of Allah earns property in an unlawful manner and then gives it in charity, it will not be accepted by him. There will be no blessing in that he spends and that he leaves behind, but it becomes a provision for the fire of Hell. In reality, Allah does not wipe out evil with evil, but erases evil with good action. Undoubtedly, dirt does not clean dirt34 Official Corruption as Economic Crime under Islamic Law Corruption generally is evil as it constitutes a bane to national economic cum social development and political stability.35 Corruption is a financial crime in Islam that is committed by political office holders or civil servants, private individuals or groups through which the nations resources, privileges and economic order are abused or used for individual benefit.36 Corruption from Islamic perspective includes embezzlement, fraud, bribery and forgery. Request for or acceptance of personal gift and all other forms of gratification by public officers in the performance of their statutory duties and responsibilities are not permissible in Islam. Such practices are prone to influence public officers to act unjustly or contrary to the law. The Prophet (SAW) condemned corrupt practices when on one occasion he questioned his administrator regarding a property which he claimed to have received as a gift. The Prophets position buttressed the religious and moral character of Islamic law and jurisprudence. A good example here is the United States of America which prohibits any forms of corruption and other financial malpractices at national level but with a different standard for her corporate bodies and multinationals in dealing with other nations. It is an undeniable fact that American corporate bodies offer and defend foreign bribery. Their justification for this is captured by Marshall B. Clinard;

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If it is customary in foreign countries to give bribes, then it is also necessary for US Corporation to give bribes when an essential contract is at stake. As they see it, bribes translate into greater business, higher profits, and more jobs for American workers. They maintain that fortunes of big corporations and hundred of millions of dollars in contracts depend on the strong desire of foreign officials to skim off some of the money that passes through their hands the prohibition of bribery has led to a decrease in US exports, as their hands are tied when they have to compete with countries that have no anti-bribery laws.37

The objective of Shariah (maqasid shariah) is to prohibit bribery in whatever form or manner. Thus, acceptance of bribe as a gift does not confer it with the status of halal as it remains haram. The Prophet once said; When we (the Prophet) appoint a person to a position, we take care of his provision. If he takes any thing beyond that, it is an illegal gain.38 Islam prohibits bribery because of its negative consequence and its proliferation in a society leads to corruption and oppression, i.e. unjust decisions are made and just ones blocked, undeserving persons are given chances and deserving ones are passed over, and the spirit of greed permeates the society in place of the spirit of dutifulness.39 Corruption as analysed above is a traditional economic crime. Thus, of what impact does advancement in ICT infrastructure has on the commission of the crime? Private and official corruption perpetuated via electronic means is of no difference from traditional corrupt practices. The only new thing is that ICT infrastructure and technical knowledge are employed by perpetrators in the commission of the crime. Thus, for any meaningful detection, investigation and prosecution, similar measure of ICT appreciation will be required. Detection of online corrupt practices therefore must be accompanied by a similar measure of ICT appreciation. In the light of this, Islamic legal system is therefore expected to embrace an ICT proactive method to check online corrupt practices, fraud and so forth. In the same vein, the Islamic criminal law and procedure will need to be modified to address the peculiarity of electronic evidence and its admissibility. This is necessary because measures to deal with corrupt practices facilitated by ICT infrastructure should be distinct from those used to control ordinary cases of corrupt practices or even other types of economic crimes because of its peculiar characteristics.40

Advance Fee Fraud (AFF) as an Economic Crime in Islam Advance Fee Fraud (AFF) is a worldwide scam which has attracted more attention than any other aspect of economic and financial crimes. AFF as economic crime is prohibited in Islam because it is fundamentally premised on deceit, fraud and unlawful method of acquiring property or income which is contradictory to the objective of shariah (maqasid shariah). Thus, AFF as an economic crime is clearly prohibited in Islam. The basis for its prohibition can be amply justified under relevant Quranic verses and the Sunnah of the Messenger of Allah. Depriving people of their property by deceit is utterly condemned by the Holy Quran as follows; O ye who believe! Eat not up your property among yourselves in vanities; But let there be among you traffic and trade by mutual good will 41

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AFF from Islamic Law perspective is viewed as an act of dishonesty and breach of trust whereby the victim without knowledge of the fraud repose trust in the offender by parting away with his property. On the breach of trust and dishonesty, the Quran provides thus; O ye that believe! Betray not the trust of Allah and the Messenger; nor misappropriate knowingly things entrusted to you.42 The Prophet Muhammad (SAW) proclaimed thus; He who deceives is not of me.43 Thus proceeds from AFF is acquisition of others property by illegal means and the Prophet (SAW) observed; Whoever takes possession of any part of land without having a right to it, shall be as a punishment for it sunk down into the earth on the day of resurrection to the depth of seven earth.44 In view of the above authentic authorities from the Quran and the Sunnah of the Holy Prophet (SAW), acquiring property of another person, be it that of a believer or unbeliever, through fraud, deceit or other illegal means is an offence and punishable with tazir. It is pertinent at this juncture to comment on the classes of potential victims of AFF from the Islamic point of view. In some deserving cases of AFF, the victim may lack the knowledge of the illegality of the unsolicited proposal or the proposal reasonably may have the appearance of legitimate business proposal. Majority of AFF victims are driven into the scam by sheer greed, avarice, and unbridled quest for wealth, having been informed of the illegality involved in the scheme. The question therefore is what is the Islamic ruling on these two classes of victims of the AFF? To start with, a victim of AFF scam who acts honestly and with the bona fide intention of entering into a legitimate transaction with the unsuspecting fraudster cannot be condemned but rather needs to be assisted within available legal parameters and in accordance with the Shariah. However, in the later case where the victim of AFF is aware of the element of fraud or illegality in the proposal put forward to him by the fraudster, such a victim has violated the Islamic injunction which prohibits believers from partaking in committing evil. A better Islamic analogy of this case was given Prof. Sanu Kutub, who likened the attitude of such a victim to the Prophetic tradition that when two believers fight against each and one is killed, the killed and the killer will go hell because the killed one could have done the same to the killer if so fortunate. AFF like many other economic crimes can be committed as a traditional crime and also online; using appropriate ICT infrastructure at the disposal of the offender. The Islamic jurisprudential response to AFF aided by the internet or other ICT infrastructure follows similar trend of other legal systems and jurisdictions by making such crime as a tazir offences and punishable as such. There is the need however to upgrade Islamic substantive law and procedural rules to accommodate the digital nature of the crime. Thus few Islamic law jurisdictions have positively responded to ICT related economic crimes. The UAE recently issued a federal law on combating cyber crime known as UME Cyber-Crime Law No. 2 of 2006.45 Details of the law will soon be examined shortly in the proceeding paragraphs. Other ICT Related Economic Crimes and the Islamic Law Point of View Because of the breath of the electronically perpetrated economic and financial crimes and the depth to which an analysis of each type of ICT related economic crime can plume, the focus here will centre on selected forms of economic crimes facilitated by ICT infrastructure. Cyber Fraud and Identity Theft

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Cyber fraud and identity theft are commonly referred to as Phishing, a term coined to describe the new method by which scams are perpetrated through the internet. Phishing involves the theft of identity of a target organization (the secondary target) for the purpose of stealing the identities of its users or customers (the primary target) without their knowledge or consent. Phishing is done through illegal cloning of a reputable organizations website whereby customers and users are lured into a false sense of security and into disclosing their personal information. The motive for this form of crime is, in almost all cases, for pecuniary purpose. Thus, from the Islamic point of view, phishing is prohibited because it has the element of deceit, fraud and act of dishonesty. Article No. 10 of the United Arab Emirates Cyber Crime laws No. 2 of 2006 has more details on the subject of forgery, internet fraud and phishing (identity theft). It provides thus; anyone convicted of putting his hands on immovable funds or a document to sign for himself or others, by using the internet or any high-tech means in a fraudulent way or by taking a nick name or assuming the identity of other with intent to defraud shall be sentenced to no less than one year and fined no less than Dh 30,000 or both.

The advancement in the Islamic legal system of United Arab Emirates as it relates to information technology law is a reflection of its level of internet connectivity. No doubt, the UAE today is among the most highly internet-connected countries in the Middle East with more than 51 percent of its population online.46 It is hoped that other Islamic jurisdictions will also take a bold step in upgrading their respective laws to accommodate the new technological advancement. Cyber Piracy and Intellectual Property Theft under Islamic Criminal Law Cyber piracy and theft of intellectual property are both economic crimes under Islamic law. The legal basis for criminalizing theft of intellectual property as unanimously agreed upon by contemporary Muslim scholars is that intellectual property constitutes mal as it possesses value to be preserved and protected like any other property.47 Therefore exploiting the economic value and benefits of others intellectual property, brings with it not only moral apprehensive and but also legal liability48 Giving further justification why cyber piracy and theft of intellectual property are prohibited, it is opined that Islam respects both private and public ownership of property. Islam does not sanction economic exploitation and violation against the peoples property rights, whether material or intellectual. Thus, when a person knowingly buys a pirated copy of intellectual work then he is aiding the primary offender whose act of cyber piracy is certainly prohibited in Islam. Commenting on the issue of cyber piracy, and intellectual property theft, the late Sheikh Abd AlAzeez Ibn Baz (RA), pointed out that it is forbidden to make copies of programs if their owners do not permit doing so.49 The above ruling is premised on the following authentic Hadiths; Muslims should abide by their stipulations, A Muslims property is not permitted (to be taken by others) without his consent and Whoever proceeds others in gaining a Halal (lawful) thing will be more entitled to own it ( than others).50

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The above traditions are perhaps applicable to the act of cyber piracy and theft of intellectual property whether the owner of these properties is a Muslim or a non-Muslim (who is not at war with Muslims, for the properties of non-fighting unbelievers are to be protected in the same way as that of Muslims.51 Thus, this position was emphasized by Dr. Mahmoud Akram when he stated that copyright is like money, which no one is permitted to take except through Shariah based contracts.52 This is the case whether the owner of these programs is a Muslim or nonMuslim individual. However, if a non Muslim state engaged in fighting Muslims or Muslim state, then it is permissible to take their property as spoils of war.53 The Islamic point of view on cyber piracy and theft of Intellectual property will only admit an exception in the case of necessity, i.e. where the offender finds it difficult to obtain the original or the price of the program or intellectual work is beyond his reach and the intellectual property in question is required for research or for educational purposes or other beneficial use not luxury. This is permissible in accordance with the Quranic verse that But he who is driven by necessity, neither craving nor transgressing, it is no sin for him. Allah is forgiving, merciful.54 Credit Card Fraud The use of electronic card in commercial transactions and as a means of payment has become ubiquitous with the increasing advancement in ICT. Islamic banks and financial Institutions are not left out as some of them had issued credit cards to numerous customers.55 The use of credit card though has its own benefit but not without associated dangers. It is prone to economic crime. In response to this development, the United Arab Emirates Cyber Crime Law No. 2, 2006, under Article 11 provides that anyone convicted of receiving data of credit card or any other electronic cards by the use of the internet or any high-tech means shall be imprisoned and fined. If the act takes place with intent to use credit cards to get others money or their available services, the convict shall be jailed for not less than one year and fined not less than Dh30,000. Terrorists Financing As Economic Crime Terrorism per se is a serious criminal act that has attracted a renewed global commitment to fight against it. This was sequel to the September 11th, 2001 attacks on the United States of America. Terrorist financing on the other hand is an economic crime which entails the process of diverting proceeds from legal or illegal gains to support terrorist activities. Since the September 11th, 2001 tragic attacks on the United States, terrorism has now been connected with the economic crime of money laundering.56 Because of the level of sophistication assumed by the terrorist groups in their operations, coupled with the resources at their disposal to maintain persistent struggle, the focus has now been on how best to disrupt the funding of terrorist organisations. To cut the fund supply lines to terrorist groups is not an easy task. It must be noted that UK government, from the early 1980s till recently, has achieved some degree of success in disrupting the funding of the terrorist organisations in Northern Ireland. In response to the need to curtail the funding of global terrorism, the United Nations International convention for the suppression of financing terrorism was opened for signature on 10th January 2000.57 Aside from the global response to terrorists funding as a serious economic crime, many countries have taken legal and regulatory measures

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to detect and reduce the financial flows to terrorists organizations. Nigeria does this by inclusion of Section 15(1) of the EFCC Act, 2004 which provides thus; A person who wilfully provides or collects by any means directly or indirectly, any money from any other person with intent that the money shall be used or is in the knowledge that the money shall be used for any act of terrorism, commits an offence under this Act and is liable on conviction to imprisonment for life58

In view of the above, what is the Islamic position on funding of terrorism? Financing terrorism is prohibited in Islam regardless of the origin of the fund. Islam laid down cardinal rules on how best to acquire and to dispose of property. Therefore, spending of money must be on what is lawful e.g. spending in fulfilment of Allahs right through payment of zakat to benefit the poor ones, and charities to the needy.59 Thus, coming down to Malaysia, the Anti-Money laundering Act 2001 (AMLA 2001) as amended in 2003 by the Anti-Money Laundering (Amendment) Act contains relevant provisions on terrorist financing. Relevant to this discourse is the introduction of a new Part 6A whose purpose is to suppress any form of terrorism financing offences, freezing, seizure and forfeiture of terrorism property. A corresponding amendment was also made to the Malaysian Penal Code by introducing a new Chapter 6A Offences Relating to Terrorism.60 Islam abhors financing of terrorism regardless of it ideological disposition and orientation. Islamic banks and financial institutions must therefore be seen to demonstrate their commitment in fighting money laundering. They can do this by reporting any suspicious transaction involving their customers, which might have been designed to finance terrorist activities. Aspersion has been continuously cast on Islam as a religion which not only tolerates terrorism but also encourages it. Thus Islamic banks and financial institutions are therefore not spared of this unfortunate stigmatization for allegedly lazing the anti money laundering rules for the terrorists to receive operational funds from those who finance them. The plausibility of the allegation is perhaps in doubt. However, Islamic banks and financial institutions must cooperate and ensure that they comply with the national and international money laundering regulations.61 Terrorist financing as a traditional economic crime could also be perpetrated online. Of course, modern terrorist are now adopting sophisticated techniques in running their activities. In response to the recent phenomenon of cyber terrorism and financing, law enforcement agencies of many advanced legal systems such as US, UK, Australia; at every level have expanded technological and intelligence gathering initiatives in order to support new tactical and technological strategies in fighting terrorist related crimes. The UN and other intergovernmental organisations have also been concerned about criminal funding of terror.62 In 2000, the UK government passed her Terrorism Act 2000 whose scope covers the offence of terrorist financing. In a similar vein, Art. No. 2 United Arab Emirates Cyber Crimes Law No. 2 of 2006 provides that; Anyone convicted of setting up a website or of publishing information for a terrorist group under fake names with intent to facilitate contacts with the leadership or to promote their ideologies and finance their activities shall be sentenced to more than five years in jail. In concluding this part, it is submitted that though there are close relationships between

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financial crime and terrorism, there is a great need to exercise caution in combating any suspicious terrorist financing.

Control and Prevention of Money Laundering and Other Illicit Financial Crimes under Islamic Law Money laundering control and prevention is a matter of national and international concern. Over the years, legal framework has evolved in many national and international jurisdictions in response to problems associated with money laundering and other illicit economic crimes activities. It is instructive to emphasise that almost all nations of the world have enacted laws to regulate the offence of money laundering. At the international plane, activities of institutions like Financial Action Task Force (FATF) and European Union in monitoring money laundering are ubiquitous. Since money laundering is a global problem, international relation and cooperation in combating it has been very impressive. Despite the fact that no legal system overtly supports money laundering activities as economic crime, approaches to monitoring, controlling and preventing such crime differ among jurisdictions. The fundamental objective of Islamic economy is to enthrone a just and orderly society. Since it is the duty of every nation to ensure that its economy is devoid of illegal or criminal activities and other forms of malpractices, in this context Islamic state must also enact relevant laws to meet the contemporary challenges posed by money laundering operations. Islamic authorities and Islamic financial institutions are expected to strive towards eliminating money laundering operations in line with the objectives of sharia (maqasid shariah) and Islamic moral code. The Islamic concept of Al- Hisbah offers a framework for social morality and ethics which may also be relevant to monitor money laundering activities. Al-Hisbah therefore is similar to the conventional whistle-blower who has the duty of observing and reporting social vices to the authority concerned. Therefore Al-Hisbah institution is one of the Islamic methods of controlling socio-economic vices. Accordingly, the institution is one of the Islamic methods of controlling socio-economic values. The legality of this institution can be justified in view of Quranic command which provides; al-anur bil maruf wal al-nabu an al munkar (that is to ordain good and forbid evil). The role of Muhtasib, is for the maintenance of public morality and upholding economic ethics.63 Relating this role to the duties of Islamic banks and financial institutions, means the concept of Al-Hisbah requires individual volunteering to disclose information that they consider important without being asked for it and without a charge being first framed.64 Al-Hisbah witness is a witness who volunteers his evidence without being solicited for or without it being preceded by a charge.65 It is in light of this that staff of Islamic banks are expected to report any suspicious transactions or deposits to the appropriate regulatory authorities. It is expected that all banking and financial institutions are to be guided by Anti-Money Laundering law. However, staff of Islamic banks needs to consider such duty as legal and religious duties by reporting suspicious transactions for possible investigation. The duty to disclose and report suspicious activities are well justified in Islam on one of the traditions of the Prophet (SAW) that; Meetings are confidential except three: those for the

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purpose of shedding blood unlawfully, or for committing fornication or for acquiring property unjustly.66 In another tradition, Ibn Masud said, We had been prohibited from spying on another and finding fault with them. But we can take to task only and only if the sin is overt.67 The above Hadiths can be regarded as stating the exceptions to the duty of confidentiality which a bank owns its customer and the limit of individual right of privacy. Against the above backdrop, it is pertinent to emphasise the need for Islamic nation states to enact comprehensive money laundering laws and regulations that will reflect the Islamic perspective of the phenomenon as attempted above. Islamic jurisdictions will also need to collaborate and cooperate with other legal systems and international institutions in fighting money laundering among other economic crimes. The United Arab Emirates was among the few Islamic states that have put in place anti-money laundering law. The Council of Minister of the United Arab Emirates recently approved a law known as United Arab Emirates Anti-Money Laundering Law.68 The United Arab Emirates Anti-Money Laundering law Article 2 makes the laundering of property or money derived from unlawful means a criminal offence. Article 1 of the same law established a National Anti-Money Laundering Committee under the chairmanship of governor of the UAE Central Bank. Article 7 of the law established the Financial Intelligence Unit (FIU) to deal with money laundering and suspicious transaction cases. The law punishes whoever is guilty of money laundering offences as set out in Article 2 of the law with imprisonment for a term not exceeding seven years or by fine not exceeding AED 300,000 (UAE Dirhams Three Hundred Thousand), or by both penalties in addition to confiscation of proceeds, or the equivalent thereof, if such proceeds were wholly or partially converted into, or mixed with other property derived from lawful sources.69 It is important to note here that the common money laundering monitoring and regulatory provisions with regards to record keeping, customer identification (Know Your Customer i.e. KYC), currency reporting, freezing and seizure orders and so on are not sufficiently provided for in the UAE Anti-Money Laundering Law. The above situation as it were, portends a great danger in future with regard to money laundering regulation in the emirates. It constitutes loopholes and gold mines for ambitious money launderers to exploit. It is common for money launderers to seek for jurisdictions with weak money laundering regulatory regime as safe haven. Money laundering activities in the UAE is comparatively at low ebb. The emirates are not in the FATF list of NCCTs. However, lack of sufficient money laundering regulatory framework in UAE may end up being an incentive for money launderers to exploit in the jurisdiction. The above analysis represents Islamic Law perspective of money laundering. It is instructive also to examine the phenomenon of cyber laundering from the Islamic point of view. Cyber laundering is nothing more than electronic means of perpetuating traditional economic crime of money laundering. The development of new electronic payment tools and transfer of money open a better avenue to money launderers to circumvent the various statutory rules and regulatory framework to check and control money laundering operations. Islamic legal system as a dynamic system, permits formulation of rules and adoption of other national and international regulatory framework provided that these are not in conflict with the Shariah.70

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Interestingly Article 19 of the United Arab Emirates Anti-Money Laundering Law proscribes and punishes cyber laundering by stating that, Anyone convicted of transferring dirt money or concealing their sources, or transferring illegal properties via the use of internet or other cyber means, shall be sentenced to no more than seven years and a fine of no less than Dh 30,000 and up to Dh 200,000. Conclusion This paper is devoted to the Islamic law perspective on economic and financial crimes and other ICT related offences. It analysed the Islamic conceptual framework of economic and financial crimes as a contemporary criminal phenomenon. It is conceded that the phrase economic and financial crime has not been widely used by Islamic scholars however; these classes of crimes are proscribed by Islamic law. The Islamic typology of the economic and financial crimes is more embracing due to the moral, economic and religious character of Islamic law. The effect of globalisation and advancement in ICT has impacted both negatively and positively on the socioeconomic, cultural and political development of all nations of the world. The negative fallout of this trend is very obvious as many nations, including Islamic countries and Islamic states, suffer detrimentally as a result of the consequences of economic and financial crimes. As necessary remedial measures, the need to over haul the existing laws and regulatory framework to combat the phenomenon was conversed in this paper. Efforts made in that direction by Saudi Arabia and United Arab Emirate were briefly considered. In a similar vein, the development of antifinancial crimes policies, legislations and regulations especially in the area of money laundering, AFF and other ICT related offences require Islamic countries and Islamic states to reform and overhaul their respective legal systems. Since economic and financial crime has assumed international character, this paper canvassed the need for cooperation and uniformity of the legal framework to enables an Islamic approach to be consistent with and to be harmonised with the international regulations.

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REFERENCES 1. Faisal Atbani, The Prevention of Financial Crime within an Islamic Legal Framework, Economic Affairs, vol. 27, Issue 1 (March, 2007) : 27. 2. Abdul Qadir Oudah Shaheed, Criminal Law of Islam, Vol. 1, (Karachi: International Islamic Publishers Limited, 1997), 9-10. 3. Faisal Atbani, n 1, 27. 4. Ibid. 5. Matthew lippman, Sean McConville, and Mordechai Terushalmi, Islamic Criminal Law and Procedures: An Introduction, (London: Preaeger, 1988), 37. 6. Abdul Qadir Oudah Shaheed, n 2, 72. 7. See Faisal Atbani, n 1, 27. Quoting M Alfair Uzabady (2.1414 AC) Alqamous Almuheet (Alresalah Press, Beirut, 1994), 1405. 8. Ibid, at 28. See also Almawsooah Allfikhlah; Jurisprudence Encyclopaedia; section Jinayah. Available at www.awkaf.net/mousooah_index.html. See 9. Rudd Peters, Islamic Criminal in Nigeria, (Ibadan: Spectrum Books Limited, 2003), 1. 10. Dr Mohammad Shabbir, Outline of Criminal Law and Justice In Islam, (Kuala Lumpur: International Law Book Services, 2002),12-16. See also Micheal T Mola, LLB Criminal Law Textbook, 5th Edition (London: HLT Publications, 5the Edition, 1991), 12-14. 11. Ibid 12. Abdul Rahman I.Doi, Shariah: The Islamic law, (Kuala Lumpur: A.S Noordeen, 1984), 398 13. Narrated by Ahmad al-Tibrani 14. Ibn Taymiyyah, Al-Siyasas al-Shariiya (Cairo: 1952), p 19 15. Abdul Rahman I. Doi, n, 18, 396. 16. Ibid 17. See Abdur Rahman I. Doi, n 18, 397.

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18. Ibid 19. See Surah Al-Maidah , 5 v 42 20. See Ghaouti Benmelha, Tazir Crimes in the Islamic Criminal Justice System, edited by M. Cherif Bassiouni (London: Ocean Publication, INC 1982), 219. 21. Faisal Atbani, n.i, 30 22. Samah Al-Agha, Money Laundering from Islamic Perspective Journal of Money Laundering Control (JMLC) Vol. 10, No. 4, 2007, p 406. 23. Commonwealth Secretarial, Commonwealth Model Law for the Prohibition of Money Laundering (1996). Available at www.imolin.org/pdf/imolin/comsecml.pdf viewed on 4th November 2007. 24. See Saleh, A. Saleh. M.B.A (2006), Money Laundering in Positive Law, Islamic Version, available at www.saaid.net/book/open.php?cat=968book=1813 accessed on 4th November 2007 25. Ibid,406 26. Abdur Rahman I. Doi, n. 18, 373. 27. Ibid 28. Mahmood Mohamed Sanusi, Money Laundering with Particular Reference to the Banking Deposit Transactions: An Islamic Perspective, (2007) 4 SHLR Oct-Dec, 2007. 29. Certified Islamic Finance Professional Part 1, Study Material, Applied Shariah in Financial Transaction, International Centre for Education in Islamic Finance (INCEIF), 2006, Topic 17, page 426 30. Mohmood Mohamed Sanusi, n. 28. 31. Ibid 32. (Ahmed, 1/387) 33. Ibn Habann 3368 34. Ahmad, Mishkat, No, 301 35. See Justice Mustapha Akanbi, former Chairman, Nigerian Anti-Corruption Commission, The Fight Against Corruption in Governance (Good Urban Governance) in Law, Human Rights and the Administration of Justice in Nigeria, Essay in Honour of Hon. Justice Muhammad Llawal Uwais, Chief Justice of Nigeria, Edited by M.T. Ladan, published by the Department of Public law, faculty f law, Ahmad Bello University, Zaria- Nigeria, Dec, 2001, - 315) 36. Faisal,n.1 p 30 37. Marshall B. Clinard, Corporate Corruption: The Abuse of Power, (New York,: Preager, (1990), p 126 38. Reported by Inb Dawud. See also Ustaz Muhammad Uthman El-Muhammady, Common Religious Values in Strengthening Ethics in Fighting Corruption. A presentation at World Ethics & Transparency Forum, Towards Greater transparency for Global Competitiveness held on 12th -13th February, 2007 at Berjaya Times Square Hotel & Convention Centre, Kuala Lumpur, jointly organised by Asian Strategy & Leadership Institute (ASLI) and Transparency International Malaysia. This research is grateful to the College of Postgraduate Studies (CPS), International Islamic University Malaysia (IIUM) who sponsored the research and few other postgraduate students to the Conference. 39. Ibid 40. Joseph T. Klells, (New Jersey: John Kliley & Sons, Inc, 2004), 267 on Computer Generated Fraud Analysis (in Corporate Fraud)

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41. Surah Al-Nisa, Quran 4 v 29 42. Surah Al-Anfal, Quran 8 43. Sahih Muslim : An Islamic Legal Texts, book 1, fundamentals/ hadith sunnah/muslim/001.smt.html 44. Ibid 45. See United Arab Emirates open Net Initiateive.htm. viewed on 2oth November,2007 46. The UAE Year Book for 2007 states that there are more than 578,000 internet subscribers in the country and the September 2006 figures on internet penetration place the number of internet users at 1-40 million. For details see the following: i. United Arab Emirates OpenNet Initiative, ii. UAE Year Book 2007: Infrastructure at http://www.uaeineract.com/uaeint_misc/pdf.2007/English_2007/cybb.pdf., iii. Internet World State Middle East Internet Usage and Population Statistics (citing International Telecommunication Union Date), http://www.internetworldstats.com 47. Ida Madieha Abdul Ghani Azmi, Intellectual Property Rights, Globalization and Islam: The Malaysian Perspective; (2004) 12 IIUM LJ 84 48. Ibid 49. Islam online.net, Copying CDs & Computer programmes that have Copyrights 50. Ibid 51. Ibid 52. Ibid 53. Ibid 54. Surah Al Baqarah Quran 2 v. 173. 55. Bank Islam, A Malaysian Islamic Bank was the first to launch Islamic Credit Card in Asia, Bank Islam Malaysia bhd (BIMB) on Tuesday, July 2007 launched at credit card names Bank Islam Card (BIC) 56. Friedrich Schneider, Macroeconomics: The Financial Flows of Islamic Terrorism and Barry A.K. Rider, Laws the War on Terrorism Crime and the Offshore centre: The New Perspective? both in Global Financial Crime: Terrorism, Money Laundering and Offshore Centers, edited by Donato Masciandaro, England: Ashgate Publishing Limited, 2004, p 97 57. Convention 54/1009, 19 Dec 1999, before the 11 September 2001, the only signatories were the IK, Botswana, Sri Lanka and Usbekistan 58. Section .15(1) EFCC 2004. 59. Dr. Yusuf Al-Qardawi, Fiqh az-zakat, A Comparative Study: The Rules, Regulations and Philosophy of Zakat IN the light of the Quran and Sunna, Translated by Dr. Monzer, Kahf, (London: Dar Al-Taqwa. Limited, 1999), 16 60. Assoc. Prof. Dr. Norhashimah Mohd Yassin, Banks and Compliance with Reference to AMLA 2001, Monthly Bulletin to INCEIF (International Centre for Education in Islamic Finance, Vol. 1 No. 5, November 2006), p 8I 61. Ibid 62. That the International Convention for the suppression of Financing Terrorism (Convention 84/109 Dec 1999) was opened for signature at the UN in New York on 10th January 2000 63. Mohmood Mohamed Sanusi, n. 28. 64. Ibid 65. Ibid

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66. Abu Dawud, No. 4851 67. Abu Daud, Riyad us- Salikeen No. 1572 68. http://www.un.int/uae/1e.htm 69. Article 13. See Articles 14, 15, 16, 18 and 19 for punishments for other related money laundering offences under the UAE Anti-Money Laundering Law 70. Article No. 19 of the United Arab Emirates Cyber Crime Law No. 2 of 2006.