The Relevance of Maqasid al Shari'ah to Anti-Money Laundering and Terrorism Financing

The Relevance of Maqasid al Shari'ah to Anti-Money Laundering and Terrorism Financing

Maruf Adeniyi Nasir (Osun State University, Nigeria)
DOI: 10.4018/978-1-7998-0218-1.ch010

Abstract

The modern financial system has continuously been traumatised by money laundering and terrorism financing. This is partly because it is a concept that revolves around the complex relationship between money and crime. The challenges posed by these menaces have become a phenomenon that the world has ceaselessly looked for means to address. Yet launderers and terrorists continue to perfect methods of perpetuating their illegal activities, while the havoc created by the menace of these crimes are enormous and remains unquantifiable in term of the actual estimate. Interestingly, Maqasid al Shari'ah has caught the attention of several Muslim scholars as a useful tool that can resolve several contemporary issues. Consequently, examining the relevance of Maqasid al Shari'ah which is the basis of Islamic Finance on money laundering and terrorist financing (AML/CFT) is desirable. The focus of this chapter, therefore, is to examine the relevance of Maqasid al Shari'ah in the fight against the menace of money laundering and terrorism financing
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Introduction

Currently, the global financial system has been consistently enveloped by two devastating challenges. These challenges are contemporary in nature but are insulin with negative effects that are overwhelming. Unfortunately, they appear to have become extremely more difficult to curtail. Yet the havoc that they are causing is very difficult to quantify in term of material, economic and loss of human resources. This is probably because they have a direct relationship with the financial system and have grown over time to become more sophisticated. These challenges are financial crimes known as the laundering of money and terrorist financing.

Although, it has been argued that these crimes have always been part of human history, but many scholars still hold the view that they are contemporary problems. The basis for this line of thought is premised on the styles, pattern and mode of operation that is associated with these crimes. This is likely to become more apparent if the integration and effective use of the financial institutions that currently characterised their modus operandi is considered. However, the fact that they are directly related to finance and financial system are not contentious. What becomes a grave concern is the fact that no economic system is immune to these cancerous problems that are currently spreading like fire.

Moreover, there is no territorial limitation or barrier. Illicit funds are moved across borders with a different system, tactics and devices. As a result of this, a multi-dimensional problem is being created globally, particularly in this era of technological advancement. Consequently, the multifaceted challenges posed by these menaces have grown to be a source of concern globally. Therefore, the need to curb them becomes necessary and urgent due to grievous negative effects that are embedded therein. Accordingly, combating the illicit flow of proceeding of crime and the problem of terrorist financing become a global issue over time. And these problems are required to be addressed. This is because their effect is believed to be on all and sundry and no aspect of economic development is spared by these menaces.

Because these two concepts revolve around the inextricable relationship between money and crime, they, therefore, become more technical and general in nature. Sadly enough, the problem has continuously traumatised the modern financial system. Invariably, the challenges posed by these menaces have become a phenomenon that the world has ceaselessly looking for means to address. Yet, launderers and terrorists have continued to perfect methods of perpetuating their illegal activities. Incidentally, the havoc that is attributed as consequential effects of these crimes continued to be on the increase and remain unquantifiable in term of the actual estimate.

Again, the world financial market appears to have transcended conventional finance. The reason that could be adduced to this is that Islamic finance is not only on the increase, but it is fast becoming the fastest growing economy that is accepted in many jurisdictions. This becomes more noticeable after the global financial crisis within 1999 and 2001 (Aldohni, 2011). Interestingly, Maqasid al Shari’ah (the objective of Shari’ah) has caught the attention of several Muslim scholars as a useful tool that can resolve several contemporary issues.[1] It is an idea that gives room for the ever-elastic process of ijtihad to apply and resolve problems that are facing human beings, particularly in contemporary society. Thus, the mujtahid through the mechanism of Maqasid al Shari’ah has been proffering solution to many challenges that are not apparently addressed by texts or major sources of Islamic law. (Nasir, 2016, 2017, 2018; Yazid, 2017)

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