UPDATE: An Introduction to Sharīʿah Law in South East Asian (ASEAN) – Business and Religion

By Jeong Chun Phuoc

Jeong Chun Phuoc holds a Master of Laws (“LLM”) degree from the National University of Singapore, Singapore and Bachelor of Laws (Hons.) (“LLB”) from IIUM University Malaysia. He focused on comparative Sharīʿah and Civil law studies. He is actively advocating “Big Compliance and Big Law” as part of his wider “Lawnomics” framework for a better business world with relationship to Sharīʿah Impact Factor on business. Among his pioneering scholarship was the publication of his books including Personal Data Protection: Cases and Commentary (CLJ publication); Revenue Law in Singapore and Malaysia (3d ed. LexisNexis); Whistleblower Protection Law: Cases and Commentary (Lexis Nexis); Patent Law in Malaysia (2d ed. Sweet & Maxwell); Environmental Law and its revision under Halsbury’s Laws of Malaysia/HLM (Lexis Nexis). All his publications include a comparative analysis on Sharīʿah compliance and regulatory dimension.

He has given lectures at seminars and workshops for Bar Council (Majlis Peguam Malaysia) and Non-profit Organisations (NGOs). He currently lectures, trains, and teaches Business Law & Ethics, International Business Law, and Intellectual Property Law for Global Entrepreneurship, Legal Research Methodology at Graduate School of Management and Sciences, MSU University in Kuala Lumpur, Malaysia. He also occasionally conducts special ‘Beyond 360 Compliance & Regulatory’ workshops for SME, business networks strategic Big Compliance paradigm for a Better Business World (BBW) with reference to Sharīʿah Impact Factor on entrepreneurship.

He has published numerous several books and articles on personal data protection, occupational safety and health, whistleblower protection, environmental law, intellectual property, revenue law including Syariah Law in mainstream newspapers, and online forums focusing on wider ethical business and sustainable development within “Big Compliance” framework with special comparative reference to Sharīʿah Impact Factor in ASEAN, Asia-Pacific and Mid-East regions.

Published September/October 2020

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1. Introductory Overview

This article presents a general overview of Sharīʿah law as practiced and observed in the South East Asian[1] (ASEAN) region. In ASEAN, there are 10 member countries that seek to allign economic advantages with the newly established ASEAN Economic Community (‘AEC’). The AEC economic blueprint includes the promotion of Shariah,[2] focusing on initiatives for expanding the Halal Industry 4.0 [3] in line with Industrial Revolution 4.0 imperatives impacting Europe and the US.[4] The view of Sharīʿah introduced in this article is not exhaustive but represents a practical perspective as to how it is applied in ASEAN countries. As an exploratory article, it looks at certain Sharīʿah precepts within local communities and provides select observations on contemporary views of Shariah. It does not go into certain specifics, but suffice to say, it will present a general worldview that is sufficiently practical for an outside audience – academic or business – to achieve an adequate level of understanding and appreciation of Sharīʿah law in action within the communal and business dimensions.

Shariah[5], also spelled Sharia, is the fundamental religious concept of Islam, namely, its law. The religious law of Islam is seen as the expression of God’s command for Muslims and, in application, constitutes a system of duties that are incumbent upon all Muslims by virtue of their religious beliefs. Known as Shariah (literally, “the path leading to the watering place”), the law represents a divinely ordained path of conduct that guides Muslims toward a practical expression of religious conviction in this world and the goal of divine favour in the world to come. Sharīʿah means the ‘way/path’ – the way revealed to Prophet Muhammad (as the last prophet). The Muslim holy book, the Quran, states, “Then We put thee on the (right) Way of Religion: so follow thou that (Way), and follow not the desires of those who know not.”[Al-Quran, Surah Al-Jathiyah 45:18].[6] It is defined as "Islamic canonical law based on the teachings of the Koran and the traditions of the Prophet (Hadith and Sunna), prescribing both religious and secular duties and sometimes retributive penalties for lawbreaking."[7] Sharīʿah refers to God 's law in its quality as divine. Loosely used, it can indicate Islam, God 's religion. It refers to God 's law as it is with him or with his Prophet, or as it is contained (potentially) within the corpus of revelation.[8] In Islam, and under Sharīʿah law, God refers to Allah.

2. Sharīʿah Law in ASEAN Region

Sharīʿah refers to the moral codes and laws exemplified in the Quran and supported by traditions (hadith) as practiced by the prophet Muhammad as the last messenger of God. The Quran is the word of God (kalamullah) i.e. Allah. It remains the most revered book of all books for Muslims. Because Islam is not merely a religion but a "Way of Life," it encompasses all aspects of human perspectives, including criminal law (hudud), civil law, commercial law, economic activities (mu'amalah), etc. In order to carry out the right way of life, Muslims are mandated to follow the teachings, regulations and moral principles of Sharīʿah as ordained in the Quran and hadith sources. Generally, in the ASEAN region, Sharīʿah is observed at the State level, and federal law generally gives legal cognizance to Sharīʿah as practiced in the Muslim-based local communities, especially in ASEAN’s sociopolitical and business landscape.

In the mid-eighth century, the emergence of new schools of jurisprudence/thoughts (mazhab) developed Sharīʿah jurisprudence in line with new development in business and community issues. Key scholars are Abū Hanīfah (d.767), Mālik ibn Anas (d.795), Muhammad ibn Idrīs al-Shāfiʿī (d. 820), and Ahmad ibn Hanbal (d. 855). Abū Hanīfah founded the Hanafi school of thought (‘Mazhab Hanafi’), Mālik ibn Anas the Maliki school of thought (‘Mazhab Maliki’), Muhammad ibn Idrīs al-Shāfiʿī the Shafii school of thought (‘Mazhab Shafii’), and lastly Ahmad ibn Hanbal’s the Hanbali school of thought (‘Mazhab Hanbali’), respectively. As “God's eternal and immutable will for humanity,” Sharīʿah and Muhammad's example (sunnah), forms the cornerstone of worldly guidance for all Muslims. See Oxford Islamic Studies Online, Shariah (last visited August, 2020), for more information.

3. Sharīʿah View of the World

The implementation of Sharīʿah seeks to achieve five objectives widely known as Maqasid al-Shari‘ah (Goals of Shariah).[9] The overarching five objectives advocate for an integrated approach in social harmony and overarching public interests (maslaħah) to uphold the administration and establishment of justice (al ‘Adl’), ethics education and morality (al-Akhlaq’) in public and private domains, prevention of hardship on individuals and community and elimination of oppression.

In many practices, Sharīʿah law seeks to minimize difficulties faced by Muslims in daily affairs (personal or business) subject to accepted Sharīʿah practices and norms i.e. Sunni requirements. This is based on the principle extracted from holy book Al-Quran: “Allah intends every facility for you; He does not want to put to difficulties (Al Quran, Surah Al-Baqarah: 185).[10]

Consensus by Muslim jurists and scholars (ijmak) states that the Maqasid al-Shari‘ah[11] are considered to be the primary motivation in the implementation of Sharīʿah as a way of life. In ASEAN as a whole, Maqasid al-Shari‘ah is the basis for almost all policies and decisions made within the commercial sphere (Mua amalat)[12]. These five objectives advocated by Abû Ishâq ash-Shâtibî (died 790) in Al-Mwafaqat fi Usul al-Ahkam in the science of Usul al-Fiqh. The Maqasid al-Shari‘ah are:

In response to the COVID-19 global pandemic, the federal government of Malaysia has declared Restricted Movement Order 2020[18] to tackle the spread of COVID-19 in Malaysia. This order, made pursuant to Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967, enforced restriction on freedom of movement on every citizen –almost everyone- in the country commencing 18 March 2020 until 31 March 2020.

In response, States Religious bodies have given support to the Restricted Movement Order 2020[19] in Malaysia. Muslims nation-wide are now not permitted to carry out congregational prayers at the mosques. Religious activities involving public movement and mass gatherings are now prohibited. All religious activities in mosques and surau will be suspended in compliance with the 15 March 2020 decision made by the National Special Muzakarah Council's decision[20]. This is to protect the interest of the public as a whole in a multi-racial society such as Malaysia. This is evident in ASEAN member countries where there exists a Muslim population.

4. Sharīʿah as a Personal Religion in ASEAN

ASEAN comprises 10 countries, namely Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam. Due to their multi-racial social backgrounds coupled with Islam’s historical presence in local communities, a dual-track legal system is practiced in countries such as Malaysia, Singapore, Indonesia, etc.

Malaysia observed a dual-track legal system comprising civil courts and Sharīʿah Courts (mahkamah syariah). Sharīʿah Courts have jurisdiction over Muslim communities and Islamic affairs, and Muslims may be charged and tried on religious, family and minor Sharīʿah criminal offences/charges only. On the other hand, non-Muslims are excluded from Sharīʿah Courts because they come under the jurisdiction of civil courts. As a general rule, Sunni[21] is the official sect of Islam in ASEAN countries, representing mainstream Islam. In Malaysia, the Shia sect is considered deviant.

The ASEAN Charter (which entered into force on 15 December 2008) serves as a firm foundation in creating the ASEAN Community by providing a legal status and institutional framework for ASEAN. The ASEAN Charter recognized national law – including Sharīʿah law – as practiced in all member States. Similar to the UK and the US jurisdictions (as two examples of major countries having significant Muslims community presence), Sharīʿah law in the ASEAN region is observed as personal law by Muslim populations; Malaysia and Singapore as notable examples for that matter. For instance, Shariah offences committed by Muslims in the capital of Malaysia i.e. Kuala Lumpur follows the provisions of the Syariah Criminal Offences (Federal Territories) Act 1997( incorporating latest amendment - P.U.(A) 251/2002).[22] Likewise if the offences is committed by a muslim in the State of Selangor, then the Selangor’s Enactment No. 9 Of 1995 Syariah Criminal Offences (Selangor) Enactment 1995 applies.

5. An Inclusive Religion in Multi-Ethics ASEAN

Sharīʿah law recognizes the rights and obligations of members of other religions, seeks to be considered as inclusive, and advocates pluralism – so long as it does not contradict the teachings and precepts of Islam/Sharīʿah law. As a whole, the ASEAN 10 legal structure comprises both civil and common law, as well as Sharīʿah law as personal law within the family law domain at the State level as permitted by Federal law. Matters under personal law are inheritance, marriage and divorce, and morality (missing Friday prayers, or smoking, drinking or eating in the fasting month of Ramadan, etc).

In Malaysia, one issue that has seen much debate in the Family Court are apostasy cases (and cases having Shariah-Civil and religion-related conversion cases) such as Teoh Eng Huat v. Kadhi, Pasir Mas & Anor [1990] 1 CLJ 277 (Rep); [1990] 2 CLJ 11; [1990] 2 MLJ 300, Dalip Kaur v. Pegawai Polis Daerah, Bukit Mertajam & Anor [1991] 1 CLJ 77 (Rep); [1991] 3 CLJ 2768; [1992] 1 MLJ 1, Mohamaed Habibullah Mahmood v Faridah Dato Talib [1992] 2 MLJ 793, Majlis Agama Islam Negeri Sembilan v. Hun Mun Seng [1993] 1 CLJ 179; [1991] 3 MLJ 174, Tan Sung Mooi (f) v Too Miew Kim (1994) 2 AMR 35, 1799, Md Hakim Lee v. Majlis Agama Islam Wilayah Persekutuan [1997] 4 CLJ Supp 419; [1998] 1 MLJ 681, Soon Singh v. Pertubuhan Kebajikan Islam Malaysia (PERKIM) Kedah [1999] 1 MLJ 489, Shamala Sathiyaseelan v Dr Jeyaganesh C Mogarajah & Anor (2004) 2 CLJ 416, Lina Joy v Majlis Agama Islam Wilayah Persekutuan & 2 Ors 2005 [CA], Subashini a/p Rajasingam v Saravanan a/l Thangathoray 2007 [FC],[23] the Siti Fatimah Tan Abdullah case,[24] and others. These cases have shown the perceived tension between Sharīʿah and Civil law provisions. For example, the perceived conflict as reflected in Section 51, Law Reform (Marriage and Divorce) Act 1976 and Guardianship of Infants Act 1961, etc.

Another area of concern within the Shariah law is the interest and well-being of Muslim children born out of wedlock from the perspective of the Births and Deaths Registration Act 1957. This has attracted much legal and constitutional debate from both sides of the divide.[25]

In one reported case, a child born out of wedlock in the State of Johore could not use his father’s name on the child’s birth certificate. In this case, the parents living in the State of Johore had applied to the National Registration Department (JPN) to register the father’s name on the birth certificate of their child under Section 13 of the Malaysian Births and Deaths Registration Act 1957 (‘BDRA’). Their child was born less than six months after the parents’ marriage and this is deemed illegitimate under Shariah. The Court of Appeal granted them a favourable decision.

The Malaysian National Registration Department (NRD) then filed an appeal to the Federal Court. The Federal Court in a majority 4-3 decision overruled the Court of Appeal and ruled that a Muslim child in the State of Johore born out of wedlock is prohibited from bearing his father's name.[26] The Federal Court‘s seven-member bench allowed the appeal initiated by the Malaysian National Registration Department (NRD) to set aside the Court of Appeal ‘s decision. In 2017, the Court of Appeal had held that a Muslim illegitimate child could bear his father’s name instead of using “bin Abdullah.” “The name of the first respondent (the child) without ‘bin Abdullah’ shall so remain,” it was held.

The majority decision by the Federal Court decision held that section 13A of the Malaysian Births and Deaths Registration Act 1957 (‘BDRA’) does not apply to the registration of births of Malay Muslim children on the basis that Malays do not carry any surnames. Section 13A of the same Act did not apply to the Malay naming system and did not allow the children to be named with the personal name of a person acknowledged to be the father of the children. The Court further held that the NRD has no power to impose the fatwa (‘religious edict’) of the National Fatwa Committee on the child because there was no fatwa on how to name an illegitimate child gazetted in Johor.

The Federal Court’s majority decision on the “bin Abdullah” case[27] has caused mixed concern. In this case, the Federal Court ordered for the removal of the term “bin Abdullah” from a Johor-born Muslim child’s name from his birth certificate. The court also disallowed the father’s name to be a part of the child’s name.

The minority decision in this case is worthy of consideration on this issue [28]. Justice Wong, in his dissent noted that the Johor child’s illegitimate status was not in dispute under the Shariah courts’ exclusive jurisdiction. He however pointed out that the Court of Appeal had noted that the Johor case revolved around the administration of civil law by civil authority and not the administration of Islamic law by a religious authority. He was also of the view that the Court of Appeal’s previous unanimous ruling was correct in that the Malaysian National Record Department (‘NRD’) is not bound by a fatwa (‘a religious opinion’) issued by a religious body because the NRD’s jurisdiction under the Malaysian Births and Deaths Registration Act 1957 (‘BDRA’) is a civil one and it is limited to determining if the Johor child’s parent had satisfied Section 13A(2) conditions for his name to be stated to the child’s name. Wong also agreed with the Court of Appeal that a fatwa (‘religious edict’) by a religious body has no legal effect unless so adopted as Federal law by the Malaysian Parliament.

Critics claimed that this decision will not reduce perceived social stigmatisation of Muslim children born out of wedlock in Malaysia.

6. Administration of Islamic Affairs

Administration of Muslim/Islamic matters in ASEAN comes under the administration of the Muslim Law. In almost all ASEAN countries, Shariah is recognized and observed as personal law by civil law and applies to personal matters of parties professing the faith of Islam. This includes marriage (nikah), divorce (talaq), maintenance (nafkah), division of matrimonial assets/property on divorce (harta sepencarian), custody of children (hadhanah), etc.

In Singapore, for example, the Administration of Muslim Law Act (Chapter 3) (Original Enactment: Act 27 Of 1966- revised edition 2009 (AMLA) (effective 1968)) defines and regulates powers and jurisdiction of three main Islamic entities, such as the Islamic Religious Council of Singapore (MUIS), Sharīʿah Court (Mahkamah Syariah) and Registry of Muslim Marriages. Muslim marriages are specifically regulated by the Islamic Family Law and Administration of Muslim Law. In Singapore, the Administration of Muslim Law Act (Chapter 3) (Original Enactment: Act 27 Of 1966- revised edition 2009) is the applicable law. Singapore’s Administration of Muslim Law Act (Chapter 3) is an Act relating to Muslims and it makes provisions for regulating Muslim religious affairs, and to constitute a council to advise on matters relating to the Muslim religion in Singapore and a Sharīʿah Court.

For Muslim-related matters pertaining to Muslim marriage, divorce, and other related matters, section 35 of the Singapore Administration of Muslim Law Act applies, and the Sharīʿah Court in Singapore has jurisdiction:

(1) The Court shall have jurisdiction throughout Singapore and shall be presided over by a president to be appointed by the President of Singapore.

(2) The Court shall hear and determine all actions and proceedings in which all the parties are Muslims or where the parties were married under the provisions of the Muslim law and which involve disputes relating to —

(a) marriage

(b) divorces known in the Muslim law as fasakh, cerai taklik, khuluk and talak

(c) betrothal, nullity of marriage or judicial separation

(d) the disposition or division of property on divorce

(e) the payment of emas kahwin, maintenance and consolatory gifts or mutaah.

Apart from this, national law applies and remains dominant and paramount. For example, national criminal law applies to all citizens, residents and visitors of Singapore, regardless of whether they are Muslim or non-Muslims.

On Sharīʿah matters, section 55 of Singapore’s Administration of Muslim Law Act (AMLA) provides for an Appeal Board to hear appeals from decisions of the Sharīʿah Court, Kadi or Naib Kadi. On any appeal, an Appeal Board may confirm, reverse or vary the decision of the Sharīʿah Court, exercise any such powers as the Sharīʿah Court could have exercised, make such order as the Sharīʿah Court ought to have made or order a retrial, or award costs if it thinks fit.[29]

In the case of SALIJAH BTE AB LATEH v Mohd Irwan Abdullah [1996] 1 SLR 63; [1995] SGHC 216, the High Court clearly stated as follows:

“I turn now to the other major issue in the case which was whether I had the jurisdiction to hear the application in the first place. The starting point for this discussion was s 16 of the SCJA. The civil jurisdiction of the High Court is set out in s 16(1) as covering any action in personam where the defendant is served with the writ or other originating process in accordance with the Rules of Court or the defendant submits to the jurisdiction of the High Court. This general jurisdiction is limited by s 16(2) which states: Notwithstanding subsection (1), the High Court shall have no jurisdiction to hear and try any civil proceeding which comes within the jurisdiction of the Syariah Court constituted under the Administration of Muslim Law Act.”

7. Teaching Islamic Education in ASEAN

In ASEAN, only qualified and certified teachers are permitted to propagate and teach Islamic education in the respective ASEAN member countries. In Singapore, for example, Islamic teaching refers to the provision of Islamic instruction in any subject to one or more persons who are not his or her family members.[30] In Singapore, a person must be certified/registered under Singapore Asatizah Recognition Scheme (ARS)[31] to be able to teach Islamic teaching to others. For graduates of Islamic studies from non-local universities, they are required to attend Singapore’s Certificate in Islamic Thought in Context program administered by MUIS Academy (as part of a full recognition under the ARS).

In other ASEAN countries, similar requirements are expected. In Brunei, for example, national law is observed. However, recent enactment of Hudud laws[32] (Sharīʿah criminal law) has provided a new perspective on the Sharīʿah Impact Factor (SIF) on the multi-ethnic society in Brunei. Similar to Singapore, Sharīʿah law has no negative impact on ease of doing business and in carrying out commercial activities in Brunei. Business owners, both local and non-citizens in Brunei and Singapore, are required to observe Sharīʿah law and local customary sensitivities within their business processes and procedures. The same applies in Malaysia.

In Malaysia, in the marriage law domain, the Law Reform and Marriage Act 1967 applies only to non-Muslim parties. However, the occurrences of a civil spouse converting to Islam have caused unintended tension within the community, especially so in ancillary matters such as custody of children (hadhanah), division of matrimonial property and payment of nafkah iddah (maintenance) and mut’ah (consolatory gift pursuant to divorce), etc.

8. Federal Constitution

The federal constitutions of all ASEAN countries guarantee freedom of religion. In Malaysia, Article 11 of the Federal Constitution provides that "every person has the right to profess and practice his religion." However, this is subject to other compliance requirements and both State and federal governments are empowered to "control or restrict the propagation of any religious doctrine or belief among persons professing the religion of Islam."

The Federal Constitution of Malaysia provides that federal law takes precedence over State law as guided in Daud Mamat & Ors V. Majlis Agama Islam/Adat & Anor High Court Malaya, Kota Bharu Suriyadi Halim Omar J [Originating Summons No: 24 – 319, 320, 321 & 322 – 2000] 25 February 2001. Issues of Islamic law are State matters, rather than federal matters. Federal Constitution under article 121(1)(A) demarcates jurisdictions between Sharīʿah courts and civil courts which provides, "the Courts referred to in Clause (1) shall have no jurisdiction in respect to any matter within the jurisdiction of the [Sharia] courts." This amendment has been perceived to have created unintended ambiguity about Sharia versus civil law that has not been resolved clearly.

9. Prohibition of Deviant Teachings

In Malaysia, the Malaysian government listed 56 sects of Islam as “deviant".[33] These 56 sects are deemed to be threats to national security. Sunni’s Islamic precepts, principles and practices are observed and enforced by local religious authorities. The government does not recognize marriages between Muslims and non-Muslims. Same sex marriages, i.e. gay and lesbian marriages, are not permitted and not recognized in Malaysia, Brunei and Singapore. In Brunei, Hudud law has been implemented to uphold Shariah[34] within the local community, and non-Muslims, i.e. foreigners, are required to observe Shariah when carrying out business dealings –including social activities.

10. Enforcement of Sharīʿah Law, Rulings, Religious Edicts (Fatwa)

Enforcement of Syariah law are by both Federal and State authorities. At the Federal level, it is the Federal Religious authorities and bodies, and at state level, state religious authorities and bodies. In ASEAN, this appears to be the general norm. In civil matters, Federal law shall prevail over all State laws.

In Malaysia, jurisdiction of both Civil and Sharīʿah courts are prescribed by Article 121 of the Federal constitution. The National Fatwa Council is empowered by law to issue religious edict (fatwa) relating to both business and religious practices impacting Sharīʿah law. Fatwa is legally binding for Muslims, but its enforcement is another matter altogether. The Federal constitution provides that Islam is a State matter, hence, any decision to comply with National Fatwa Council’s edicts lies with the State religious authorities/bodies.

11. Religious Harmony and Social Integration

In ASEAN, religious freedom is observed. The Federal government often seeks consultation with other NGOs and religious bodies to seek their view prior to the implementation of certain Shariah perspectives. This is of course not a mandatory requirement. In Malaysia, Article 3(1) of the Federal Constitution provides that “Islam is the religion of the Federation, but other religions may be practiced in peace and harmony in any part of the Federation.” The Federal government often seeks understanding from Malaysian Consultative Council of Buddhists, Christians, Hindus, Sikhs, and Taoists (MCCBCHST), and its recommendations in the majority of cases pertaining to Sharīʿah issues. For instance, in Malaysia in the State of Selangor, a teacher/preacher cannot give any talks/lectures unless he/she is accredited by the State Religious authorities/bodies, i.e. JAIS, to do so according to Selangor Islamic Religious Administration Enactment of 2003.[35] This requirement is similar to the position in Singapore and Brunei.

12. Legal Position of Uruf (Local Custom)

Although it is a general rule that Sharīʿah law applies throughout the ASEAN region, in certain Malay-based communities, Sharīʿah or Muslim law will be applicable and modified by existing Malay custom. For example, the division of harta sepencarian in Malaysia has its origins in Malay custom. Harta sepencarian under Shariah matrimonial law is defined as property jointly acquired by husband and wife, whether directly or indirectly, during the subsistence of their marriage, or “property acquired by the joint efforts of the parties during a marriage.”[36] Harta sepencarian is also recognized generally in Singapore, Brunei, and Thailand, and other ASEAN member countries to a certain extent. In Indonesia, Malaysia, and Brunei, customs to a certain extent have legal implications on Sharīʿah practices, especially in the distribution of such harta sepencarian[37] upon divorce.

In Malaysia, local custom relating to harta sepencarian is recognized by the civil courts. In Ali Mat Khamis v. Jamaliah Kassim [1974] 1 MLJ 18, one of the issues was whether a matter involving harta sapencharian ought to be heard in the Court of the Kathi Besar (Chief Shariah Judge) or the High Court of Civil Court. There, the Negeri Sembilan Administration of Muslim Law Enactment 1960 provides in s. 41(3)(b)(iv) that the Court of the Kathi Besar shall, in its civil jurisdiction, hear and determine all actions and proceedings in which all parties profess the Muslim Religion and which relate to division inter vivos of sapencharian property. The learned Judge in that case held that, “short of specific words to that effect, the above provision of the Negeri Sembilan enactment was not intended to take away the jurisdiction in civil matters given to a High Court under section 23 of the Courts of Judicature Act 1964 (Act 91) .”

On a similar plane, Shankar J in Overseas Investment PteLtd v Anthony William O’Brien & Anor [1988] 3 MLJ 332, stated that: “Harta Sepencarian applies to all property acquired in the course of a marriage out of their joint resources or the joint efforts of the spouses. In the absence of clear evidence that the property was to be the sole property of one spouse, both have an equal share. Harta Sepencarian applies to all kinds of properties movable and immovable as long as they were acquired during the marriage.”[38]

In Singapore, as a practical example, in inheritance, section 112 and 115 of Administration of Muslim Law Act state that estate of any Muslim person shall be distributed according to the Muslim law, and subject to possible modification, where applicable, by Malay custom in Singapore.[39] In Malaysia, every state enforces its own customs and Islamic criminal law within state jurisdiction. At the State Legislative Assembly (SLA), each state is empowered to enact Islamic criminal law by virtue of item 1 of List II (State List) of the Ninth Schedule to the Malaysian Federal Constitution (Perlembagaan):

“List II—State List 1. except with respect to the Federal territories of Kuala Lumpur, Labuan and putrajaya, islamic law and personal and family law of persons professing the religion of islam, including the islamic law relating to succession, testate and intestate, betrothal, marriage, divorce, dower, maintenance, adoption, legitimacy, guardianship, gifts, partitions and non-charitable trusts; wakafs and the definition and regulation of charitable and religious trusts, the appointment of trustees and the incorporation of persons in respect of islamic religious and charitable endowments, institutions, trusts, charities and charitable institutions operating wholly within the State; Malay customs; Zakat, Fitrah and baitulmal or similar islamic religious revenue; mosques or any islamic public place of worship, creation and punishment of offences by persons professing the religion of islam against precepts of that religion, except in regard to matters included in the Federal List; the constitution, organization and procedure of Syariah courts, which shall have jurisdiction only over persons professing the religion of islam and in respect only of any of the matters included in this paragraph, but shall not have jurisdiction in respect of offences except in so far as conferred by federal law; the control of propagating doctrines and beliefs among persons professing the religion of islam; the determination of matters of islamic law and doctrine and Malay custom.”[40]

Civil criminal law is listed in item 4 of List I (Federal List) of the Ninth Schedule to the Federal Constitution. Most of these offences are those offences against the precepts of Islam as provided for under the Sharīʿah Courts (Criminal Jurisdiction) Act 1965 and Sharīʿah Courts (Criminal Jurisdiction) (Amendment and Extension) Act 1989 which applies to all States in Malaysia. However, there is an exception to the enforcement of such Islamic criminal law: Section 2 of Sharīʿah Courts (Criminal Jurisdiction) Act 1965 provides two limitations:-(i) that Islamic criminal law shall only be enforceable on persons professing the religion of Islam (the same limitation is also provided in item 1 of State List); and (ii) that such jurisdiction shall not be exercised in respect of any offence punishable with imprisonment for a term exceeding three years or with any fine exceeding RM5,000 or with whipping exceeding six strokes or exceeding any combination thereof. Hence, for example, the state of Terengganu legislative assembly has passed the controversial Sharīʿah Criminal Offence (Hudud and Qisas) Enactment 2002 but this could not be enforced. This tension is more focused on family law domain but has perceived to create creeping jurisdiction within Federal vs State dichotomy as discussed at a forum by imminent personalities.[41]

13. Sharīʿah Law at the Federal and State Jurisdiction

At the Federal government level, i.e. "Federal List" or First List set out in the Ninth Schedule of the Federal Constitution of Malaysia 1957, provides for federal jurisdiction. Sharīʿah issues fall under State jurisdiction. At the State government level, this is especially true, on the basis that Sharīʿah law is a matter that falls within state jurisdiction under “State List”, or Second List of the Federal Constitution of Malaysia 1957. Implementation of Sharīʿah law, particularly those having criminal elements, have from time to time, caused tension along State-Federal parameters. The religious pronouncement (Fatwa) by the Majlis Fatwa Kebangsaan may or may not be adopted by the States in Malaysia. Sometimes, a particular Fatwa by a State may not be the same with the position found in adjacent States in Malaysia. This tension is further aggravated in family disputes involving a Muslim spouse and the other non-Muslim spouse, for example, a non-Muslim husband who embraced the faith of Islam and the wife who decided to remain true to her non-Muslim faith (see Article 121 (1a) of Federal Constitution of Malaysia).

In Malaysia, the Prime Minister’s department seeks to harmonize Shariahs nationwide to avoid conflict with Civil law provision. Several areas have been identified such as the seven strategic clusters, namely law and judiciary, education, dakwah and media, mosques, socio-economy, maqasid and human capital.[42] The objective now is to implement Shariah in such a way that is moved from punitive-based to rehabilitative-centric. This is essential because every State in Malaysia has different punishments for the same crime.[43]

14. Islamic Banking and Finance Practices

14.1. Prohibition of Interest (‘Riba’) Under Sharīʿah Law

Riba, or 'usury/interest' is prohibited by Sharīʿah Law. Sharīʿah scholars categorized Riba into two main types: Riba al-nasi’ah, and Riba al-fadl. Riba al-nasi’ah refers to interest imposed on loans, and Riba al-fadl refers to the excess over and above the principle loan. See Qur’an (4:161): “That they took usury, though they were forbidden; and that they devoured men’s substance wrongfully; – We have prepared for those among them who reject Faith a grievously penalty.”

Equity-based financial products and services are golden keys in transforming the current economy into Ummah Economic Community (UEC). Riba has never been a driver of economic freedom and progress since the emergence of Industrial Revolution, and certainly does not cater to the altruism of Islamic Banking and Finance (IBF). The solution to Riba is trade and any supporting mechanism such as IBF.

In contrast to Riba, Sharīʿah law strongly supports the use of mudharabah and musyarkaat as sustainable financing tools in the financing of regional trade and global Halal market commerce. These two approaches predominantly grounded on a profit and loss sharing basis are widely encouraged, especially in financing businesses and entrepreneurial activities because it supports the development of real economy. On Islamic banking and finance, see Leo Desmond Pointon & Jeong Chun Phuoc, Revenue Law in Singapore and Malaysia: Cases and Commentary (3d ed. 2011). See also Davis, M. K. Entrepreneurship: An Islamic Perspective, 20 Int’l J. Entrepreneurship & Small Business 63–69 (2013).

14.2. Islamic Banking and Finance: Operational Reality and Practice

Ever since the Islamic Development Bank was established in 1975 as a venue for providing funds for investment projects in member states in ASEAN, led by Malaysia, IBF is gaining strong growth in the financial sector and in capital markets. One of the key objectives of Islamic Banking and Finance is to develop a sustainable social community i.e. Ummah Economic Community (UEC)that could drive a globally inclusive economy for all the people of the world, regardless of race, belief and background. Sharīʿah’s view in supporting entrepreneurship and commerce is the fact that IBF is based on social justice motivation guided by compliance with Maqasid Sharīʿah. On concept of Islamic entrepreneurship see, Ramadani, V., Dana, L. P., Ratten, V., & Tahiri, S., The Context of Islamic Entrepreneurship and Business: Concept, Principles and Perspectives, 15 Int’l J. Bus. & Globalisation 244–261 (2015).

The Speech by Tan Sri Rais Yatim at International Council of Islamic Finance Educators - ICIFE (ICIFE) 2nd AGM (ICIFE, 2016) in Kuala Lumpur, Malaysia was inspiring for IBF (Islamic Banking and Finance) World. The Islamic World especially Organisation of Islamic Cooperation (OIC) Countries (including ASEAN) and lead by Malaysia, must forge a new IBF Identity Framework in promoting Sharīʿah Disruptive Innovation for IBF(s-IBF) as a viable alternative to the current global financial chaos. A chaos brought about (not just by oil market crush) but by total reliance on RIBA centric theory of economic progress since the catastrophic Great Depression. Interest-based economic activities have been proven by Nobel Prize Winners, etc. to have created a vacuum of economic Black Holes within both developed and developing regions including 57 OIC Countries. OECD (and ASEAN) leaders are now still struggling to find that Financial Holy Grail to lift global financial malaise out of the RIBA darkening mess.

Under Sharīʿah law, all Riba driven IBF endeavors are prohibited because it is deemed to be a great barrier to true Open Economies. Western World led by Yale, Oxford and Cambridge etc. acknowledged the pioneering works by Ibn Taimiyyah, Ibn Khaldun, Al Shatibinomics and the whole Ahli Sunnah wa Jamaat who are of the view that the current World’s Economic and Financial Chaos (not forgetting that 1998 crush) must be free from RIBA in order to develop a transparent and dynamic Economic Ummah for all. As a good working example, the Dinar based concept is a good solution to the destructive “printing money problem” (where paper monies are printed with no real asset back up).

IBF is therefore re-charting new course in financial innovation. Existing accounting standards i.e. IFRSs or local GAAP are Riba-centric based on conventional product structures and practices. These are perceived to be Shariah non-compliant and unable to account for and report present and future Islamic financial transactions. Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) have issued a new standard and four drafts are redefining the trends of future IBF practice and operation in old and new frontiers. See Deloitte, Islamic Accounting.

There is strong economic and trade motivation for ASEAN, USA, China and EU to drive pioneering efforts in pushing for a Sharīʿah Disruptive Innovation in IBF Education as a new green strategic solution to present RIBA Theorem of Destructive Economic and Financial Integrity. See Jeong CP, Economic & Financial Disruptive Innovation for Islamic Banking & Finance (IBF) Sustainability, Icife (2016).

14.3. Strategic Development in the IBF Landscape: Islamic Capital Markets

IBF is for the world as a viable option for financing. The Securities Commission’s (SC) advocacy for regionalization of ASEAN’s 10 capital markets is rather timely as keynoted at the recent ASEAN Fixed Income Conference 2017. In 2013, according to SC, ASEAN’s total capital markets stood at US$3 trillion (RM13 trillion) and the saving rate was around US$800 billion in 2015.As an add-on, capital market players may look towards the Islamic Capital Market (ICM) as a new Blue Ocean Wave for ASEAN capital markets. ICM plays a supporting role to the Islamic Banking and Financial (IBF) system in the enhancement of Islamic financial markets in Malaysia.

The advantages of ICM were emphasized in the “Islamic Capital Market Task Force of the International Organization of Securities Commissions” report, which confirmed the role of ICM in the diversification of conventional capital market dimension at global platforms. ICM is anticipated to strengthen ASEAN in propelling collective regional financing, especially in the ASEAN Economic Community (AEC). Developing new ICM initiatives will therefore buffer ASEAN from Brexit, the United States’ protectionism and the European Union’s economic volatilities.

In realizing this initiative, there is a need to relook Islamic Banking Education and IBF as the twin towers of ICM growth. ICM has all the ingredients to create innovation in the AEC capital market, catering to real economic progress and regional trade integration. ICM, through innovative products, will not only supplement conventional capital market but will also provide a unique source of capital in AEC’s economic development agenda in terms of liquidity, scale and capacity. This will generate capital market diversification and maintain stability in terms of global shocks.

In Malaysia, ICM has seen enormous expansion in the Islamic equity sector and fixed income. According to a report, at the end of 2014, the total value of ICM was about RM1.5 trillion, accounting for 57 percent of the total market capitalization in Malaysia and represented a 10-year compound annual growth rate of 11.3 percent. On Bursa Malaysia, more than 70 per cent of the stocks are classified as Sharīʿah -compliant by the Sharīʿah Advisory Council of SC, and there are about 200-unit trust funds across asset classes. Notable innovative products of global sophistication are Malaysia’s first Islamic real estate investment trust (i-REIT), first Islamic stapled REIT, Asia’s first Islamic exchange-traded fund (i-ETF) and Asia’s first exchange-traded sukuk.

It is time for a wider diffusion and adoption of ICM by setting up an AEC Islamic Capital Market as a new capital space for the AEC Community with the US, EU and China as participating partners. To regulate and enhance Islamic financial service activities, including growing ‘Takaful issue’, Islamic money market and Islamic foreign exchange market, etc. in Malaysia, a new law has been enacted by Parliament, the Islamic Financial Services Act 2013 (IFSA). As a result of strong demands and performance in the financial industry. The Islamic Financial Services Act 2013 also supports the Financial Services Act 2013 in view of sophisticated financial industry in Malaysia whereby both conventional finance and Islamic finance are carried out in parallel. The regulation provided for by both IFSA and FSA[44] are critical to protect Consumer protection and ensure transparent and proper business conduct in the financial services activities.

14.4. IBF Megatrends: Spearheading Equity for Business and Economic Harmony

14.4.1. Islamic Banking and Finance Rise in UK

In the UK, Sharīʿah compliant banks and conventional banks are offering IBF products and instruments as viable alternatives to conventional options. As of 2017, there are about 30 organizations in the UK offering Islamic financial services under the watchful eyes of UK Prudential Regulation Authority (PRA). PRA–led prosecution has create new emphasis in Sharīʿah compliant issues in the UK as it seeks to establish itself as IBF center of excellence. In the case of Qatar Islamic Bank (QIB) UK, Andrew Bailey of the Prudential Regulation Authority, said: ‘In failing to assess, maintain and report on its financial resources for over a year, QIB failed to meet some of the most basic regulatory standards.’ See Jill Treanor, Qatar Islamic Bank UK Fined £1.4m by PRA, The Guardian (Apr. 8, 2016).

14.4.2. The Case for Islamic Banking and Finance in USA

IBF is slowly seeing outcomes that shape the future of finance in US corporate and industrial sector. From allowing IBF to operate only as offshore alternatives, financial regulators and policy makers are beginning to realize that Sharīʿah Impact Factor in IBF can in fact enhance America’s Sustainable Future for the American people. "Islamic banks' capital grew from $200 billion in 2000 to close to $3 trillion in 2016," said Ibrahim A. Warde, professor of international business at the Fletcher School of Law and Diplomacy at Tufts University. See Aamer Madhani, Shariah Financing Growing Popular in the West, USA Today (Oct. 11, 2014). See also, Naureen S. Malik, Interest-Free Financing for U.S. Muslims, ABC News (last accessed on Nov. 15, 2017).

14.5. 21st Century Halal Economic Agenda

Besides IBF, the US is open to Halal businesses to diversify its industry.[45] One main area of concerns is Halal Certification for Halal food and products. Strategic co-operation to promote Halal industrial and business sectors is seen among various parties including the US embassies and the US State Department operating in the United States, Islamic Food and Nutrition Council of America, Islamic Services of America, the Islamic Society of North America’s Halal Certification Agency and Halal Food Council International [46].

Smart and strategic cooperation is critical. Areas of strategic cooperation encompasses halal food and beverage, halal health products, halal cosmetics, halal tourism, halal Islamic banking and finance, halal fashion, halal AI, halal block chain technology, etc.

Business in Malaysia are striving to be environmentally conscious, in line with the Green Ocean Strategy. However, it also raises several concerns. One main concern is Halal Certification standards. There is a critical need to harmonize Halal standards at all levels of the Halal Economic Super-infrastructure not only for the Ummah but for all players of Economic Dimension. One way forward is to incorporate Halal Agenda within WTO dimension and under current FTA and Regional Free trade Agreements.

14.6. IBF Innovation and Governance

The establishment of the Malaysian Sharīʿah Index (Index puts Malaysia’s Sharīʿah compliance score at 75.42 per cent, NST, March 28) is another good development in Sharīʿah governance. The index uses Maqasid Sharīʿah (five areas) as a benchmark for eight fields of governance, namely Islamic law (which scored 87.19 per cent), politics (79.19 per cent), economy (65.27 per cent), education (82.5 per cent), healthcare (73.92 per cent), culture (66.47 per cent), infrastructure and environment (62.31 per cent) and social (68.52 per cent).

The purpose of Maqasid Sharīʿah is essentially to create a sustainable UEC based on trade in view of the ASEAN Economic Community (AEC) agenda. Sharīʿah rulings, according to the four mazhabs, were seen as supporting equity as a strategic driver to achieve Sharīʿah Economic Equilibrium. Since 1983, the focus was on equity-based financing Mudharabah and Musyarakah (Mudha-Syara), two dynamic methods of equity.

Recently, in Malaysia a precedent was established for guidance for Islamic Banking and Finance (IBF) practices. The government recognized the role of Shariah Advisory Council as a single body that is vested with sole authority in the interpretation of IBF matters in Malaysia. This is found in a precedent case of JRI Resources Sdn Bhd v Kuwait Finance House [2019] MLJU 275, whereby the Federal Court in a close 5-4 majority judgment held that the Malaysian National Bank’s (Bank Negara Malaysia) Shariah Advisory Council’s (SAC) findings on Islamic finance is binding on Civil Courts[47].

Upon deliberation, the nine-member judicial panel stated that Section 56 and Section 57 of the Central Bank of Malaysia Act 2009 which provided powers to the SAC to determine which Shariah laws related to IBF was constitutional. This decision follows a dispute involving five agreements made under Islamic banking facilities between two parties i.e. Kuwait Finance House (Malaysia) Berhad (KFH), and a shipping company (JRI Resources Sdn Bhd) and three other guarantors. This means that the rulings endorsed by SAC is recognized as a form of expert opinion in IBF matter and the Civil court has no power to review such rulings.

However, it is worthy to take note of the dissenting view by Federal Court judge Tan Sri Idrus Harun who was of the opinion that the effect of Section 56 and Section 57 of the CBMA was to vest judicial power in the SAC to the exclusion of the High Court on Shariah matters.

Over the years, there has been a departure from equity to debt engagement by both Islamic Banks and conventional banks having Sharīʿah windows. According to a report, “the size of the Islamic finance market ranges from US$1.66 trillion to US$2.1 trillion and expected to reach US$3.4 trillion by the end of 2018”. However, the majority of Islamic Finance engagements are focused on debt. IBF practice is disproportionately geared towards debt rather than equity, creating profound conflict of interests. Debt is attractive simply because of the Low Risk Exposure-Higher ROI (LRHR) factor. Take, for example, the popular murabahah vehicle of debt financing. Should it be debt all the way?

Within the Maqasid Sharīʿah framework applied to IBF’s LRHR it is, and should only be, a secondary component. This is not to delimit the function of debt. How do you strike a balance in promoting both debt and equity financial products? Debt should ideally play a supporting role in forging equity forward as prime optimus, and not the other way around. Hence, the need for reformation to equity structure and sectoral practice. To re-engineer a return to equity, it is imperative to refocus on Mudha-Syara by redesigning the structure to make it equity-centric, while allowing debt-based finance to play a supporting role. There is a need to reform Sharīʿah compliance governance to a level where transparency is achieved for both debt and equity. This calls for Sharīʿah Standardization for equity and debt. See Financial Accounting Standards Board, Accounting Standards Updates – Effective Dates (updated August 2017).

Regulation (statutory and self-regulation) in IBF compliance standardization for debt and equity has to be redefined. Disclosure of risks associated with debt and equity must be re-examined by a regulatory body to ensure a fair playing field. The quantum leap for strategy and policy in equity over debt framework is to adopt these measures: Tax holidays, exemptions and deductions for equity preference; incorporation of Equity Ventures Bhd, whereby Debt Ventures Bhd plays a supporting role; and, leveraging unity and solidarity for justice and peace. See 13th Organization of Islamic Cooperation as a new catalyst for economic activities using equity in support of UEC.

The rise of the ASEAN Economic Community (AEC) should be seen as a golden business opportunity to spearhead equitable economic using IBF in particular Mudha-Syara as the new vehicle for US-ASEAN and China – ASEAN global trade perspective. An ASEAN-US and China initiatives in this area are key drivers for global open market success for every nation – both developed and developing blocs in global economic prosperity. This is pivotal in realizing social-link business and trade justice objectives in compliance with 17 sustainable development goals (SDGs) by 2030 and beyond. See Jeong CP, Spearheading Equity for Community’s Economic Growth, New Straits Times (May 9, 2016).

14.7. Cryptocurrency Mega-Trends

Industry 4.0 has been declared by global economic leaders as the new face of global economy. Malaysia’s position on business innovation was asserted at The Economist Events’ Innovation Summit 2017, which discussed Asian innovation “in a drawbridge-up world.” Technology renders every industry either relevant or irrelevant. This is the outcome of disruptive innovation. But it is positive in vision and transformation, especially in the internationalization of innovation for trade and business. One of these outcomes is cryptocurrency, such as Bitcoin and Ethereum.

Innovations, such as drones or Uber and Grab e-hailing services, have changed urban transportation and businesses for the interest of the people, despite compliance hiccups. Blockchain technology has transformed conventional banking, financial systems and norms. Cryptocurrency seeks to overcome the restrictions of conventional banking and financial practices. The world cannot stop innovations such as cryptocurrency. To ensure investors’ confidence, the concept of cryptocurrency must comply with the goals and visions of the law, that is, regulation of new business innovation. Hence, a balance must be achieved, given the advantages of cryptocurrency.

It also has an impact on Islamic banking and financial sectors. Efforts are underway by Syariah advisory councils and national financial organisations to determine the nature, scope and legality of cryptocurrency for trade, business and Islamic banking and financial activities. Innovations must be either regulated in a transparent manner by self-regulation, or by government legislative framework, for conventional and Islamic banking and financial transactions.

Islamic banking and finance is no longer the new kid on the block. The International Monetary Fund recently held its first discussion on the subject, as well as Fintech innovation and blockchain technology and how they impacted global trade and economies of scale. Some argued that cryptocurrency was more secure and effective than “conventional banks, which operate using the principle of fractional reserve, which is prohibited by Syariah.”

Cryptocurrency can be moderated and legally accepted to spur economic internationalization agendas for developed and developing regions. Cryptocurrency must comply with Syariah requirements: there must not be elements of interest (riba) involved, no elements of excessive risk (gharar), no elements of speculation or gambling (maisir), and cryptocurrency must be regulated by a central digital authority to provide a guarantee net of safety and transparency to buyers and investors. As world trade gears up for Industry 4.5 using economic tools to generate global peace, world leaders must make a just and balanced decision to maximise the potential of new innovation in the form of cryptocurrency.[48]

15. Sharīʿah Law in Other ASEAN Member Countries

In Malysia, Shariah plays a dominant role within local communities, and the discussion of Shariah regardingnon–Muslim citizens can be a very sensitive issue. Take for example the issue of under-age marriage. Under Syariah law, the minimum age for a male Muslim to get married is 18 years old and for a female Muslim, 16 year sold. For those who are below the said the stipulated ages, clear consent was needed as per the respective State Shariah Islamic Family Law Enactment.[49] A Muslim adult who marries an underage Muslim female could be prosecuted for solemnizing a marriage without obtaining the Shariah court's permission.[50] The States’ Shariah Family Law enactments as a general rule allows those under the legal minimum age to marry subject to clear approval from both the Syariah court and the consent of the bride’s and groom’s parents.

In Singapore, Shariah is recognized and the government has implemented it in a way that complies with the national agenda of cohesive economic progress. For example, Malay-Muslims are engaged in order to receive their inputs on Singapore's policies impacting Malay-Muslims’ well-being in harmony with Singapore's national strategy for the future of 2020 and beyond.[51] The ‘M-Cube’ initiative, which comprises MENDAKI, MESRA and MUIS, is a positive initiative to address issues pertaining to marital problems, family support for former prisoners and youths mentoring activities[52].

Thailand practices a civil law system with common law influences. Sharīʿah law is recognized for local Muslim populations. The government promote Islamic affairs and protect the status of Thai Muslims according to Islamic principles, and Sharīʿah traditions. See Royal Thai Embassy in Riyadh, Kingdom of Saudi Arabia, Muslim in Thailand. In Thailand, Administration of Islamic Organizations was enacted in 1997, thus creating Central Islamic Committee of Thailand to oversee the Sharīʿah law observation and affairs of Thai Muslims. Central Islamic Committee is presided over by a Chularajmontri (Grand Mufti), who is the State adviser on Islamic affairs to the government. Under the Central Committee set up, provinces with a sizeable Muslim population will be regulated by Provincial Islamic Committees. The provincial committee regulates Islamic affairs at provincial level and it is empowered to appoint members to the Mosque Committees. Currently, there are about 3,460 committees of the mosques nationwide in Thailand. See Royal Thai Embassy in Riyadh, Kingdom of Saudi Arabia, Muslim in Thailand.

Philippines practices a mixed legal system of civil, common, Islamic, and customary law. By virtue of Presidential Decree No. 1083 (A Decree to Ordain and Promulgate a Code Recognizing the System of Filipino Muslim Laws, Codifying Muslim Personal Laws, And Providing for Its Administration and For Other Purposes) (‘Degree’), regulated Filipino Muslim communities and matters pertaining to Sharīʿah law. This degree acknowledges local Sharīʿah customary law besides Sharīʿah law:

“WHEREAS, pursuant to the spirit of the provision of the Constitution of the Philippines that, in order to promote the advancement and effective participation of the National Cultural Communities in the building of the New Society, the State shall consider their customs, traditions, beliefs and interests in the formulation and implementation of its policies; WHEREAS, Islamic law and its principles of equity and justice, to which the Filipino Muslim communities adhere, provide an essential basis for the fuller development of said communities in relation to the search for harmonious relations of all segments of the Filipino nation to enhance national unity”. Chan Robles, Virtual Law Library, Philippine Laws, Statutes and Codes.

A recent development in the Philippines is the government approving a new law that recognized the regulatory framework for Islamic banks. The new Republic Act 11439 [53] approved Islamic banking, which refers to banking business that does not involve interest (riba) and carry out in compliance with Shari’ah principles. The law positioned Islamic banks under the overall regulatory supervision of the national Bank i.e. Bangko Sentral ng Pilipinas (BSP). BSP’s Monetary Board is permitted to allow conventional banks to implement Islamic banking arrangements, and to set up structures and transactions with an approved Islamic banking unit or window.

Indonesia adopts a civil law system based on Roman-Dutch model and are influenced in many Sharīʿah aspects by customary law (Uruf) either having Sharīʿah elements or indigenous underpinnings. The government required all religious groups to comply with these regulations to promote harmony among all religious sects and groups. The regulations are: Ministry of Religious Affairs and other ministerial directives, i.e. Revised Joint Ministerial Decree on the Construction of Houses of Worship (2006), Overseas Aid to Religious Institutions in Indonesia (1978), and Guidelines for the Propagation of Religion (1978). See US State Department, Indonesia Profile. The 1974 Marriage Law (See US State Department, Indonesia Profile) makes polygamy illegal for civil servants in Indonesia, subject to Sharīʿah requirements. It recognized Sharīʿah law of marriage that permits Muslims men to legally marry up to four wives subject to Sharīʿah requirements i.e. that he is able to support each equally (as one of the many conditions). A Muslim man who intend to marry a second wife (third, or fourth wife), I required to get a Sharīʿah court order together with the consent of the first wife. In practice, however, there is no unity in Sharīʿah enforcement and implementation. See US State Department, Indonesia Profile.

Another ASEAN member country that observes a mixed legal system is Brunei. Its legal system is based on English Common law similar to Malaysia and Singapore (due to English/British legal legacy) and Sharīʿah law. In May 2014, the first phase of Sharīʿah penal codes was instituted [54] comprising Shari’ah Penal Code Order, 2013, and supported by amendments to Islamic Religious Council Act, Shari’ah Court Act, and Shari’ah Court Classification Order, 2001.[55] This Sharīʿah penal codes [56] applies throughout Brunei in conjunction with existing civil law.

Burma Law Act 1898 provides for recognition of Sharīʿah law in Burma. Application of Islamic Family Law is by virtue of section 13 of Burma Law Act 1898. Personal Laws of Muslims relating to succession, inheritance, marriage, or any religious usage or institution is recognized by government. Islamic Family Law are not being codified and Islamic Family Law procedures in Myanmar are based on court decisions/rulings. For instance, issues relating to Waqaf as in the case of Daw Ein & Others v. Daw Chan Thar & Others and Saya Cair v. Daw Tin Tin & Others where the court acknowledged as valid certain Waqaf procedures. See Marlar Than Aung, Current Legal Framework of Islamic Family Law in Myanmar, Burma Library.org.The Constitution of Union of Myanmar adopted in 2008 provides that “Every citizen is equally entitled to freedom of conscience and the right to freely profess and practice religion subject to public order, morality or health and to the other provisions of this Constitution.” See Marlar Than Aung, Current Legal Framework of Islamic Family Law in Myanmar, Burma Library.org.

16. Conclusion

ASEAN as a whole is undergoing an economic transformation within the 21st Innovation-centric global economy. The advent of the ASEAN Economic Community (‘AEC’) will witness tremendous opportunities for regional cohesion and integration between ASEAN, the Asia-Pacific region and the United States in global trade and business sustainability. This will usher in economic progress at all levels in light of dismantling trade barriers in view of myopic protectionist measures,[57] which are antithetical to ease of doing business. Muslim-majority ASEAN countries such as Indonesia, Malaysia, and Brunei will see effective utilizations of Shariah Impact Factor to advance Halal supermarkets between United States and ASEAN in new trade agreements and pacts. On the other hand, Syariah law with special focus on Shariah Impact Factor is perceived as accommodating business growth (especially Halal marketplace,[58]) Islamic Banking and Finance, Cryptocurrency and open trade imperatives as AEC seeks to look not just at the One Belt One Road[59] initiatives but at future trade agreements with US for Asia-Pacific hemisphere in light of United Nations’17 Sustainable Development Goals (17 SDG). See US-ASEAN Business Council, Inc., Advancing U.S. Business in Southeast Asia.


[1] ASEAN (2020). “ASEAN Member States” (accessed 23.1.2020)

[2] Business Insider (2020). "The halal food market is booming globally — here's how 2 Muslim-majority countries are looking to take advantage.” Retrieved from https://www.businessinsider.com/halal-food-muslim-malaysia-bosnia-2020-3?IR=T.

[3] ASEAN (2020). "The booming halal industry.” Retrieved from

https://theaseanpost.com/article/booming-halal-industry (date accessed 22.3.2020).

[4] Market Watch (2020). "Global Halal Food Market 2020 Worldwide Overview by Industry Size, Market Share, Future Trends, Growth Factors and Leading Players Research Report Analysis" (accessed August 2020).

[5] Brittannica (2020). "Shariah.” retrieved from https://www.britannica.com/topic/Shariah (date accessed 23.1.2020).

[6] Translation by Sahih International: “Then We put you, [O Muhammad], on an ordained way concerning the matter [of religion]; so follow it and do not follow the inclinations of those who do not know”; and translation by Pickthall: “And now have We set thee (O Muhammad) on a clear road of (Our) commandment; so follow it, and follow not the whims of those who know not.” Tafsir At-Tabari Vol. 25, Page 146. For details, see Quran.com.

[7] See Oxford Dictionaries.

[8] See Oxford Islamic Studies.

[9] M H Kamali. “Maqasid al-Shariʿah Make Simple” (London, Washington), London & Washington. The International Institute of Islamic Thought, Occasional paper Series 13, August 2008. See also Maqasid al-Shariah: The Objectives of Islamic Law, Islamic Studies, 38 (1999), 193209.

[10] Al Quran, Surah Al-Baqarah: 185.

[11] M H Kamali. “Maqasid al-Shariʿah Make Simple” (London, Washington), London & Washington. The International Institute of Islamic Thought, Occasional paper Series 13, August 2008. See also Maqasid al-Shariah: The Objectives of Islamic Law, Islamic Studies, 38 (1999), 193209.

[12] Jeong C.P. (2016). "Spearheading equity for community's economic growth" (date accessed 21.2.2020).

[13] “And whoever desires other than Islam as religion - never will it be accepted from him, and he, in the Hereafter, will be among the losers.” (3:85).

[14] As provided in verse: “And do not kill the soul which Allah has forbade [to be killed] except by [legal] right. This has He instructed you that you may use reason.” (6:33)

[15] “O you who have believed, indeed, intoxicants, gambling, [sacrificing on] stone alters [to other than Allah], and divining arrows are but defilement from the work of Satan, so avoid it that you may be successful.” (5:90)

[16] “And do not approach unlawful sexual intercourse. Indeed, it is ever an immorality and is evil as a way. (17:32)

[17] “And do not consume one another's wealth unjustly or send it [in bribery] to the rulers in order that [they might aid] you [to] consume a portion of the wealth of the people in sin, while you know [it is unlawful].” (2:188); “And give to the orphans their properties and do not substitute the defective [of your own] for the good [of theirs]. And do not consume their properties into your own. Indeed, that is ever a great sin.” (4:2)

[18] The Star (2020). "Malaysia announces movement control order after spike in Covid-19 cases (updated)" (accessed 23.3.2020).

[19] Ibid, The Star (2020). "Malaysia announces movement control order after spike in Covid-19 cases (updated).”

[20] Ibid, The Star (2020). "Malaysia announces movement control order after spike in Covid-19 cases (updated).”

[21] For details on differences, see this BBC article.

[22] ESYARIAH (2020). "Syariah Criminal Offences (Federal Territories) Act 1997." Retrieved from (accessed 22.3.2020).

[23] See also, "Child conversion: What the Federal Court previously decided.”

[24] “Siti Fatimah case: Lawyers ticked off.” See also "Malaysia woman scores rare legal win to quit Islam."

[25] For data on child marriage in Malaysia, see JKSM and NRD figures from Deputy Women Minister Datuk Azizah Mohd Dun's parliamentary reply, 19 May 2016 (Hansard). See Malay Mail (2020), "How Malaysia’s legal system allows child marriage, five cases daily." (accessed March 2020).

[26] The Star (2020). "‘Bin Abdullah’ case: Federal Court says illegitimate Muslim child cannot bear father's name."

[27] Malay Mail (2020). "‘Bin Abdullah’ Case: Uphold the child’s right to a name, identity and family — Sisters In Islam."

[28] Ibid, Malay Mail (2020). "‘Bin Abdullah’ case: Uphold the child’s right to a name, identity and family — Sisters In Islam.”

[29] Majlis Ugama Islam Singapura (Islamic Religious Council of Singapore), Appeal Board and its documents, https://www.muis.gov.sg/Our-Services/Appeal-Board (accessed August 2020).

[30] Asatizah Recognition Scheme (ARS), About, https://www.muis.gov.sg/ARS-and-IECP/About/About-ARS-IECP/More-info-on-ARS (accessed August 2020). See also, Asaatizah Recognition Scheme (ARS) and Islamic education Centres & Providers (IECP) Regulation, Handbook for Prospective Applicants, https://www.muis.gov.sg/-/media/Files/ARS/Document/ARS--IECP-Handbook--Final.pdf (accessed August 2020).

[31] Asatizah Recognition Scheme: ARS consists of two tiers: (1) Islamic Teachers (Asatizah) and (2) Quranic Teachers. ARS Registration Requirements: Applicant is satisfactorily trained to teach at an Islamic education centre (based on the qualifications stated in the ARS tiers and levels of teaching section); and the applicant is a fit and proper person to teach at an Islamic education centre. In considering whether a person is fit or proper person to teach, the following is considered: “(i) any conviction for any offence involving dishonesty, moral turpitude, violence or harm to children; (ii) prior suspension or cancellation of recognition of ARS; (iii) any behaviour of the person that does not satisfy a standard of behaviour generally expected of a teacher at an IECP, or is otherwise disgraceful or improper.”; See also Asatizah ARS and IECP, https://www.muis.gov.sg/ARS-and-IECP (accessed ugust 2020).

[32] Straits Times (2020). "Brunei Implements Islamic Law: Facts about Syariah Around the World." (date accessed 28.2.2020).

[33] Rabu, "PDRM Pantau 56 Kumpulan Ajaran Sesat Berpotensi Ancam Keselamatan," 15 Tahun Star (December 16, 2015) (accessed August 2020). See also, Bernama, PDRM Pantau 56 Kumpulan Ajaran Sesat Berpotensi Ancam Keselmantan, Astro Awani – Berita Malaysia (Dec. 16, 2015) (accessed August 2020).

[34] Ibid, Straits Times (2020). "Brunei implements Islamic law: Facts about syariah around the world.”

[35] Section 119 (1) of the Selangor Islamic Religious Administration Enactment of 2003.

[36] Mimi Kamariah in “Family Law in Malaysia”, Malayan Law Journal 1999, p.366.

[37] Mohd NorhusairiMat Hussin, Distribution Practice of Harta Sepencarianin Malaysia: A Literature Review, Journal of Shariah Law Research (2016) vol. 1 (1) 75-88).

[38] ZICO (2020). "Shariah Matrimonial Rights in Malaysia,” https://www.step.org/sites/default/files/Events/2017/Malaysia/Harta_Sepencarian_090317.pdf

(accessed March 2020).

[39] Faraidh, The Islamic Law of Inheritance, https://www.muis.gov.sg/-/media/Files/Corporate-Site/Forms/Faraidh/Faraidh-Brochure-English.pdf (accessed August 2020).

[40] Federal Constitution (2010). The Commissioner Of Law Revision, Malaysia.

[41] "Sharīʿah in Malaysia: Experts weigh in" Sunday, 13 December 2015, by Tan Yi Liang.

[42] NST (2020) “State Rulers Receptive to Streamlining Syariah law.” (accessed 3.3.2020).

[43] Ibid.

[44] ICEIF (2020). "Islamic Financial Services Act (IFSA) and Financial Services Act (FSA).”

[45] USDS (2020). "Certified Halal in the USA." Embassy of the United States of America.

[46] Ibid, USDS (2020). "Certified Halal in the USA.” Embassy of the United States of America.

[47] Malay Mail (2019). "Federal Court Rules Bank Negara SAC Findings Binding on Civil Courts.”

[48] Jeong CP (2018). "Cryptocurrency can spur growth but must be Syariah-compliant." (date accessed 13.3.2020).

[49] NST (2020). "Syariah procedure for approving underage marriages to be reviewed.” (accessed May 2020).

[50] The Star (2020). "Man Fined RM1,800 for marrying 11-year-old girl without Syariah court's consent.” (accessed March 2020).

[51] CNA (2019). "Malay-Muslim Community to be Consulted on more issues that concern them: Masagos.”

(accessed December 2019).

[52] Ibid, CNA (2019). "Malay-Muslim community to be consulted on more issues that concern them: Masagos.”

[53] ICIFE (2020). "Duterte Signs Law Regulating Islamic Banks.” (accessed March 2020).

[54] "Everyday life in Brunei under hudud," October 2, 2016. The Star.

[55] Press Release, Prime Minister’s Office, 30.04.14 Implementation of the Shari’ah Penal Code Order, 2013 (Apr. 30, 2014).

[56] Prime Minister Office Brunei Darussalam, “Implementation of Shari’ah Penal Code Order, 2013” (April 30, 2014), http://www.pmo.gov.bn/Lists/Announcements/NewDispform.aspx?ID=30 (accessed August 2020).

[57] "ASEAN, Japan to Strengthen Efforts against Protectionism.”

[58] "ASEAN Must Have a Standard Halal Cert."

[59] "Southeast Asia Finds China Love as Xi Pushes 'One Belt, One Road' Dream.” See also "China’s One Belt, One Road: Will it reshape global trade?"