In the Name of Allāh,

the Entirely Merciful, the Especially Merciful

Praise is due to Allāh, Lord of the worlds, may the blessings and peace be upon our master Muḥammad, the last of prophets, on his family, and all his companions.

Resolution No. 84 (1/9)

Gold Trading and Shariah Solutions to Combined Cash and Hawala

The Council of the International Islamic Fiqh Academy of the Organization of the Islamic Conference, holding its 9th session in Abu Dhabi, United Arab Emirates, on 1–6 Dhū al-Qi’dah 1415h (1–6 April 1995),

Having examined the research papers submitted to the Academy concerning

Gold Trading and Shariah Solutions to Combined Cash and Hawala (Transfer), Having listened to the discussions on the subject,

Resolves

Gold Trading:

1. It is permissible to purchase gold and silver by certified cheques provided that the exchange should be held in a majlis (attendance of the parties).
2. Confirming scholars’ opinions regarding the impermissibility of exchanging gold jewelry for gold jewelry of higher value, as there is no sense in exchanging gold for other gold of a better quality or Therefore, the Academy is of the opinion that it is not necessary to delve into this issue since it has lost its applicability and since nowadays, gold as a currency has been replaced by paper money. If it is exchanged with gold, it will be considered as another different type.
3. It is permissible to exchange a gold quantum for a lower quantum associated with a throw-in of a different nature, on the grounds that the difference in one of the elements exchanged is compensated by the throw-in.

4. Since the following issues require further conceptualizations as well as technical and Islamic research, it was decided to postpone the adoption of a resolution in their regard, until collecting the necessary data to distinguish them, notably:

   • Purchase of shares in a gold or silver mining
   • Owning and granting ownership of gold through the delivery and

receipt of certificates representing specific quantities of gold that are available in the safety boxes of the issuing party for him to use in accessing or disposing the gold whenever he wishes.

Second: Shariah Solutions to Combined Cash and Hawala (Trans- fer)

1. Transfers made in a specific currency and which the client wishes to transfer in the same currency are permissible under Shariah, whether for a fee or not, within the limit of the actual When carried out without a fee, it is considered as an absolute transfer for those who follow the Hanafi fiqh which does not stipulate the client’s indebtedness. For other schools of fiqh, it is considered as “souftaja”, which is the act of depositing a certain amount of money with someone to pay it for the depositor or his representative in another country.

In case transfer is made for a fee, then it is considered as an agent against a charge but if the transfer agents operate transfers for the general public, then they are considered as guarantors of the amount, under the guarantee of the common service provider.

1. If the transfer calls for the payment in a currency other than the one in which it was deposited, then the transaction involves an exchange and transfer of currency, in the sense indicated in paragraph (a). The exchange operation is affected prior to the transfer, the customer remitting the amount over to the bank, and the bank crediting its registers with the same amount, after agreement on the exchange rate set forth in the receipt delivered to the customer. Thereafter, the transfer operation is carried out in the sense indicated above.

Indeed, Allāh is All-Knowing.