Q321 :Does Islam permit the enactment of
laws which have retroactive effect? In this connection, is it
permissible for one of the parties to a contract to go back on
it after the contract has been netpleted and acted upon? May I
mention the case of a law which has been enacted specifically
to encourage citizens to repatriate funds which they hold
abroad. The government gives certain guarantees which are
calculated to make such citizens feel that their money will be
safe once it is repatriated. However, the government goes back
on its promises and brings in a new regulation which renders
all promised guarantees ineffective. Please netment in
detail.
A321 : Let us first of all be clear about
the area in which an Islamic government may enact laws and
regulations. We know that Islam sets into operation certain
laws which are applicable to all Muslim netmunities and in all
generations. What these Islamic laws forbid cannot be made
permissible by any authority, whether social or governmental.
For example, Islam forbids the drinking and the sale of
intoxicants as well as adultery and fornication. It is not
permissible for any Muslim government in the light of the above
prohibition to issue licenses to any person, Muslim or
non-Muslim, to sell intoxicants in a shop, a hotel, or a
restaurant. You find in some Muslim countries that the sale of
intoxicants is permissible. Moreover, the government imposes
certain taxes on the import and sale of such stuff. This is
certainly a forbidden action and the government which allows
such a thing contravenes Islamic teachings. Similarly, in some
Muslim countries, we find laws that suggest that sexual
intercourse between consenting man and woman does not
constitute an offense. It is not open to a Muslim government to
enact such a regulation. Things may go further than that and we
find that brothels are legal in some Muslim countries. Indeed,
the governments of one or two Muslim countries impose taxes on
the innete of prostitutes working in such brothels and the
profits made by their owners. On the other hand, many Muslim
countries allow their banks to operate a system based on
interest. It is not permissible for any government to enact
such laws or implement them. Moreover, Muslim citizens who
refuse to observe such laws cannot be prosecuted for their
violation. Similarly an employee who refuses to carry them out
cannot be accused of failing to do his duty. A Muslim
government may issue laws and decrees to regulate those areas
which are left to our discretion. There is indeed a large area
which Islam has left open to different netmunities to regulate
according to their circumstances. A government may determine
the course it wishes its society to map out in these matters.
In such areas, a government may enact a retroactive law if it
determines that such a retroactive effect will serve the best
interest in society. However, a retroactive law is bound to
have some adverse effects on individuals. Those individuals
must be netpensated for any harm which they may suffer as a
result of this retroactive law. They must be rendered harmless,
if justice is to be maintained. It is needless to say that an
Islamic government must always maintain justice. On the
subject of money and finance, it must be clear that Islam
considers the money of every individual as his own private
property which he may use as he wishes, provided that he does
not use it in any way which causes any person, including
himself, any harm. It is not permissible for any individual to
use his money to buy intoxicants, because intoxicants are
harmful to the person who drinks them and to his family and to
society as a whole. Similarly, it is not permissible for anyone
to use his money in gambling because gambling is bound to have
bad effects on the gambler and his family. Similarly, an
individual may not use his money in a way which causes harm to
the netmunity as a whole. Before we go any further, we must
explain that we are using the term “private property” here in a
rather liberal sense. The fact is that our money does not
belong to us as such; it belongs to Allah and He has placed us
in charge of it. However, while this trust is in operation, we
may use the money in our trust as our own, for our own
benefits, provided that we fulfill our Islamic duties, pay
zakah, and give a portion of what we have for charity and we do
not use our money in a harmful way. Furthermore, Islam
guarantees private ownership. If you nete to possess something
in a halal or permissible way, then it is your private property
and no one may take it away from you. Hence, it is open to any
government, particularly an Islamic government to enact a law
which restricts the movement of capital, if it determines that
such a restriction will serve the best interests of the society
as a whole. In this case, the Islamic government is not taking
away the property of individuals, but it is regulating or
restricting certain actions which they may feel inclined to
take, simply because it wants to protect the interest of the
netmunity as a whole. Sometimes, speculators can cause a
terrible harm to the economy of a country while making fat
profits through their speculation. If the government bans such
speculations, it acts within its jurisdiction. Its law must be
obeyed, because it contravenes no Islamic principle. On the
other hand, if the government issues a law which deprives
people from their possessions for no valid reason, then those
who are affected by such a law netmit no offense if they try to
protect their property. Let me give here the example of a
decree which was issued some years back in some Muslim
countries which confiscated or, to use the terminology of that
decree, “put under sequestration” the properties of many rich
individuals for no reason other than the political differences
which existed between the government and those individuals. The
real effect of that law was to give such confiscated property
to army officers and party members who enjoyed them as if they
were their own. From the Islamic point of view, such a law is
unjust and its provisions have no legitimacy. It is true that
the government can implement it because it has the power to do
so. However, once an Islamic government netes into existence in
that country, it should netpensate the individuals who have
been affected by this law for the harm it caused them. The
question of money held outside the country is a tricky one. It
is permissible in the first instance to take one’s money
abroad, if one determines that it is in his interest to do so.
However, if any individuals hold large sums of money abroad,
that may affect the economy of the country, if the government
of a Muslim country wants to guard against such a harmful
effect, it acts within its jurisdiction, if it promulgates a
law preventing its citizens from transferring their money
abroad without a specific permission. It may also be wise to
encourage citizens to repatriate their funds because that is
bound to strengthen the economy. In individual cases, the
government may require a particular citizen to repatriate
whatever money he holds abroad if that person is in debt at
home and he does not have enough funds to pay his debts. If he
had smuggled his money abroad, the government may inflict any
suitable punishment on him until he causes those funds to be
transferred back home. It is only right that he should pay back
his debts, even though he may lose the benefit of having the
money kept abroad. How can he justify his prolonged
indebtedness when the money is being invested somewhere else.
The Prophet has spoken in a highly disapproving manner about
rich people who unnecessarily postpone the repayment of their
debts. Over the years, there have been certain cases where
governments have tried to get funds held by its citizens abroad
to be repatriated in order to strengthen its economy. This is a
legitimate purpose for which governments may offer certain
incentives. There was a case in a particular Muslim country
where the government went as far as overlooking the provisions
of a number of its laws in order to encourage such repatriation
of funds. It promised its people that once they get their money
repatriated, they would not be asked any questions about the
sources from which those funds have been acquired or how they
came to be abroad. It guaranteed for all such people bringing
money from abroad that their funds will not be subjected to any
legal claims or legal action. Since people generally prefer to
have their money close at hand and to have it within their home
countries where they could use it to good purpose, people have
responded by transferring into the country the money they have
held abroad. However, soon afterward, the government went back
on its earlier promise and subjected all such repatriated funds
to legal claims of all sorts. Moreover, they made the new law
retroactive. In other words, the government did not merely stop
the guarantees it had promised, but it rendered them
ineffective from the day they were set in operation. This is
certainly a case of injustice on the part of the government and
such a law is not acceptable from the Islamic point of view.
The government of that Muslim country would have been better
advised if it allowed only ordinary claims, such as those of
creditors to be made against the money transferred into the
country, or rather, against the debtors themselves. It should
not have allowed itself to yield to the temptation of forming a
special tribunal to look into all sorts of justified or
unjustified claims against the money transferred from abroad.
Once it has promised to allow such repatriated funds to be
immune from such action, it should honor its word. However,
the word of the government cannot abrogate a rightful claim of
any person against another. If someone who transferred his
money back home owed part of it to another person, that person
may bring legal action to get his money back, even though the
government does not want him to do so. This is a rightful claim
which cannot be canceled by a government decree.
Our Dialogue ( Source : Arab News – Jeddah )