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128-654: The NASDAQ Dubai region includes the United Arab Emirates and the rest of the Gulf Cooperation Council ( GCC ), the wider Middle East and North Africa, Turkey and the Indian sub-continent . The majority shareholder of NASDAQ Dubai is DFM , which acquired two thirds of the shares in May 2010 from Borse Dubai and NASDAQ OMX Group . Borse Dubai still owns one third of the shares. NASDAQ Dubai

256-589: A National Youth Council , which is represented in the UAE cabinet by the Minister of Youth. The UAE legislative body is the Federal National Council which convenes nationwide elections every four years. The FNC consists of 40 members drawn from all the emirates. Each emirate is allocated specific seats to ensure full representation. Half are appointed by the rulers of the constituent emirates, and

384-741: A financial free zone which opened for business in 2004. Financial activities in the DIFC are governed to international standards by an independent regulator, the Dubai Financial Services Authority. NASDAQ Dubai has a licence from the DFSA to operate an exchange. The President of the DIFC is Sheikh Mohammed bin Rashid Al Maktoum , the UAE Vice President, Prime Minister and Ruler of Dubai. NASDAQ Dubai

512-515: A "borderline transaction" with "very fine lines of distinction" compared to an interest bearing loan, as "susceptible to misuse", and "not an ideal way of financing". He laments that Many institutions financing by way of murabahah determine their profit or mark-up on the basis of the current interest rate, mostly using LIBOR (Inter-bank offered rate in London) as the criterion. Another pioneer, Mohammad Najatuallah Siddiqui , has lamented that "as

640-492: A "vexing problems", according to Muhammad Akran Khan. Others agree it is a problem. According to Ibrahim Warde, Islamic banks face a serious problem with late payments, not to speak of outright defaults, since some people take advantage of every dilatory legal and religious device ... In most Islamic countries, various forms of penalties and late fees have been established, only to be outlawed or considered unenforceable. Late fees in particular have been assimilated to riba. As

768-702: A 13,000-foot-deep (4,000-metre) bore hole taking a year to drill and turning out dry, at the tremendous cost at the time of £1 million. The British set up a development office that helped in some small developments in the emirates. The seven sheikhs of the emirates then decided to form a council to coordinate matters between them and took over the development office. In 1952, they formed the Trucial States Council, and appointed Adi Al Bitar , Dubai's Sheikh Rashid bin Saeed Al Maktoum 's legal advisor, as secretary general and legal advisor to

896-539: A 24-hour curfew, and suspending all Emirates passenger flights. This resulted in a major economic downturn, which eventually led to the merger of more than 50% of the UAE's federal agencies . On 29 August 2020, the UAE established normal diplomatic relations with Israel and with the help of the United States , they signed the Abraham Accords with Bahrain . On 9 February 2021, the UAE achieved

1024-903: A 40-member consultative body appointed by the seven rulers. The UAE joined the Arab League on 6 December 1971 and the United Nations on 9 December. It was a founding member of the Gulf Cooperation Council in May 1981, with Abu Dhabi hosting the first GCC summit . The UAE supported military operations by the US and other coalition states engaged in the war against the Taliban in Afghanistan (2001) and Saddam Hussein in Ba'athist Iraq (2003) as well as operations supporting

1152-463: A Sharia point of view, it avoids extra cost and the problem of a financial institution lacking the expertise to identify the exact or best product or the ability to negotiate a good price. (Also Bay' al-'Inah ). This simple form of murabahah involves the Islamic bank buying some object from the customer (such as their house or motor vehicle) for cash, then selling the object back to the customer at

1280-432: A buyer more time to pay for some product/commodity (deferred payment) in exchange for their paying a higher price is effectively the same as paying interest on a loan, this is incorrect. In fact, just as a buyer may pay more for a product/commodity when the seller has a cleaner shop or more courteous staff, so too the buyer may pay more when given more time to complete payment for that product or commodity. When this happens,

1408-680: A cash loan, but the additional $ 2000 is considered "profit" not "interest" and so not haram according to proponents. According to Islamic banker Harris Irfan, this complication has "not persuaded the majority of scholars that this series of transactions is valid in the Sharia." Because the buying and selling of the commodities in Tawarruq served no functional purpose, banks/financers are strongly tempted to forgo it. Islamic scholars have noticed that while there have been "billions of dollars of commodity-based tawarruq transactions" there have not been

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1536-471: A conservation program on Sir Bani Yas Island initiated by Sheikh Zayed bin Sultan Al Nahyan in the 1970s, resulting in the survival of, for example, Arabian Oryx , Arabian camel , and leopards . Coastal fish and mammals consist mainly of mackerel , perch , and tuna , as well as sharks and whales. The climate of the UAE is subtropical-arid with hot summers and warm winters. The climate

1664-638: A democracy. According to the 2023 V-Dem Democracy indices , the United Arab Emirates is the third least electoral democratic country in the Middle East . The United Arab Emirates comprises seven emirates. The Emirate of Dubai is the most populous emirate with 35.6% of the UAE population. The Emirate of Abu Dhabi has 31.2%, meaning that over two-thirds of the UAE population lives in either Abu Dhabi or Dubai. Abu Dhabi has an area of 67,340 square kilometres (26,000 square miles), which

1792-518: A dialogue partner of the Shanghai Cooperation Organisation . Human rights organisations consider the UAE substandard on human rights, ranking only 6.06 in the human freedom index , citing reports of government critics being imprisoned and tortured, families harassed by the state security apparatus, and cases of forced disappearances . Individual rights such as the freedoms of assembly , association , expression , and

1920-412: A federation of seven hereditary tribal monarchy -styled political units called Sheikhdoms . It is governed by a Federal Supreme Council made up of the ruling Sheikhs of Abu Dhabi , Ajman , Fujairah , Sharjah , Dubai , Ras Al Khaimah , and Umm Al Quwain . All responsibilities not granted to the federal government are reserved to the individual emirate. A percentage of revenues from each emirate

2048-403: A higher price, with payment to be deferred over time. The customer now has cash and will be paying the bank back a larger sum of money over time. This resemblance to a conventional loan has led to bay' al-ina being criticized as a ruse for a cash loan repaid with interest. It was used by a number of modern Islamic financial institutions despite condemnation by jurists, but in recent years its use

2176-583: A historic milestone when its probe, named Hope , successfully reached Mars 's orbit. The UAE became the first country in the Arab world to reach Mars, the fifth country to successfully reach Mars, and the second country, after an Indian probe , to orbit Mars on its maiden attempt. On 14 May 2022, Sheikh Mohamed bin Zayed Al Nahyan was elected as the UAE's new president after the death of Sheikh Khalifa bin Zayed Al Nahyan . The United Arab Emirates

2304-444: A humid southeastern wind known as Sharqi (i.e. "Easterner") makes the coastal region especially unpleasant. The average annual rainfall in the coastal area is less than 120 mm (4.7 in), but in some mountainous areas annual rainfall often reaches 350 mm (13.8 in). Rain in the coastal region falls in short, torrential bursts during the winter months, sometimes resulting in floods in ordinarily dry wadi beds. The region

2432-432: A matching value of commodity being traded. The IMF states that " tawarruq has become controversial among Shari’ah scholars because of its divergence of its use from the spirit of Islamic finance". But some prominent scholars have tolerated commodity murabaha "for the growth of the [Islamic finance] industry". Irfan states that (at least as of 2015) Sharia boards of some banks (such as Abu Dhabi Islamic Bank ), have taken

2560-480: A multistep transaction known as tawarruq, often using commodities traded on the London Metal Exchange" (LME). The basic murabaha transaction is a cost-plus-profit purchase where the item the bank purchases is something the customer wants but does not have cash at the time to buy directly. However, there are other murabaha transactions where the customer wants/needs cash and the product/commodity

2688-446: A murâbaḥah, but this is when the customer is acting as an agent of the bank in buying the good the customer needs financed. [W]here direct purchase from the supplier is not practicable for some reason, it is also allowed that he makes the customer himself his agent to buy the commodity on his behalf. In this case the client first purchases the commodity on behalf of his financier and takes its possession as such. Thereafter, he purchases

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2816-517: A one-third stake in the DIFX and it rebranded to NASDAQ Dubai. The other two-thirds was owned by Borse Dubai , the holding company of NASDAQ Dubai and Dubai Financial Market (DFM). In 2008, NASDAQ Dubai launched the first equity derivatives market in the United Arab Emirates . In 2010, the exchange took a step towards creating a single regional liquidity pool by moving all its equities trading on to DFM's trading platform. The same year DFM acquired

2944-412: A payment". Because murabaha financing is “asset-based” financing (and must be to avoid riba according to orthodox Islamic thinking), it requires financiers to purchase and sell properties. But regulatory frameworks in most countries forbid financial intermediaries such as banks "from owning or trading real properties" (according to scholar Mahmud El-Gamal). Furthermore when the financier holds title to

3072-555: A permanent military base in the emirate of Abu Dhabi. The UAE joined international military operations in Libya in March 2011. On 2 November 2004, the UAE's first president, Sheikh Zayed bin Sultan Al Nahyan , died. Sheikh Khalifa bin Zayed Al Nahyan was elected as the president of the UAE . Sheikh Mohammed bin Zayed Al Nahyan succeeded Sheikh Khalifa as crown prince of Abu Dhabi. In January 2006, Sheikh Maktoum bin Rashid Al Maktoum ,

3200-428: A result of diverting most of its funds towards murabaha, Islamic financial institutions may be failing in their expected role of mobilizing resources for development of the countries and communities they are serving," and even bringing about "a crisis of identity of the Islamic financial movement." Some Muslims (Rakaan Kayali among others) complain that murabaha does not eliminate interest as it guarantees for itself

3328-454: A result, 'debtors know that they can pay Islamic banks last since doing so involves no cost' Warde also complains that "Many businessmen who had borrowed large amounts of money over long periods of time seized the opportunity of Islamicization to do away with accumulated interest of their debt, by repaying only the principal -- usually a puny sum when years of double-digit inflation were taken into consideration. Some suggestions to solve

3456-567: A stand against Tawarruq and were "looking at 'purer' forms of funding" (such as mudarabah ). To "counter the obvious violation of the spirit of the riba ban", some banks have required the complication (and expense) of two additional commodity brokers in addition to the customer and financier. On the other hand, Faleel Jamaldeen states that "commodity murabaha " contracts are used to fund short-term liquidity requirements for Islamic interbank transactions, although they may not use gold, silver, barley, salt, wheat or dates for commodities as this

3584-437: A theory of why sellers are allowed to charge for providing credit to the lender/buyer, but are guilty of riba when charging for late payment. In a true (non-riba) murâbaḥah transaction (Usmani states) "the whole price ... is against a commodity and not against money" and so "... once the price is fixed, it relates to the commodity, and not to the time". Consequently "the price will remain the same and can never be increased by

3712-540: A two-thirds stake in NASDAQ Dubai, with Borse Dubai retaining a one-third stake. In 2011, the exchange transferred its Listing Authority from its own control to that of the Dubai Financial Services Authority. In 2012, the DFSA reduced the minimum market capitalisation for companies to list to US$ 10 million, from US$ 50 million previously. This change has opened the door to listings by small and medium-sized enterprises , including family owned businesses. In 2013,

3840-424: Is "not practicable." Critics/skeptics complain/note that in practice most " murabaḥah " transactions are merely cash-flows between banks, brokers, and borrowers, with no buying or selling of commodities; that the profit or markup is based on the prevailing interest rate used in haram lending by the non-Muslim world; that "the financial outlook" of Islamic murabaha financing and conventional debt/loan financing

3968-403: Is "the same", as is most everything else besides the terminology used. While orthodox Islamic scholars have expressed a lack of enthusiasm for murabaha transactions, calling them "no more than a second best solution" ( Council of Islamic Ideology ) or a "borderline transaction" (Islamic scholar Taqi Usmani), nonetheless they are defended as Islamically permitted. According to Taqi Usmani,

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4096-400: Is "very much limited" according to Harris Irfan. Tawarruq (also called a "reverse murabaha " and sometimes a "commodity murabaha" ) also allows the banking customer to borrow cash instead of finance a purchase, and has also been criticized by some jurists. Unlike a bay al-ina it involves another party in addition to the customer, Islamic bank and seller of the commodity. In Tawarruq

4224-467: Is 86.7% of the country's total area, excluding the islands. It has a coastline extending for more than 400 km (250 mi) and is divided for administrative purposes into three major regions. The Emirate of Dubai extends along the Persian Gulf coast of the UAE for approximately 72 km (45 mi). Dubai has an area of 3,885 square kilometres (1,500 square miles), which is equivalent to 5% of

4352-434: Is allocated to the UAE's central budget. The UAE uses the title Sheikh instead of Emir to refer to the rulers of individual emirates. The title is used due to the sheikhdom styled governing system in adherence to the culture of tribes of Arabia , where Sheikh means leader, elder, or the tribal chief of the clan who partakes in shared decision making with his followers. The president and vice president are elected by

4480-541: Is annually ranked as "Not Free" in Freedom House 's annual Freedom in the World report, which measures civil liberties and political rights. The UAE also ranks poorly in the annual Reporters without Borders ' Press Freedom Index . The Bertelsmann Transformation Index describes the UAE as a "moderate monarchy". The country was ranked 91 out of 137 states and is far below the average scoring for development towards

4608-429: Is at Dubai, although other ports have been dredged at Abu Dhabi, Sharjah, and elsewhere. Numerous islands are found in the Persian Gulf, and the ownership of some of them has been the subject of international disputes with both Iran and Qatar . The smaller islands, as well as many coral reefs and shifting sandbars, are a menace to navigation. Strong tides and occasional windstorms further complicate ship movements near

4736-519: Is categorized as desert climate. The hottest months are July and August, when average maximum temperatures reach above 45 °C (113 °F) on the coastal plain . In the Hajar Mountains, temperatures are considerably lower, a result of increased elevation. Average minimum temperatures in January and February are between 10 and 14 °C (50 and 57 °F). During the late summer months,

4864-447: Is forbidden riba . However according to another Islamic finance promoter—Faleel Jamaldeen -- "murabaha payments represent debt" and because of that are not "negotiable or tradable" as Islamic finance instruments, making them (according to Jamaldeen) unpopular among investors. Hadith also supports use of credit-sales transactions such as murabaḥa . Another scholar, M.O.Farooq, states "it is well-known and supported by many hadiths that

4992-721: Is forbidden under Riba al-Fadl . Among the Islamic banks using Tawarruq (as of 2012) according to Jamaldeen, include the United Arab Bank, QNB Al Islamic, Standard Chartered of United Arab Emirates, and Bank Muaamalat of Malaysia. In the United States the Office of the Comptroller of the Currency —which regulates nationally licensed banks—has allowed murabaha : Interpretive Letter #867. November 1999 ... In

5120-585: Is in the south near the undefined border with Saudi Arabia. About 100 km (62 mi) to the northeast of Liwa is the Al-Buraimi oasis, which extends on both sides of the Abu Dhabi-Oman border. Lake Zakher in Al Ain is a human-made lake near the border with Oman that was created from treated waste water. Prior to withdrawing from the area in 1971, Britain delineated the internal borders among

5248-518: Is jointly controlled by Oman and Ajman, the other by Fujairah and Sharjah. There is an Omani exclave surrounded by UAE territory, known as Wadi Madha . It is located halfway between the Musandam peninsula and the rest of Oman in the Emirate of Sharjah . It covers approximately 75 square kilometres (29 square miles) and the boundary was settled in 1969. The north-east corner of Madha is closest to

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5376-640: Is located in the Dubai International Financial Centre , a financial free zone . The exchange is regulated by the Dubai Financial Services Authority . The exchange launched on 26 September 2005 under the name Dubai International Financial Exchange (DIFX), which initially listed equities and index products. In 2007, the exchange listed the largest IPO in the Middle East, when DP World raised US$ 4.96 billion. In 2008, NASDAQ OMX acquired

5504-553: Is prone to occasional, violent dust storms , which can severely reduce visibility. On 28 December 2004, snow was recorded in the UAE for the first time, in the Jebel Jais mountain cluster in Ras al-Khaimah. A few years later, there were more sightings of snow and hail. The Jebel Jais mountain cluster has experienced snow only twice since records began. The United Arab Emirates is a federal constitutional monarchy made up from

5632-823: Is regulated by the Dubai Financial Services Authority , this structure falls into a number of different categories: United Arab Emirates in the Arabian Peninsula The United Arab Emirates ( UAE ), or simply the Emirates , is a country in West Asia , in the Middle East , at the eastern end of the Arabian Peninsula . It is a federal , elective monarchy composed of seven emirates , with Abu Dhabi as its capital. It shares land borders with Oman to

5760-704: Is similar to a rent-to-own arrangement in the non-Muslim world, with the intermediary (e.g., the lending bank) retaining ownership of the item being sold until the loan is paid in full. There are also Islamic investment funds and sukuk (Islamic bonds) that use murabahah contracts. The purpose of murabaha is to finance a purchase without involving interest payments, which most Muslims (particularly most scholars) consider riba ( usury ) and thus haram (forbidden). Murabaha has come to be "the most prevalent" or "default" type of Islamic finance. A proper murâbaḥah transaction differs from conventional interest-charging loans in several ways. The buyer/borrower pays

5888-568: Is situated in the Middle East , bordering the Gulf of Oman and the Persian Gulf , between Oman and Saudi Arabia ; it is in a strategic location slightly south of the Strait of Hormuz , a vital transit point for world crude oil . The UAE lies between 22°30' and 26°10' north latitude and between 51° and 56°25′ east longitude. It shares a 530-kilometre (330 mi) border with Saudi Arabia on

6016-527: Is that "if the client defaults in payment of the price at the due date, the price cannot be increased". According to one source (Mushtak Parker), Islamic financial institutions "have long tried to grapple with the issue of delayed payments or defaults, but thus far there is no universal consensus across jurisdictions in this respect." ) In its 1980 Report on the Elimination of Interest from the Economy ,

6144-501: Is the chief executive branch of the government presided over by the prime minister. The prime minister, who is appointed by the Federal Supreme Council , appoints the ministers. The Council of Ministers is made up of 22 members and manages all internal and foreign affairs of the federation under its constitutional and federal law. In December 2019, the UAE became the only Arab country, and one of only five countries in

6272-488: Is the most spoken language and the language of business. The United Arab Emirates' oil and natural gas reserves are the world's seventh and seventh-largest , respectively. Zayed bin Sultan Al Nahyan , ruler of Abu Dhabi and the country's first president, oversaw the development of the Emirates by investing oil revenues into healthcare, education, and infrastructure. The country has the most diversified economy among

6400-460: The Council of Islamic Ideology of Pakistan stated that murabahah should Murâbaḥah is one of three types of bayu-al-amanah (fiduciary sale), requiring an "honest declaration of cost". (The other two types are tawliyah —sale at cost—and wadiah —sale at specified loss.) According to Taqi Usmani "in exceptional cases" an Islamic bank or financial institution may lend cash to the customer for

6528-762: The Federal Supreme Council . Usually, the Head of the Al Nahyan family, who are based in Abu Dhabi, holds the presidency and the Head of the Al Maktoum family, based in Dubai, the prime ministership. All prime ministers but one have served concurrently as vice president. The federal government is composed of three branches: The UAE e-Government is the extension of the UAE federal government in its electronic form. The UAE's Council of Ministers ( Arabic : مجلس الوزراء )

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6656-532: The Royal Navy to defend the sheikhdoms . On 24 January 1968, British Prime Minister Harold Wilson announced the government's decision, reaffirmed in March 1971 by Prime Minister Edward Heath , to end the treaty relationships with the seven trucial sheikhdoms. Days after the announcement, the ruler of Abu Dhabi, Sheikh Zayed bin Sultan Al Nahyan , fearing vulnerability, tried to persuade the British to honour

6784-648: The United Kingdom represented Abu Dhabi and Oman in their dispute with Saudi Arabia over the Buraimi Oasis . A 1974 agreement between Abu Dhabi and Saudi Arabia seemed to have settled the Abu Dhabi-Saudi border dispute , but this has not been ratified. The UAE's border with Oman was ratified in 2008. PDTC continued its onshore exploration away from the disputed area, drilling five more bore holes that were also dry. However, on 27 October 1960,

6912-631: The Wadi Suq culture from 2,000 to 1,300 BCE. From 1,200 BCE to the advent of Islam in Eastern Arabia, through three distinctive Iron Ages and the Mleiha period, the area was variously occupied by the Achaemenids and other forces, and saw the construction of fortified settlements and extensive husbandry thanks to the development of the falaj irrigation system. The spread of Islam to

7040-663: The Arabian Peninsula under the newly emerging Rashidun Caliphate . In 637, Julfar (in the area of today's Ras Al Khaimah ) was an important port that was used as a staging post for the Islamic invasion of the Sasanian Empire . The area of the Al Ain / Buraimi Oasis was known as Tu'am and was an important trading post for camel routes between the coast and the Arabian interior. The earliest Christian site in

7168-528: The British promised to protect the Trucial Coast from all aggression by sea and to help in case of land attack. British maritime policing meant that pearling fleets could operate in relative security. However, the British prohibition of the slave trade meant an important source of income was lost to some sheikhs and merchants. In 1869, the Qubaisat tribe settled at Khor Al Adaid and tried to enlist

7296-535: The British treaty relationship was to expire in December of that year. Fears of vulnerability were realised the day before independence. An Iranian destroyer group broke formation from an exercise in the lower Gulf, sailing to the Tunb islands . The islands were taken by force, civilians and Arab defenders alike allowed to flee. A British warship stood idle during the course of the invasion. A destroyer group approached

7424-479: The British-Trucial Sheikhdoms treaty expired on 1 December 1971, both emirates became fully independent. On 2 December 1971, six of the emirates (Abu Dhabi, Ajman, Dubai, Fujairah, Sharjah, and Umm Al Quwain) agreed to enter into a union named the United Arab Emirates. Ras al-Khaimah joined later, on 10 January 1972. In February 1972, the Federal National Council (FNC) was created; it was

7552-474: The GCC. The exchange is the third largest in the world for listed Sukuk by value and conventional bonds are also listed. Equity derivatives can be traded. The exchange operates a Murabaha platform for Islamic financing. The trading hours of NASDAQ Dubai are from 10:00 am to 3:00 pm (06:00 am to 11:00 am GMT) from Monday to Friday. NASDAQ Dubai is located in the Dubai International Financial Centre (DIFC),

7680-518: The Global War on Terror for the Horn of Africa at Al Dhafra Air Base located outside of Abu Dhabi. The air base also supported Allied operations during the 1991 Persian Gulf War and Operation Northern Watch . The country had already signed a military defence agreement with the U.S. in 1994 and one with France in 1995. In January 2008, France and the UAE signed a deal allowing France to set up

7808-624: The Greater and the Lesser Tunbs, when Iran captured them during the British rule, resulting in disputes with Iran that remain unresolved. The UAE also disputes claim on other islands against the neighboring state of Qatar. The largest emirate, Abu Dhabi , accounts for 87% of the UAE's total area, 67,340 square kilometres (26,000 sq mi). The smallest emirate, Ajman , encompasses only 259 km (100 sq mi). The UAE coast stretches for nearly 650 km (404 mi) along

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7936-487: The Gulf . British expeditions to protect their Indian trade routes led to campaigns against Ras Al Khaimah and other harbours along the coast, including the Persian Gulf campaign of 1809 and the more successful campaign of 1819 . The following year, Britain and a number of local rulers signed a maritime truce , giving rise to the term Trucial States , which came to define the status of the coastal emirates. A further treaty

8064-605: The Khor Fakkan-Fujairah road, barely 10 metres (33 feet) away. Within the Omani exclave of Madha, is a UAE exclave called Nahwa , also belonging to the Emirate of Sharjah. It is about eight kilometres (5.0 miles) on a dirt track west of the town of New Madha. It consists of about forty houses with its own clinic and telephone exchange. Murabaha Murabaḥah , murabaḥa , or murâbaḥah ( Arabic : مرابحة , derived from ribh Arabic : ربح , meaning profit)

8192-517: The Pakistan Federal Shariat Court ruled that the "mark-up system ... in vogue" among banks in Pakistan was against the Islamic injunctions. Usmani noted (much like the complaints above) that the Pakistani banks failed to follow proper murabaha requirements—not actually buying a commodity or buying one "already owned by the customer". While in conventional finance late payments/delinquent loans are discouraged by accumulating interest, in Islamic finance control and management of late accounts has become

8320-455: The Persian Gulf region. By the 18th century, the Bani Yas confederation was the dominant force in most of the area now known as Abu Dhabi, while the Northern Al Qawasim (Al Qasimi) dominated maritime commerce. The Portuguese maintained an influence over the coastal settlements, building forts in the wake of the bloody 16th-century conquests of coastal communities by Albuquerque and the Portuguese commanders who followed him – particularly on

8448-474: The Prophet had entered into credit-purchase transactions ( nasi'ah ) and also that he paid more than the original amount" in his repayment. Usmani states that "this position" is accepted "unanimously" by the "four [ Sunni ] schools" of Islamic law and "the majority" of the Muslim jurists. Murabahah and related fixed financing has been approved by a number of government reports in the Islamic Republic of Pakistan on how to eliminate Interest. Usmani presents

8576-410: The SPVs entail extra costs usually not borne in conventional finance. An example of a murabaha contract is: Adam approaches a Murabaha Bank in order to finance the purchase of a $ 10,000 automobile from “Cash-Only-Automobiles”. The bank agrees to purchase the automobile from “Cash-Only-Automobiles” for $ 10,000 and then sell it to Adam for $ 12,000 which is to be paid by Adam in equal installments over

8704-412: The Trucial States. In 1922, the British government secured undertakings from the rulers of the Trucial States not to sign concessions with foreign companies without their consent. Aware of the potential for the development of natural resources such as oil, following finds in Persia (from 1908) and Mesopotamia (from 1927), a British-led oil company, the Iraq Petroleum Company (IPC), showed an interest in

8832-443: The UAE was first discovered in the 1990s, an extensive monastic complex on what is now known as Sir Bani Yas Island and which dates back to the seventh century. Thought to be Nestorian and built in 600 CE, the church appears to have been abandoned peacefully in 750 CE. It forms a rare physical link to a legacy of Christianity, which is thought to have spread across the peninsula from 50 to 350 CE following trade routes. Certainly, by

8960-419: The Upper Thamama rock formation. This was the first commercial discovery of the Trucial Coast, leading to the first exports of oil in 1962. ADMA made further offshore discoveries at Zakum and elsewhere, and other companies made commercial finds such as the Fateh oilfield off Dubai and the Mubarak field off Sharjah (shared with Iran). Meanwhile, onshore exploration was hindered by territorial disputes. In 1955,

9088-437: The amount of profit it collects, and so amounts to a Ḥiyal or legal "trick" to defeat the intent of shariah. Khalid Zaheer considers it an example of how two classical shariah-compliant contracts ( Murabahah and Bai Muajjal ) can be combined to form a contract that is not compliant. Non-orthodox critics of murâbaḥah , have found the distinction of setting a price "against a commodity" as opposed to "against money" — with

9216-582: The attempt of the establishment of an Islamist state in the UAE. Mindful of the protests in nearby Bahrain, in November 2012 the UAE outlawed online mockery of its government or attempts to organise public protests through social media. On 29 January 2020, the COVID-19 pandemic was confirmed to have reached the UAE . Two months later, in March, the government announced the closure of shopping malls, schools, and places of worship, in addition to imposing

9344-507: The bank buys is a means to an end. (Thus violating the requirement spelled out by Usmani and others.) In addition to being used by Islamic banks, murabahah contracts have been used by Islamic investment funds (such as SHUAA Capital of Saudi Arabia and Al Bilad Investment Company), and sukuk (also called Islamic bonds)(an example being a 2005 sukuk issued by Arcapita Bank sukuk in 2005). (Also called Bai' muajjal abbreviated BBA, and known as credit sale or deferred payment sale). Reportedly

9472-416: The bank on behalf of the customer, so that "all that changes hands is papers being signed and then handed back" according to one researcher). An example would be buying $ 10,000 worth of copper on credit for $ 12,000 to be paid over two years, and immediately selling that copper to the third party spot buyer for $ 10,000 in cash. There are additional fees involved for the commodity purchases and sales compared to

9600-521: The bank's balance sheet) and sometimes there are no commodities at all, merely cash-flows between banks, brokers and borrowers. Often the commodity is completely irrelevant to the borrower's business and not even enough of the relevant commodities are in existence in the world to account for all the transactions taking place. Frank Vogel and Samuel Hayes also note multi-billion-dollar murabaha transactions in London "popular for many years", where "many doubt

9728-493: The banks truly assume possession, even constructively, of inventory". Islamic banker Irfan bemoans the fact that "not only is the murabaha money market insufficiently well developed and illiquid, but the very sharia compliance of it has come to be questioned", often by Islamic scholars not known for their strictness. Nejatullah Siddiqi warned the Islamic banking community that the alleged difference between modes of finance based on murabahah , bay' salam and conventional loans

9856-493: The buyer has "deliberately refused" to make a payment. For the rate of markup, murabaha contracts "may openly use" riba interest rates such as LIBOR "as a benchmark", a practice approved of by the scholar Taqi Usmani . Conservative scholars promoting Islamic finance consider murabaha to be a "transitory step" towards a "true profit-and-loss-sharing mode of financing ", and a "weak" or "permissible but undesirable" form of finance to be used where profit-and-loss-sharing

9984-418: The commodity from the financier for a deferred price. The idea that the seller may not use murâbaḥah if profit-sharing modes of financing such as mudarabah or musharakah are practicable, is supported by other scholars that those in the Council of Islamic Ideology . But these involve risks of loss, profit-sharing modes of financing cannot guarantee banks income. Murabahah , with its fixed margin, offers

10112-549: The company discovered oil in commercial quantities at the Murban No. 3 well on the coast near Tarif. In 1962, PDTC became the Abu Dhabi Petroleum Company . As oil revenues increased, the ruler of Abu Dhabi, Zayed bin Sultan Al Nahyan , undertook a massive construction program, building schools, housing, hospitals, and roads. When Dubai's oil exports commenced in 1969, Sheikh Rashid bin Saeed Al Maktoum ,

10240-480: The cost price of the item being financed is not a condition of the contract. One variation on murabahah (known as "Murabahah to the Purchase Orderer" according to Muhammad Tayyab Raza) allows the customer to serve as the "agent" of the bank, so that the customer buys the product using the bank's borrowed funds. The customer then repays the bank similar to a cash loan. While this is not "preferable" from

10368-437: The council. The council was terminated once the United Arab Emirates was formed. The tribal nature of society and the lack of definition of borders between emirates frequently led to disputes, settled either through mediation or, more rarely, force. The Trucial Oman Scouts was a small military force used by the British to keep the peace. In 1953, a subsidiary of BP , D'Arcy Exploration Ltd, obtained an offshore concession from

10496-426: The country's total area, excluding the islands. The Emirate of Sharjah extends along approximately 16 km (10 mi) of the UAE's Persian Gulf coastline and for more than 80 km (50 mi) into the interior. The northern emirates which include Fujairah, Ajman, Ras al-Khaimah, and Umm al-Qaiwain all have a total area of 3,881 square kilometres (1,498 square miles). There are two areas under joint control. One

10624-497: The current financial marketplace lending takes many forms . ... murabaha financing proposals are functionally equivalent to or a logical outgrowth of secured real estate lending and inventory and equipment financing, activities that are part of the business of banking. Orthodox Islamic Scholars such as Taqi Usmani emphasize that murâbaḥah should only be used as a structure of last resort where profit and loss sharing instruments are unavailable. Usmani himself describes murâbaḥah as

10752-402: The customer would buy some amount of a commodity (a commodity which is not a "medium of exchange" or forbidden in riba al-fadl such as gold, silver, wheat, barley, salt, etc.) from the bank to be paid in installments over a period of time and sell that commodity on the spot market (the commodity buyer being the additional party) for cash. (The commodity buying and selling is usually done by

10880-428: The east and northeast, and with Saudi Arabia to the southwest; as well as maritime borders in the Persian Gulf with Qatar and Iran , and with Oman in the Gulf of Oman . As of 2024 , the UAE has an estimated population of over 10 million, of which 11% are Emiratis; Dubai is the most populous city and is an international hub. Islam is the official religion and Arabic is the official language, while English

11008-493: The east coast at Muscat , Sohar , and Khor Fakkan . The southern coast of the Persian Gulf was known to the British as the " Pirate Coast ", as boats of the Al Qawasim federation harassed British-flagged shipping from the 17th century into the 19th. The charge of piracy is disputed by modern Emirati historians, including the current ruler of Sharjah, Sheikh Sultan Al Qasimi , in his 1986 book The Myth of Arab Piracy in

11136-512: The emirates contested jurisdiction over more than a dozen enclaves. The UAE contains the following terrestrial ecoregions: Al Hajar montane woodlands and shrublands, Gulf of Oman desert and semi-desert , and Al-Hajar foothill xeric woodlands and shrublands . The oases grow date palms , acacia , and eucalyptus trees. In the desert, the flora is very sparse and consists of grasses and thorn bushes. The indigenous fauna had come close to extinction because of intensive hunting, which has led to

11264-705: The establishment of seasonal and semi-seasonal settlements and centres. These formed tribal groupings whose names are still carried by modern Emiratis, including the Bani Yas and Al Bu Falah of Abu Dhabi , Al Ain, Liwa , and the west coast; the Dhawahir , Awamir, Al Ali , and Manasir of the interior; the Sharqiyin of the east coast; and the Qawasim to the north. With the expansion of European colonial empires , Portuguese, English, and Dutch forces appeared in

11392-470: The exact cost of the item(s) cannot be or are not ascertained, they are sold on the basis of musawamah (bargaining). Different banks use this instrument in varying ratios. Typically, banks use murabaha in asset financing, property, microfinance and commodity import-export. The International Monetary Fund reports that, Murâbaḥah transactions are "widely used to finance international trade, as well as for interbank financing and liquidity management through

11520-538: The exchange launched a fixed income trading platform, allowing investors to trade Sukuk and conventional bonds on-exchange. In October 2013, the Bank of London and The Middle East (BLME) listed its shares on the exchange. In April 2014, Emirates REIT listed its shares following its IPO, in the first listing of a Real Estate Investment Trust (REIT) on an exchange in the GCC . Emirates REIT raised 201 million dollars and

11648-471: The extra they pay is not riba but just "an ancillary factor to determining the price". In such a case, according to Usmani, the "price is against a commodity and not against money" — and so permitted in Islam. When a credit transaction is made without the purchase of a specific commodity or product, (i.e. a loan is made charging interest), the added charge for deferred payment is for "nothing but time", and so

11776-405: The fifth century, Oman had a bishop named John – the last bishop of Oman being Etienne, in 676 CE. The harsh desert environment led to the emergence of the "versatile tribesman", nomadic groups who subsisted due to a variety of economic activities, including animal husbandry, agriculture, and hunting. The seasonal movements of these groups led not only to frequent clashes between groups but also to

11904-408: The first being allow and the second forbidden because "money has no intrinsic utility" — abstract or suspicious. According to El-Gamal it has been called "merely inefficient lending". However criticism of the transaction has been primarily levied against its application. Critics complain that in most real world murâbaḥah transactions the commodities never change hands (the commodity never appears on

12032-645: The freedom of the press are severely repressed. Stone tools recovered reveal a settlement of people from Africa some 127,000 years ago and a stone tool used for butchering animals discovered on the Arabian coast suggests an even older habitation from 130,000 years ago. In time, lively trading links developed with civilisations in Mesopotamia , Iran, and the Harappan culture of the Indus Valley. This contact persisted and became wider, probably motivated by

12160-639: The island of Abu Musa as well. But there, Sheikh Khalid bin Mohammed Al Qasimi had already negotiated with the Iranian shah, and the island was quickly leased to Iran for $ 3 million a year. Meanwhile, Saudi Arabia laid claim to swathes of Abu Dhabi. Originally intended to be part of the proposed Federation of Arab Emirates, Bahrain became independent in August, and Qatar in September 1971. When

12288-404: The members of the Gulf Cooperation Council (GCC). In the 21st century, the UAE has become less reliant on oil and gas and is economically focusing on tourism and business. The UAE is considered a middle power . It is also a member of the United Nations , Arab League , Organisation of Islamic Cooperation , OPEC , Non-Aligned Movement , World Trade Organization , and BRICS . The UAE is also

12416-590: The most popular mode of Islamic financing is cost-plus murabaha in a credit sale setting ( Bay bithaman 'ajil ) with "an added binding promise on the customer to purchase the property, thus replicating secured lending in `Shari'a compliant` manner." The concept was developed by Sami Humud, and shortly after it became popular Islamic Banking began its strong growth in the late 1970s. Another source (Skrine law firm) distinguishes between Murabahah and Bay' bithaman 'ajil (BBA) banking products, saying that in BBA disclosure of

12544-625: The new Islamic communities south of the Persian Gulf threatened to disintegrate, with insurrections against the Muslim leaders . Caliph Abu Bakr sent an army from the capital Medina which completed its reconquest of the territory ( the Ridda Wars ) with the Battle of Dibba in which 10,000 lives are thought to have been lost. This assured the integrity of the Caliphate and the unification of

12672-456: The northeastern tip of the Arabian Peninsula is thought to have followed directly from a letter sent by the Islamic prophet Muhammad to the rulers of Oman in 630 CE. This led to a group of rulers travelling to Medina , converting to Islam, and subsequently driving a successful uprising against the unpopular Sassanids , who dominated the coast at the time. Following the death of Muhammad,

12800-451: The objection of the infidels ... was that when they increase the price at the initial stage of sale, it has not been held as prohibited but when the purchaser fails to pay on the due date, and they claim an additional amount for giving him more time, it is termed as "riba" and haram. The Holy Qur'an answered this objection by saying: "Allah has allowed sale and forbidden riba." Usmani states that while it may appear to some people that allowing

12928-469: The other half are elected. By law, the council members have to be equally divided between males and females. The FNC is restricted to a largely consultative role. The United Arab Emirates is an authoritarian federal monarchy . According to the New York Times , the UAE is "an autocracy with the sheen of a progressive, modern state". The UAE has been described as a "tribal autocracy" where

13056-550: The people of the Persian Gulf. The First World War had a severe impact on the industry, but it was the economic depression of the late 1920s and early 1930s, coupled with the invention of the cultured pearl , that wiped out the trade. The remnants of the trade eventually faded away shortly after the Second World War , when the newly independent Government of India imposed heavy taxation on imported pearls. The decline of pearling resulted in extreme economic hardship in

13184-511: The prime minister of the UAE and the ruler of Dubai, died, and Sheikh Mohammed bin Rashid Al Maktoum assumed both roles. The first ever national elections were held on 16 December 2006. A number of voters chose half of the members of the Federal National Council . The UAE has largely escaped the Arab Spring , which other countries have experienced; however, 60 Emirati activists from Al Islah were apprehended for an alleged coup attempt and

13312-468: The problem include having the government or the central bank penalizing defaultors "by depriving them" of the use of "any financial institution" until they paid up (Taqi Usmani in Introduction to Islamic Finance ) -- although this would require a completely Islamized society. Collecting late fees but donating them to charity, Collecting late fees only when the buyer "has deliberately refused to make

13440-435: The property being sold it can be lost "if the financier is sued, loses, and declares bankruptcy", and this can happen when a customer has paid off most /almost all of the product/property’s price. To avoid these dangers SPVs ( Special Purpose Vehicles ) are created to hold title to the property and also "serve as parties to various agreements regarding obligations for repairs and insurance" as required by Islamic jurists. However,

13568-482: The protection treaties by offering to pay the full costs of keeping the British Armed Forces in the Emirates. The British Labour government rejected the offer. After Labour MP Goronwy Roberts informed Sheikh Zayed of the news of British withdrawal, the nine Persian Gulf sheikhdoms attempted to form a union of Arab emirates, but by mid-1971 they were still unable to agree on terms of union even though

13696-462: The reference to permitted "trade" or "trafficking" in Quran aya 2:275: "... they say, 'Trafficking (trade) is like usury,' [but] God has permitted trafficking, and forbidden usury .." refers to credit sales such as murabaha , the "forbidden usury" refers to charging extra for late payment ( late fees ), and the "they" refers to non-Muslims who didn't understand why if one was allowed both were not:

13824-613: The region. The Anglo-Persian Oil Company (APOC, later to become British Petroleum , or BP) had a 23.75% share in IPC. From 1935, onshore concessions to explore for oil were granted by local rulers, with APOC signing the first one on behalf of Petroleum Concessions Ltd (PCL), an associate company of IPC. APOC was prevented from developing the region alone because of the restrictions of the Red Line Agreement , which required it to operate through IPC. A number of options between PCL and

13952-551: The ruler of Abu Dhabi. BP joined with Compagnie Française des Pétroles (later Total ) to form operating companies, Abu Dhabi Marine Areas Ltd (ADMA) and Dubai Marine Areas Ltd (DUMA). A number of undersea oil surveys were carried out, including one led by the famous marine explorer Jacques Cousteau . In 1958, a floating platform rig was towed from Hamburg , Germany , and positioned over the Umm Shaif pearl bed, in Abu Dhabi waters, where drilling began. In March, it struck oil in

14080-469: The ruler of Dubai, was able to invest the revenues from the limited reserves found to spark the diversification drive that would create the modern global city of Dubai. By 1966, it had become clear that the British government could no longer afford to administer and protect the Trucial States , what is now the United Arab Emirates. British Members of Parliament (MPs) debated the preparedness of

14208-600: The seller (i.e. the bank/financier) a more predictable income stream. One estimate is that 80% of Islamic lending is by murabahah . M. Kabir Hassan reports that murabaha accounts are quite profitable. As of 2005, "the average cost efficiency" for murabaha was "74%, whereas average profit efficiency" even higher at 84%. Hassan states, "although Islamic banks are less efficient in containing cost, they are generally efficient in generating profit." Islamic banker and author Harris Irfan writes that use of murabaha "has become so distorted from its original intent that it has become

14336-433: The seller." If the price had "been against time", (which is forbidden) "it might have been increased, if the seller allows ... more time" for repayment when the bill is past due. (Usmani and other Islamic finance scholars agree that not being able to penalize a lender/buyer for late payment has led to late payments in murâbaḥah and other Islamic finance transactions. Usmani states that a "problem" of murabahah financing

14464-515: The seller/lender at an agreed-upon higher price; instead of interest charges, the seller/lender makes a religiously permissible "profit on the sale of goods". The seller/financer must take actual possession of the good before selling it to the customer, and must assume "any liability from delivering defective goods". Sources differ as to whether the seller is permitted to charge extra when payments are late, with some authors stating any late fees ought to be donated to charity, or not collected unless

14592-445: The seven constituent monarchies are led by tribal rulers in an autocratic fashion. There are no democratically elected institutions, and there is no formal commitment to free speech. According to human rights organisations, there are systematic human rights violations, including the torture and forced disappearance of government critics. The UAE ranks poorly in freedom indices measuring civil liberties and political rights . The UAE

14720-517: The seven emirates in order to preempt territorial disputes that might hamper formation of the federation. In general, the rulers of the emirates accepted the British interventions, but in the case of boundary disputes between Abu Dhabi and Dubai, and also between Dubai and Sharjah, conflicting claims were not resolved until after the UAE became independent. The most complicated borders were in the Western Hajar Mountains , where five of

14848-650: The shore. The UAE also has a stretch of the Al Bāţinah coast of the Gulf of Oman. The Musandam Peninsula , the very tip of Arabia by the Strait of Hormuz, and Madha are exclaves of Oman separated by the UAE. South and west of Abu Dhabi, vast, rolling sand dunes merge into the Rub al-Khali (Empty Quarter) of Saudi Arabia. The desert area of Abu Dhabi includes two important oases with adequate underground water for permanent settlements and cultivation. The extensive Liwa Oasis

14976-472: The single most common method of funding inter-bank liquidity and corporate loans in the Islamic finance industry." A number of economists have noted the dominance of murabahah in Islamic finance, despite its theological inferiority to profit and loss sharing. One scholar has coined the term "the murabaha syndrome" to describe this. The accounting treatment of murâbaḥah, and its disclosure and presentation in financial statements, vary from bank to bank. If

15104-455: The southern shore of the Persian Gulf , briefly interrupted by an isolated outcrop of the Sultanate of Oman. Six of the emirates are situated along the Persian Gulf, and the seventh, Fujairah, is on the eastern coast of the peninsula with direct access to the Gulf of Oman. Most of the coast consists of salt pans that extend 8–10 km (5.0–6.2 mi) inland. The largest natural harbor

15232-688: The support of the Ottomans. Khor Al Adaid was claimed by Abu Dhabi at that time, a claim supported by the British. In 1906, the British Political Resident, Percy Cox , confirmed in writing to the ruler of Abu Dhabi, Zayed bin Khalifa Al Nahyan ('Zayed the Great'), that Khor Al Adaid belonged to his sheikhdom. During the 19th and early 20th centuries, the pearling industry thrived, providing both income and employment to

15360-443: The third largest venue in the world for Sukuk listings. Products listed on NASDAQ Dubai include ordinary shares listed by DP World . DP World was the largest IPO in the Middle East raising $ 4.96 billion until Saudi Aramco 's IPO . It was 15x oversubscribed and is one of the most valued companies in the region. In 2014, Emirates REIT carried out an IPO on the exchange, becoming the first Real Estate Investment Trust to list in

15488-637: The trade in copper from the Hajar Mountains , which commenced around 3,000 BCE. Sumerian sources talk of the Magan civilisation, which has been identified as encompassing the modern UAE and Oman. There are six periods of human settlement with distinctive behaviours in the region before Islam, which include the Hafit period from 3,200 to 2,600 BCE, the Umm Al Nar culture from 2,600 to 2,000 BCE, and

15616-410: The trucial rulers were signed, providing useful revenue for communities experiencing poverty following the collapse of the pearl trade. However, the wealth of oil which the rulers could see from the revenues accruing to surrounding countries remained elusive. The first bore holes in Abu Dhabi were drilled by IPC's operating company, Petroleum Development (Trucial Coast) Ltd (PDTC) at Ras Sadr in 1950, with

15744-498: The west, south, and southeast, and a 450-kilometre (280 mi) border with Oman on the southeast and northeast. The land border with Qatar in the Khor Al Adaid area is about nineteen kilometres (12 miles) in the northwest; however, it is a source of ongoing dispute . Following Britain's military departure from the UAE in 1971, and its establishment as a new state, the UAE laid claim to Iranian-occupied islands of Abu Musa and

15872-481: The world, to attain gender parity in a national legislative body, with its lower house 50 per cent women. The UAE is the only country in the world that has a Ministry of Tolerance , a Ministry of Happiness , and a Ministry of Artificial Intelligence. The UAE also has a virtual ministry called the Ministry of Possibilities, designed to find solutions to challenges and improve quality of life. The UAE also has

16000-437: Was 3.5 times oversubscribed. In the same month, the exchange launched an Islamic financing Murabaha platform. This offers an alternative to many traditional Murabaha solutions, which can carry a risk of losses through price movements, spreads and poor liquidity as well as delays. In June 2014, NASDAQ Dubai had 28 current Sukuk listings with a total nominal value of US$ 18.3 billion, which made Dubai (NASDAQ Dubai plus DFM)

16128-483: Was even less than it appeared: Some of these modes of finance are said to contain some elements of risk, but all these risks are insurable and are actually insured against. The uncertainty or risk to which the business being so financed is exposed is fully passed over to the other party. A financial system built solely around these modes of financing can hardly claim superiority over an interest-based system on grounds of equity, efficiency, stability and growth. Circa 1999

16256-506: Was originally a term of fiqh (Islamic jurisprudence) for a sales contract where the buyer and seller agree on the markup (profit) or " cost-plus " price for the item(s) being sold. In recent decades it has become a term for a very common form of Islamic (i.e., " shariah compliant") financing , where the price is marked up in exchange for allowing the buyer to pay over time—for example with monthly payments (a contract with deferred payment being known as bai-muajjal ). Murabaha financing

16384-496: Was signed in 1843 and in 1853, the Perpetual Maritime Truce was agreed. To this was added the 'Exclusive Agreements', signed in 1892, which made the Trucial States a British protectorate. Under the 1892 treaty, the trucial sheikhs agreed not to dispose of any territory except to the British and not to enter into relationships with any foreign government other than the British without their consent. In return,

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