Australian Islamist Monitor

Islam Under Scrutiny

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Demystifying Sharia finance in Australia

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Recently we have witnessed the Federal Government's white paper on the implementation of Sharia compliant finance in Australia, funnily enough around the same time as the terrorism white paper that finally recognised the home grown threat from certain 'extremist' elements in society.  Unfortunately for the Minister for Economic Dhimmification, Simon Crean, there will be a lot more said about this initiative as he tries to pass the relevant hate laws through.  After working in Islamic finance in the Gulf for a number of years I hope I can provide a few more useful facts for those keeping this fight up. 

As you know every aspect of Islam was plagiarised from the Jews, Christians and pagans (besides the hate and perpetual violence and the bits plagiarised from others) and "Islamic Finance" is no exception.  The concept of interest (usury) being bad for society is a long held Jewish idea, continued by the Christians and well before that opined on by Aristotle and his Greek mates.  The structures used today were developed in the 4th and 5th century by Christian merchants and had been in use in one form or another until the Reformation.  This form of finance was appropriated by Islam in the 20th century and as everyone else has moved on from the Dark and Middle Ages it seems to be theirs now.  Of course it's all part of the desperate need to push through Islamification and increase Western money being channelled into the Islamic world.

Firstly, there is a misconception sometimes that Islamic finance contracts will be 'governed by Sharia law'.  The finance contracts will be governed by Australian laws (to the extent there is a difference for now) and therefore tax laws will need to adapt to make 'Sharia compliant' finance viable in Australia.  There may also need to be regulatory changes to allow Islamic Banks to operate in Australia.  This may seem harmless to the dhimwits as Sharia compliant finance itself is not inconsistent with Australian law however this is the express action of changing Australian laws to accommodate Sharia.  Is this therefore the first step on the road to Sharia law? Of course it is and that road is a highway to hell!

When there's millions of dollars of a Bank's money at stake they are suddenly capable of facing reality and want their contracts governed by a developed English common law system.  If Australian Banks really wanted to be all Sharia they could, for example, have the Jurisdiction and Governing law clauses as 'arbitration at the International Islamic Centre for Reconciliation and Arbitration in Bahrain applying the principles of Sharia'.  They could then enforce that arbitration decision in Australia pursuant to the New York Convention.  But there's money at stake!  Little do these Australian Banks know that they wont have a choice soon but to submit wholehartedly to Sharia law dispute resolution thanks in no small part to their role in Islamification.

We also need to expose the lies of the apologists who propogate this as some form of economically ethical finance.  Lets take for example a Musharaka structure.  The idea is that the Bank and the Borrower are 'partners' in a type of joint venture, the Bank contributes the cash and the Borrower the expertise and any contributions in kind or equity as required.  The Bank therefore will only lend in theory to viable ventures and reputable persons as it is a partner in the deal and liable to share losses.  The reality is that all sorts of structural enhancements and side agreements are made to ensure the deal has exactly the same risk profile as a conventional finance.  At the end (and start) of the day it's a Bank and once again they will face reality when it's their cash at stake.  Is National Australia Bank, that great advocate of Sharia compliant finance, really going to take additional risk for the supposed good of society?  I know NAB customers (or ex-customers) will find that extra amusing.  These deals are fully secured, easily accelerated upon usual defaults and have exactly the same commercial risk profile.  That is the job of the Islamic finance industry, to turn 'Islamic finance' into conventional financings.

There is also the socially responsible investment argument.  None of those nasty breweries, pig farms or casinos but money applied for the defence of Islam is OK.  No more needed on that point.

Moving on, it's an insult to the intelligence of a flea that there is no "interest". It looks like, smells like, feels like and tastes like interest but we wont call it that.  It takes a pretty special talent of stretching logic and truth to think there is no "interest" in the deals and no doubt a mind that is already trained to do such things in every aspect of life.

In fact Islamic financings are generally more expensive to the Borrower.  Even if the "interest" rate is the same (although it's often higher) the additional structural, compliance and agency fees, as well as incidental higher fees for lawyers etc, make it almost prohibitive at times (perhaps something to be gratefu

l for!)

but the point remains that it has the effect of decreasing capital in the system.  Further to this, given the inflexibility of the structures, it also has a counter effect of not applying resources where required nor in the most efficent manner, contrary to what it claims.

There is also a concern that profits will go to terrorists.  There are three ways this could happen (ignoring who the actual loan goes to).  Through direct profits is the first.  NAB could fairly claim that its profits go only to shareholders and a portion is not required to go to 'Islamic charities'.  This however is not necessarily the case for Islamic Banks or Banks from an Islamic country operating in Australia. The second way is through the penalty / liquidated damages type clauses in the contracts.  Payments under these clauses (after taking out actual losses which are usually minimal) must, irrespective of who the Bank is, go to "Islamic medical, charitable or scientific organisations at the discretion of the Sharia supervisory board".  Lookout!  Lastly, any profits that are found to be made by any of the participating Banks due to non-compliance with the agreed structure may also be directed to such organisations.  This will 'cleanse' the money.

We all know Crean will ignore us as his mandate seems to be to destroy democracy in Australia and he is addicted to the Islam vote.  At the very least though he must insist on these organisations being named in the contract for the Banks to get the necesssary tax waivers to make these financings viable.

Finally, what also needs to be done is to shame all the law firms / financial consultants / project advisers and other assorted misfits who are falling over themselves to get a piece of this 'hot sector'.  Seems the beach house is a bit more important than our children's freedom.  Shame on anyone who promotes this in Australia.

Last Updated on Sunday, 24 October 2010 11:24  

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