Bai` al-Sarf - Shariah Requirements and Optional Practices

Transcription

1. Bai ` al-Sarf (Currency Exchange) PART B 7. 4 of 16 SHARIAH REQUIREMENTS AND OPTIONAL PRACTICES Compliance with Part B S 7.1 An IFI which uses bai` al-sarf as part of the underlying contract for its products and services must ensure that such products and services are in compliance with Part B of this policy document. 8. Definition S 8.1 Bai` al-sarf refers to a contract of exchange of money for money of the same or different type. S 8.2 Money is a medium of exchange that shall be in the form of currency, gold, silver, or other forms accepted by Shariah. S 8.3 For purposes of this policy document, bai` al-sarf refers to a contract of exchange of the same or different currency. 9. Nature S 9.1 Bai` al-sarf is an exchange contract that is binding in nature. Therefore, the contract shall not be terminated unilaterally by either of the contracting parties subject to paragraph 19.1(b). S 9.2 Terms or conditions that have been mutually agreed by the contracting parties, which do not contravene Shariah principles, shall be binding on the contracting parties. 10. Components of bai` al-sarf 10.1 A bai` al-sarf shall consist of the following components: (a) the seller and buyer (collectively referred to as contracting parties); (b) offer (ijab) and acceptance (qabul); and (c) subject matter. 11. Contracting parties S S 11.1 The contracting parties in bai` al-sarf shall be a seller and a buyer. S 11.2 The contracting parties shall be a natural person or a legal entity that must have the legal capacity1 to enter into bai` al-sarf. G 11.3 Any party to bai` al-sarf may enter into the contract through an agent (wakil). 1 Legal capacity of a person, from Shariah perspective, is defined as capacity to assume rights and responsibilities and capacity to give legal effect to his action. Among the important conditions are that the person must possess sound mind and the capacity to distinguish between what is harmful or beneficial to one’s interests. Legal capacity of a legal entity is defined as eligibility of an entity to acquire rights and assume responsibilities. In Malaysia, legal capacity is subject to the Contracts Act 1950 and the Age of Majority Act 1971. Issued on: 11 April 2018
2. Bai ` al-Sarf (Currency Exchange) 5 of 16 12. Offer (ijab) and acceptance (qabul) S 12.1 A bai` al-sarf must be entered into through an offer and acceptance between the contracting parties. G 12.2 The offer and acceptance may be expressed orally, in writing or by any other methods recognised by Shariah. 13. Subject matter S 13.1 The subject matter of bai` al-sarf shall be currency which is known and delivered by the contracting parties during the contract session. S 13.2 The currency in bai` al-sarf shall be determined and mutually agreed by the contracting parties at the time of the execution of the contract. 14. Salient features of bai` al-sarf S Delivery of currency 14.1 The delivery and taking possession of the exchanged currency in all bai` alsarf transactions, regardless of the currency, shall take place in full before the contract session ends. S 14.2 A contract session in bai` al-sarf refers to the period of time during which the contracting parties enter into a contract that– (a) commences with the offer (ijab), followed by an acceptance (qabul) to exchange currencies between each other; and (b) ends by the disengagement 2 of the contracting parties, or mutual waiving of the rights to revoke the contract (takhayur) by the contracting parties. S 14.3 In connection with paragraph 14.1, earnest money (`urbun) and conditional option (khiyar al-shart) shall not apply in bai` al-sarf. S 14.4 In the event the delivery of the exchanged currency cannot be carried out in accordance with paragraph 14.1, the delivery of the currency shall only be extended beyond the contract session provided that the extension is due to– (a) established customary business practice (‘urf tijari) resulting from operational constraints; or (b) any unexpected disruption to the business. S Same currency 14.5 In the event that the exchanged currencies are the same, the transaction shall be done at par.3 G Different currency 14.6 In the event that the exchanged currencies are different, the transaction may 2 3 includes physical parting or end of conversation on the bai` al-sarf including through telephone, chatroom or electronic platform. Please refer to Appendix 3 on the exchange rules of currency. Issued on: 11 April 2018
3. Bai ` al-Sarf (Currency Exchange) 6 of 16 be done at the prevailing currency rate or any mutually agreed rate at the time of the execution of the bai` al-sarf contract. S Possession of currency 14.7 The possession of the exchanged currency shall be in the form of physical possession (qabd haqiqi) or constructive possession (qabd hukmi). S 14.8 The buyer shall take possession of the exchanged currency upon delivery of the currency by the seller to the buyer through any mechanism permitted by Shariah (including customary business practice), such that the buyer shall have access to the currency and assume the ownership risk of the currency. S 14.9 The seller shall continue to have responsibility to effect delivery, and bear the risk of the exchanged currency prior to the buyer taking physical or constructive possession of the exchanged currency. ARRANGEMENT OF BAI` AL-SARF WITH OTHER CONTRACTS OR CONCEPTS G 15. Arrangement of bai` al-sarf with agency (wakalah) 15.1 In bai` al-sarf, the contracting parties may appoint an agent to execute bai` alsarf and to take possession or deliver the currency on their behalf. 16. Arrangement of bai` al-sarf with promise (wa`d) G 16.1 A party may provide a unilateral binding promise (wa`d) to enter into bai` alsarf with another party in the future. G 16.2 The parties may provide two separate unilateral binding promises (wa`dan) to each other which will be triggered by different causes of events respectively to enter into bai` al-sarf at a future date. G 16.3 The parties may provide bilateral binding promise (muwa`adah) to execute bai` al-sarf in the future. S 16.4 All arrangements in paragraphs 16.1, 16.2 and 16.3 shall only be for the purpose of hedging. 17. Arrangement of bai` al-sarf with ijarah al-khadamat G 17.1 Bai` al-sarf may be arranged with ijarah al-khadamat (services contract), which includes, but are not limited to, the following: (a) transfer of money (remittance) in a different currency; (b) cash withdrawal in a different currency; and (c) other related services such as the service of counting coins. G 17.2 Bai` al-sarf and ijarah al-khadamat may be combined in one document. S 17.3 Notwithstanding paragraph 17.2, both contracts must be specified and distinguished clearly in such document. Issued on: 11 April 2018
4. Bai ` al-Sarf (Currency Exchange) 7 of 16 G 17.4 For avoidance of doubt, the service provider may charge a fee for the service rendered under the services contract. 18. Payment of debt in different currency G 18.1 A debtor may pay a debt obligation in a different currency from that of his original debt. G 18.2 Parties who have debt obligations against each other may agree to set-off their obligations in different currencies. S 18.3 In connection with paragraphs 18.1 and 18.2, the payment of debt in a different currency shall be mutually agreed by the debtor and creditor, and effected at the prevailing exchange rate or a mutually agreed rate on the day of payment (not a pre-agreed rate). DISSOLUTION (FASAKH) AND COMPLETION (INTIHA’) OF BAI` AL-SARF 19. Dissolution of bai` al-sarf 19.1 A bai` al-sarf contract shall dissolve under any of the following circumstances: (a) the contracting parties mutually agree to terminate the contract; or (b) one of the contracting parties exercises the defect option (khiyar al`ayb) to terminate the contract. 20. Completion of bai` al-sarf S 20.1 A bai` al-sarf contract completes under any of the following circumstances: (a) possession of the exchanged currency by the contracting parties; (b) set-off (muqassah) of debt obligation between the contracting parties in different currencies; or (c) transfer of debt obligation (hiwalah al-dayn) to pay the counter-value to a third party provided that the settlement is effected on the spot. S 20.2 Upon completion of bai` al-sarf, the contracting parties shall be absolved from any further contractual obligations. S Issued on: 11 April 2018