» Purification of Money

Purification of Money
When we speak about purification of money, it is obvious that there is a supposed pillar which is: Halal money is mixed with Haram money. There is no doubt that the unlawful money affects negatively the Islamic community and each Muslim individual as well. When the Prophet -Peace Be Upon Him- was asked by Sa’ad Ibn Abi Waqqas "O Prophet of Allah pray to Allah so that Allah may respond to my invocation when I ask him for anything", the Prophet said "Make your money lawful, your invocation will be responded" narrated by Al-Tabarany in Al-Awsat. This Hadith proves even if by way of implication the importance of the fact that Muslim must keep himself away from unlawful money. Allah knew early that people will not depart the unlawful money completely and their money may mix with unlawful money so that He levies alms tax. Allah says "take alms from their wealth to purify them and sanctify them with it" At-Taubah: 103. It is clear that purification is only implemented if impurities are involved.

Money in Islam is classified into two categories:
1-Unlawful money: "the prohibition is an attendant attribute of the money itself like the dog, hogs, and wine"
2-Lawful money
The first type implies no transaction shall be carried out regarding it because the prohibition is inherent in the money itself.
The second type is lawful and his owner has the right of usage, exploitation, and disposal. However, this category might be affected by the way how this money has been earned. For example, the money itself is lawful like gold or silver, but it has been collected by way of fraud or exaction then the prohibition here is added to the holder of the money not to the money itself.
Here an important question arises: Is holding such money a presumption of its possession?
The answer is No because the holder of such money is obliged by the Shari’a rules to return it back to the real owner, and he is not the owner.

Another question arises, if the holder of such money transacts with others by this money, will the prohibition transfer to the patrimony of the other party?
Before answering this question I assert the Islamic principle that states "every person is liable to his own acts" Allah says "And that man can have nothing but what he does (good or bad)" (An-Nagm: 39). Allah also says "And we have fastened every man’s deeds to his neck" (Al-Isr’a:13) so the prohibition will not transfer to the patrimony of the other party if he does not know that the money has been obtained by Haram ways. On the other hand, if he is aware of the prevented ways that the holder has passed by when he tried to seize that money, and then he is not allowed to deal with him regarding that money for a number of reasons:
He knows well that he does not deal with the owner of the money.
Such transaction prevents returning money to its real owner.
This is a confirmation and an approval of the Haram actions.
Another point needs to be made clear here: what is the ruling if the transaction is carried out with someone whose money is mixed with Haram money and he cannot differentiate between Halal money and Haram money?
If the majority of money is Haram, there will be a deterrent in that because the Shari’a considers the majority as the whole so no transaction shall be carried out by that money. But, if the Halal is the majority, the Ulama are in a disagreement regarding this. I select the opinion of the Hanafi, the Hanbali in one of their two opinions, and Ibn-Taymiyyah’s.  This opinion says it is allowed to deal with such money. This opinion has evidences from the Sunnah of the Prophet, Peace Be upon Him.
A’isha narrated that "The Prophet -Peace Be upon Him -bought barely from a Jewish man and gave him his shield as a pawn till he pays the money". This tradition reflects that the Prophet- Peace Be upon Him- deals with the Jewish despite knowing that they have corrupt transactions like Al-Riba or the interest.
Muslims are allowed to deal with non-Muslims, and it is well known that non-Muslims earn their money in discordance with the rulings of the Islamic Shari’a.
We have just clarified some rulings on the mixture of the Halal money and the Haram money. Here is a section on the purification of such money.

In this article, we will finish what we started earlier in our article about Al-Riba and Interest by discussing the matter of the purification of money which is truly a complicated issue with many different aspects to investigate. Such a matter while being so sophisticated was at the same level of importance that many Doctors of philosophy took it to be its research main focus. We shall discuss the matter briefly in this article exerting ourselves to make it simple to understanding without distorting its meaning. In this manner we shall discuss the concept of purification, and then we will give a brief statement about the obligations of the owner of Haram money and finally discussing where to spend the Haram money to purify it.

The concept of Purification of money  
To get rid of the amount of money earned in an unlawful way and to abandon any unlawful way of earning money.
Duties on the holders of Haram money
Those who have earned Haram money must repent and avoid the Haram money or even possessing it. They must refrain from using it by any means whatever it was. Finally, they must give that money back to its rightful owner if known or spend it in the activities determined for the disposition of Haram money.
Abu Hamid Al-Ghazli once said "Be aware that the one who repents while having mixed money then he has a duty to separate between Halal and Haram money and to dispose of the Haram money".
Difficulties facing the possessors of mixed haram money in purification.
Such difficulties stem from the various sources of Haram money which are:
1-Usurious lending or borrowing
2-Investing in sectors including partially Haram activities such as tourism and media production
3-Breaching the major items of contracts or investments such as gambling, or illegal speculations, or factoring, or etc.
4-Failure to abide by the rules of fair competition such as monopoly and deception
How to separate Haram money from Halal money?
First you need to be aware of the sources of Haram money.  Secondly, you need to know the amount of Haram money and whether it is within the limits defined by contemporary scholars or not. If it is more than these limits, the investment must be abandoned. The limit defined by contemporary scholars and adopted by WVB Shari’a Rating is estimated 5% of the total revenue at maximum and there is another opinion estimating it by 10%. Thirdly, the following must be observed when separating money:

a. If the cause of prohibition is due to usurious dealings, then all interests are prohibited and its amount can be determined by comparing its percentage to the usurious debt. Haram money must be disposed of and the capital remains in the hands of its owner. Allah says "And if you do not do it, then take a notice of war from Allah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums)." Al-Baqarah: 279
b. If the prohibition is related to activities that ara haram themselves as wine and pork, the capital itself is haram. A Muslim must know the amount of the profitable assets to dispose of its profits.
c. If the Money is earned from contracts or investments involving a breach of their major items such as gambling or factoring as selling options, the contract is null and void and any profits resulting from it must be disposed of.
d. If the prohibition is related to breaching the rulings of competition and it is not related to a major item as monopoly and deception, the contract is valid according to the opinion of the majority of Ulama. Thus, owning the capital and its profits is allowed.

Now, we move to the activities where we dispose of Haram money by investing in:
To return the money earned from haram ways to its rightful owner or his heirs if the owner is known since the ownership could not be transferred without a lawful cause such as a sale contract or a donation contract.
To invest it in the public interest upon two conditions:
a. That he finds it impossible to know who the owner is or he knows that the money owner is sinful in his action as if he was a gambler.
b. That he spends such money with the intention to dispose of Haram money and repent.
To give it as charity to the poor and the needy according to the opinion of majority of Ulama and those are Al Shafia, Al Malkia, and Al Hanabla. Al Ghazali supported this view with Al Athar and Al Qyas. It was narrated that "Abd Allah Ibn Massoud once bought a female slave that he could not reach her owner to give him the price. He looked for him everywhere, but he could not find him. Finally, he gave the price to charity and said this is for his sake and if he did not want it then the reward is for me". The analogy dictates that the money is either going to be lost or to be spent in a good cause.  Of course spending it in a good cause has priority upon losing it.

The two previous activities require spending such money for the sake of rightful owner of money and that an official authority performs the spending on these activities.
To spend that money on himself and his dependents, this is permissible according to Gumhor Al Ulama upon conditions:
The spender must be poor with no lawful money or work to earn his living.
That he abandons the Haram earnings and repents.
That the rightful owner of the Haram money is not known
TO dispose of Haram money is by burning or damaging it or leaving the usurious interests to the banks to distribute it on charity associations and this is a point of disagreement among scholars. But, the preponderant opinion is to invest money in the previously mentioned activities to avoid wasting it.