Contemporary Fiqh Issues in Cash Waqf The case of Waqf Sukuk

Abstract

Recently, the importance of waqf (endowment) has emerged with increasing global interest in sustainable development. The revival of cash waqf as one of the most important types of waqf, as well as the advent of new uses, have resulted in the formation of new Fiqh (juristic) difficulties. This is due to the flexibility and efficiency of cash waqf in mobilizing financial resources for Islamic countries' economic and social development programs. This paper discusses the importance of the juristic issues arising from waqf sukuk (bonds). These issues are zakat, rahn (collateral), and the exchange of waqf sukuk. The paper concludes that zakat is not obligatory on permanent and temporary waqf sukuk, neither on the waqf founder (sukuk holder) nor on the beneficiaries. A distinction is made between debt and qard in regard to the obligation of zakat on the creditor in debt but not in qard. The exchange of sukuk sukuk is discussed in light of juristic disagreement in replacing the waqf asset, adopting permissibility within the Shariah guidelines and precautions. Finally, this paper adopts the impossibility of using waqf sukuk as collateral by the sukuk holder in order to safeguard the waqf asset. This study, on the other hand, waqf sukuk accepts the permissibility in analogy to the permissibility of mortgaging the debt for the benefit of a third party other than the debtor, by using the temporary waqf sukuk as collateral by the sukuk holder.