The issue of tawarruq as a ruse to circumvent the forbidden
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May Allah forgive you, O Shaykh! There are now some companies that say to anyone: If you want a house or a car anywhere, come and tell us about this house or this car, and we will buy this house or this car for you, then we will pay you the price of this house or this car in installments. At the same time, this company does not obligate the person, if it has bought this house or this car for him, to take this house or car; he has the choice, whether he wants to buy it or wants to go back on his word.
So what is the ruling on this sale? May Allah reward you with good.
This transaction has spread widely among the people, and it is—in reality—not permissible from the Shari'ah perspective, and it is harmful from the economic perspective.
As for it being not permissible from the Shari'ah perspective: It is well known that if you came to me and said: I want to buy such-and-such a car for fifty thousand riyals, give me (50.
000) riyals, and give you after a year (60.
000) riyals, is this matter permissible or not permissible? It is not permissible, and there is no doubt about that.
The purchase of the car by the merchant or the company is nothing but a means to reach this ten-thousand increase, which was originally not permissible, and now has become permissible through this ruse. This is not possible, for the forbidden is forbidden, and circumventing it only adds ugliness to it.This is like saying: Take (50.
000) and buy the car you want, and after a year give me (60.
000) riyals; there is absolutely no difference, except that the form you mentioned—that the merchant buys it from the showroom and then sells it to you—is nothing but a mere ruse. If it were not for you, he would not have bought it for you, nor would he have thought about buying it. That is why you find he takes precautions for himself; he goes to inspect the house and see if this house is worth the price or not, and the same applies to the car; so he takes complete precautions.
Then, if it happens that he bought it and you backed out, he puts you on the blacklist, so he will never deal with you again.Then the word: (If he wishes to return it, we accept it), it is like scattering ashes in the eyes—as they say—so do not think that this man who wanted this house or this car or this land, and prepared for the increase, do not think that he will back out. The man has an interest in this, and he must buy it. If you counted those who backed out, you would not find one in a thousand.
Therefore, we see that this transaction is forbidden, and that it is a ruse to circumvent riba through a nominal purchase that is not intended for its own sake.
And if the Shaykh al-Islam—may Allah have mercy on him—prohibits tawarruq, and likewise Imam Ahmad, and others of the scholars,And tawarruq: it is seeking the item that is in the possession of the seller, so this is more wicked and more severe.
And the Children of Israel, when the fats were forbidden to them, said: We will not eat the fat; but we will melt the fat, and sell it and eat its price.
So which is closer to the forbidden: This ruse, or the ruse you mentioned? The ruse you mentioned is closer; because it reaches the forbidden in the first degree, whereas the ruse of the Children of Israel does not reach the forbidden except after three degrees.And yet the Messenger, peace and blessings be upon him, said: (May Allah kill the Jews! When the fats were forbidden to them, they rendered it, then sold it, and ate its price).
So this, by Allah, is a ruse to circumvent the forbidden, and I have no doubt about its prohibition. The person who is sincere to himself should stay away from it, even if the people issue a fatwa for him and he issues a fatwa for them. The criterion is the intentions, not the forms, and the merchant did not intend from the profit except riba, and he did not intend by buying the car except riba.
But we say: Yes, if the car was in his possession, and he sold it to you for more than its price in cash, and you want the car itself, or you want to make a profit from it, so you buy it from this country and sell it in another country to make a profit from it, then there is no problem with this, and it is permissible.
But if you bought it from him while it is with him, and you want to sell it and take its price, then this is the issue of tawarruq, and there is disagreement among the scholars about it. Shaykh al-Islam Ibn Taymiyyah holds that it is forbidden, and it is a narration from Imam Ahmad.
And if someone were to say: Explicit riba is less severe than the transaction that was mentioned, so his saying will not be far from the truth; because this transaction combined the ruse and circumvention of Allah the Mighty and Majestic with riba. So the harm of riba is present, and it is the increase that this merchant took. So we ask Allah for guidance.
And the truth: When a person sees these transactions, and sees the transactions of the banks, and sees the gambling that has started to increase now; like insurance and the like, he fears, by Allah, the punishment. If the Children of Israel were punished for less than this, then we, by Allah, will fear.
So when the hunting of fish was forbidden to them on the day of Saturday, Allah the Exalted tested them, so the fish would come on the day of Saturday in large numbers on the water, and on any day other than Saturday they would not see the fish. So they circumvented it by setting up a net on Friday, and they took the fish on Sunday.And they said: We did not hunt on Saturday. The form is that they did not hunt, correct; but in reality they did hunt.
So the criterion, O my brothers, is the realities of things, not their forms.
So we fear a punishment that will befall us by means of these things. If we were to sell and buy according to the Shari'ah, staying away from ruses and deceiving the Lord of the Worlds, this would be more beneficial and more blessed for us.
So it has become clear to us from the Shari'ah perspective that it is not permissible.
As for the fact that this transaction is harmful from the economic perspective, it has opened for the poor the door to rushing into debts for this reason. So it became easy for one of them to buy a car for seventy thousand, because he will go to the merchant and take it with great ease. But if this method were not there, he would go to buy a car for sixteen thousand according to his need, and according to what he has. So this transaction has burdened the backs of many people, and emboldened them to take on debt. I do not mean taking on debt from religion, but from debt, so it emboldened them to take on debt from people, until when they died, it was found that they had hundreds of thousands on them, and all of that is because of this transaction.
Therefore, we warn against it from both the Shari'ah and economic perspectives.And we say: (And whoever is content, Allah will enrich him).
(And whoever leaves something for Allah, Allah will replace it with something better).
The questioner: But the people do not know anything about this.
The Shaykh: By Allah, my brother, we have a fatwa on this; we wrote a fatwa on it.
The questioner: The problem is that some of these companies claim that they have a Shari'ah committee, and that this Shari'ah committee issued a fatwa permitting this—O Shaykh.The Shaykh: In any case: what is required of us is clarification, and we have now clarified it. So whoever hears this speech and is convinced by it and sees that the ruse does not make the forbidden lawful, let him praise Allah for the guidance. And whoever is not convinced, then for each one is a degree of what they did.
The questioner: Some people now have become three or four partners in buying a car for the sake of installment payments.
Answer: There is no harm, on the condition that it is not from the issue of tawarruq. For example, now—pay attention!—if you buy a car on installment, it has three aspects: The first aspect: that you buy it on installment to work with it, whether the work is for wages or for your needs, then this is permissible, and there is no disagreement about it.
The second aspect: That you buy it to make a profit from it, not to meet your need, so you are not in need; but you bought it from this country to sell it in another country for an increase, then this also has nothing wrong with it.
The third reason: That you buy it for your need for money; but you did not find anyone to lend you, so you resorted to this method,So the scholars call this: the issue of tawarruq, and there is the disagreement that I mentioned to you.
So what is the ruling on this sale? May Allah reward you with good.
This transaction has spread widely among the people, and it is—in reality—not permissible from the Shari'ah perspective, and it is harmful from the economic perspective.
As for it being not permissible from the Shari'ah perspective: It is well known that if you came to me and said: I want to buy such-and-such a car for fifty thousand riyals, give me (50.
000) riyals, and give you after a year (60.
000) riyals, is this matter permissible or not permissible? It is not permissible, and there is no doubt about that.
The purchase of the car by the merchant or the company is nothing but a means to reach this ten-thousand increase, which was originally not permissible, and now has become permissible through this ruse. This is not possible, for the forbidden is forbidden, and circumventing it only adds ugliness to it.This is like saying: Take (50.
000) and buy the car you want, and after a year give me (60.
000) riyals; there is absolutely no difference, except that the form you mentioned—that the merchant buys it from the showroom and then sells it to you—is nothing but a mere ruse. If it were not for you, he would not have bought it for you, nor would he have thought about buying it. That is why you find he takes precautions for himself; he goes to inspect the house and see if this house is worth the price or not, and the same applies to the car; so he takes complete precautions.
Then, if it happens that he bought it and you backed out, he puts you on the blacklist, so he will never deal with you again.Then the word: (If he wishes to return it, we accept it), it is like scattering ashes in the eyes—as they say—so do not think that this man who wanted this house or this car or this land, and prepared for the increase, do not think that he will back out. The man has an interest in this, and he must buy it. If you counted those who backed out, you would not find one in a thousand.
Therefore, we see that this transaction is forbidden, and that it is a ruse to circumvent riba through a nominal purchase that is not intended for its own sake.
And if the Shaykh al-Islam—may Allah have mercy on him—prohibits tawarruq, and likewise Imam Ahmad, and others of the scholars,And tawarruq: it is seeking the item that is in the possession of the seller, so this is more wicked and more severe.
And the Children of Israel, when the fats were forbidden to them, said: We will not eat the fat; but we will melt the fat, and sell it and eat its price.
So which is closer to the forbidden: This ruse, or the ruse you mentioned? The ruse you mentioned is closer; because it reaches the forbidden in the first degree, whereas the ruse of the Children of Israel does not reach the forbidden except after three degrees.And yet the Messenger, peace and blessings be upon him, said: (May Allah kill the Jews! When the fats were forbidden to them, they rendered it, then sold it, and ate its price).
So this, by Allah, is a ruse to circumvent the forbidden, and I have no doubt about its prohibition. The person who is sincere to himself should stay away from it, even if the people issue a fatwa for him and he issues a fatwa for them. The criterion is the intentions, not the forms, and the merchant did not intend from the profit except riba, and he did not intend by buying the car except riba.
But we say: Yes, if the car was in his possession, and he sold it to you for more than its price in cash, and you want the car itself, or you want to make a profit from it, so you buy it from this country and sell it in another country to make a profit from it, then there is no problem with this, and it is permissible.
But if you bought it from him while it is with him, and you want to sell it and take its price, then this is the issue of tawarruq, and there is disagreement among the scholars about it. Shaykh al-Islam Ibn Taymiyyah holds that it is forbidden, and it is a narration from Imam Ahmad.
And if someone were to say: Explicit riba is less severe than the transaction that was mentioned, so his saying will not be far from the truth; because this transaction combined the ruse and circumvention of Allah the Mighty and Majestic with riba. So the harm of riba is present, and it is the increase that this merchant took. So we ask Allah for guidance.
And the truth: When a person sees these transactions, and sees the transactions of the banks, and sees the gambling that has started to increase now; like insurance and the like, he fears, by Allah, the punishment. If the Children of Israel were punished for less than this, then we, by Allah, will fear.
So when the hunting of fish was forbidden to them on the day of Saturday, Allah the Exalted tested them, so the fish would come on the day of Saturday in large numbers on the water, and on any day other than Saturday they would not see the fish. So they circumvented it by setting up a net on Friday, and they took the fish on Sunday.And they said: We did not hunt on Saturday. The form is that they did not hunt, correct; but in reality they did hunt.
So the criterion, O my brothers, is the realities of things, not their forms.
So we fear a punishment that will befall us by means of these things. If we were to sell and buy according to the Shari'ah, staying away from ruses and deceiving the Lord of the Worlds, this would be more beneficial and more blessed for us.
So it has become clear to us from the Shari'ah perspective that it is not permissible.
As for the fact that this transaction is harmful from the economic perspective, it has opened for the poor the door to rushing into debts for this reason. So it became easy for one of them to buy a car for seventy thousand, because he will go to the merchant and take it with great ease. But if this method were not there, he would go to buy a car for sixteen thousand according to his need, and according to what he has. So this transaction has burdened the backs of many people, and emboldened them to take on debt. I do not mean taking on debt from religion, but from debt, so it emboldened them to take on debt from people, until when they died, it was found that they had hundreds of thousands on them, and all of that is because of this transaction.
Therefore, we warn against it from both the Shari'ah and economic perspectives.And we say: (And whoever is content, Allah will enrich him).
(And whoever leaves something for Allah, Allah will replace it with something better).
The questioner: But the people do not know anything about this.
The Shaykh: By Allah, my brother, we have a fatwa on this; we wrote a fatwa on it.
The questioner: The problem is that some of these companies claim that they have a Shari'ah committee, and that this Shari'ah committee issued a fatwa permitting this—O Shaykh.The Shaykh: In any case: what is required of us is clarification, and we have now clarified it. So whoever hears this speech and is convinced by it and sees that the ruse does not make the forbidden lawful, let him praise Allah for the guidance. And whoever is not convinced, then for each one is a degree of what they did.
The questioner: Some people now have become three or four partners in buying a car for the sake of installment payments.
Answer: There is no harm, on the condition that it is not from the issue of tawarruq. For example, now—pay attention!—if you buy a car on installment, it has three aspects: The first aspect: that you buy it on installment to work with it, whether the work is for wages or for your needs, then this is permissible, and there is no disagreement about it.
The second aspect: That you buy it to make a profit from it, not to meet your need, so you are not in need; but you bought it from this country to sell it in another country for an increase, then this also has nothing wrong with it.
The third reason: That you buy it for your need for money; but you did not find anyone to lend you, so you resorted to this method,So the scholars call this: the issue of tawarruq, and there is the disagreement that I mentioned to you.