Transnational Waqf:

Harmonising Shari’ah Conditions with Trust/Charity Law in Cross-Border Endowments

Hajed A. Alotaibi

 

Abstract: Waqf (Islamic endowment) is perpetual and institutionally characteristic: it may own assets, it may raise revenue, and it may benefit beneficiaries over a long-term basis. In modern usage, however, waqf is often transnational. A wāqif (founder) may be domiciled in one jurisdiction, the assets subject to waqf may be domiciled in another, and the beneficiaries or administrators may be functioning in more than one state. In this article, a Shari’ah-legal and transnational framework of cross-border waqf is developed by synthesising, first, the core juristic principles, in particular the binding force of the stipulations of the founder, nazir/mutawalli (waqf administrator) fiduciary obligations, istibdāl (substitution), and public interest (maṣlaḥah); and second, the (currently developing) supervisory and investment architecture of waqf in Saudi Arabia (registration and specialised regulation of endowment investment portfolios and endowment investment funds). The article then suggests three structuring alternatives of cross-border waqf, and a model Waqf Charter clause-set (choice of law, forum, dispute resolution, governance, reporting, and investment policy) that is aimed at maintaining Shari’ah compliance, but enhancing legal recognition and enforceability across jurisdictions. Lastly, it also proposes a relative Anti-Money Laundering and Counter-Financing of Terrorism compliance matrix aligned with the Financial Action Task Force risk-based approach to safeguard the non-profit industry without over-regulation.