Ethica Institute of Islamic Finance™

In case goods imported by a bank under a Murabaha agreement are delivered before the shipping documents, is it permissible for the bank to deliver the goods to its client?

It is permissible for the bank to deliver the imported goods bought under a Murabaha agreement to the client in case they arrive before the shipping documents. In such a case, the bank is required to issue a customs clearance certificate to the client. In order for the issue of such a certificate to be valid, the following conditions should be met:

• The documentary credit should be in the name of the bank.

• The invoice should be in the name of the bank.

• The documentary credit should require the beneficiary to notify the bank of the details of the shipment and invoice.

• In case the client requests the issuance of customs clearance certificates while the bank has not received notification from the beneficiary, the bank will endeavor to obtain such notification. The customs clearance certificate should not be issued before the receipt of such notification, except to avoid imminent harm.

Furthermore, it is permissible in such a case to change the mode of sale from Murabaha to a bargaining sale. Since documents have not arrived and cost is not decisively known, both parties may bargain to a suitable price.

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