This paper examines the potential application of the International Chamber of Commerce’s International Standby Practices 1998 (ISP98) to bank guarantees issued by Islamic banks, focusing on the compatibility between international banking standards and Islamic law principles in cross-border transactions. It analyses the independent and documentary nature of modern bank guarantees, contrasts these characteristics with the classical concept of kafala as an accessory and gratuitous obligation, and explores how Islamic finance principles—including the prohibition of riba and gharar—interact with contemporary banking practices. The study further evaluates the use of alternative Islamic contractual structures, particularly wakala (agency), to accommodate the independence principle required by ISP98, while also addressing the debate over charging fees for guarantees. It concludes that ISP98 can potentially govern Islamic bank guarantees when structured under wakala rather than kafala, provided that its application remains consistent with the objectives of Islamic law (maqasid al-sharia) while preserving the commercial effectiveness of international banking instruments.
Oleh :
Gisca Nurannisa
