The Influence of West Towards Islamic Economic Law Jawahir Thontowi Professor of Law and Director of CLDS FH UII Yogyakarta This Academic Paper delivered at International Seminar on “Quest of Islamic Economics: Challenges and Opportunities in Strenghtening The Future of Muslims Countries Economics” Collaboration between CLDS FH UII and Muria University of Kudus Semarang, Januari 17, 2013.

2 Academic Paper content Influence of the West Towards Islamic Economic Law –International Economic Law –Major Principles of Islamic Economics in HEI Global Recognition –Western Recognition of Islamic Economics –Islamic Banking in Indonesia –Closing

3 1. Preliminary –Conventional Economic concept from Adam Smith and David Ricardo; –The concept of Fitrah and Tauhid; –Poverty against Wellfare on Islamic Countries;

4 2. International Economic Law A.Islamic Economic Law (HEI) Relations: –International Trade Law; –Law of International Economic Integration; –Private International Law; –Law and Regulation of International Business; –International Financial Law; –The Role of Law in Development; –International Tax Law; and –Intellectual Property Rights Law. B.International Organizations: –GATT; –GATS; –WTO; –IMF; –IBRD; –OPEC.

5 3. Major Principles of Islamic Economics in HEI Global Recognition Principles of Economic Law –In implementing rules of international law, it must be based on the basic principles of HEI; –Equality of legal status as sovereign nations (equality before sovereign states); –Prohibitions to each other not to intervene; –All States without exception have the same right to make a profit (The most favored Nations) and treatment (Equal Treatment) of the various activities of trade and commerce; –Reciprocity (mutual and reciprocal principle); –Good faith, or settle intent is a principle that requires each State to comply with the principle of good faith in executing transactions; –Opennes or fair dealing; –Justice and decency (justice and equity); –Accountability and responsibility must be obeyed countries as an international business not only in law and morality, but also the responsibility to promote the common interests of the interest of certain group parties

6 4. Western Recognition of Islamic Economics Islamic economic system is not upright in humans as subjects purely, but the man put Tauhid as ultimate concern; Islamic economic as an alternative to fight the world economic crisis; Growth of Islamic banking system; and List of group of Islamic Development Bank (IDB) : –Islamic Research and Training Institute (IRTI); –Islamic Corporation for Development of the Private Sector (ICD); –Islamic Corporation for Insurance of Investment and Export Credit (ICIEC); –International Islamic Trade Finance Corporation (ITFC).

7 5. Islamic Banking in Indonesia Legal instrument of Islamic Banking: –Law No 7 Year 1992 on Banking; –Act No 10 Year 1998 on amendment of Law No 7 Year 1992 on Banking; –Government Regulation No 39 Year 2005 on Bank Deposite Guarantee Customer Sharia; –Government Regulation No 25 Year 2009 on Income Taz Sharia-Based Operations. Indonesian Islamic banking on example: –Bank BNI Syariah, Bank Muamalat Indonesia, Bank Syariah Mandiri, BCA Syariah, Islamic BJB Bank, Bank BRI Syariah, Bank Mega Syariah, Bank Panin Syariah, and others. Islamic economic in Academic Institution: –Islamic University of Indonesia (UII), University of Indonesia (UI), Trisakti, Islamic University / Institute of Islamic Studies Jakarta, Medan, Sunan Kalijaga Yogyakarta, and others. Local government cooperation on West Java, Yogyakarta, and South Sumatera.

8 Closing