Conventional and Islamic Letter of Credit: Comparison and Implementation
This study attempts to provide the insight about payment method in international trade, especially by using Letter of Credit both conventional way and Islamic way. This study is exploratory and using qualitative method of research. This study reviews and analyses the previous literatures and other secondary data to conduct the study. The secondary data for this research were gathered through library research. This study also doing the document analysis. Based on the data collected, Letter of Credit is the most secured and commonly used as the method of payment for International Trade. But a lot of contents on the Conventional Letter of Credit is not Shariah-compliant. Islamic Financial Institutions around the world trying to comes up with Islamic Letter of Credit, but to implementing Islamic Letter of Credit creates some new issues and challenges. This study attempts to provide the insight about payment method in international trade, especially by using Letter of Credit both conventional way and Islamic way.
Ahmad azam othman, R. che H. and A. abdula A. (2010). An Overview of Sharia issues regading the application of the islamic letter of credit practice in Malaysia.
Ayub, M. (2007). Understanding Islamic Finance. Understanding Islamic Finance. https://doi.org/10.1016/j.pacfin.2013.09.002
Aziz, R. bintit che H. and A. Z. binti A. (2009). Islamic Letter of Credidt (LC): an overview on legal and Sharia Issues. surabaya, indonesia: paper presented at the international conference on corprate law 2009.
Ben, S. (2010, November). International Trade Theory and Policy: A Review of the Literature. Working Paper No. 635, 2.
Blaugh, M. (2006). The methodology of economics, or how economist explain. Cambridge: Cambridge University Press.
Bowen, G. A. (2009). Document Analysis as a Qualitative Research Method. Qualitative Research Journal, 27-40.
Chong, R., Abdullah, R., Anderson, A., & Amin, H. (2008). Economics Of Islamic trade financing instruments. International Review of Business Research Papers, 4(3), 167–177. Retrieved from http://www.kantakji.com/fiqh/Files/Economics/y100.pdf
Corbin, J., & Strauss, A. (2008). Basics of qualitative research: Techniques and procedures for developing grounded theory.
Credit Suisse. (2014). Letters of Credit. Geneve: Credit Suisse.
Economic Concepts. (2012). Home Trade and international trade, definition and difference. Retrieved from Economic Concepts 2012: http://economicsconcepts.com/home-trade-and-international-trade.html
Gündoǧdu, A. Ş. (2016). Risk management in Islamic trade finance. Bogazici Journal, 30(2), 59–77. https://doi.org/10.21773/boun.30.2.4
Hashim, R. C. (2015). The UCP 600 Rules in Letter of Credit (LC): Selected Issues. 8th UUM International Legal Conference (pp. 278-282). Bandung: Uneversiti Utara Malaysia.
Islamic Financial Services Board. (2017). Islamic Financial Services Industry Stability Report 2017. https://doi.org/10.1017/CBO9781107415324.004
Kerr J, P. (1977). RD Harbottle (merchantile) Ltd vs National Westminster Bank Ltd. ALL ER.
Krugman, P. R., & Obstfeld, M. (2009). International Economics, Theory and Policies. London: Pearson Education Limited.
Lahsasna, A. (2007). Implementation of the Islamic Letter of Credit. International Islamic Conference on Islamic Banking and Finance (IICiBF) (pp. 1-25). Kuala Lumpur: International Islamic University Malaysia.
Mohamemed Hashim Kamali (2006) equity and fairness in Islam, Ilmaih publishers Sdn. Bhd: Kuala Lumpur, at 102.
Nello, S. S. (2009). The european Union Economics Policies and History. New York: McGraw Hill Education.
Oseni, U. (2013). Towards Restructuring the Legal Framework for Payment System in International Islamic Trade Finance. Journal of International Trade Law and Policy, 12(2), 108-126.
UNCTAD Secretariat. (2014). The Role of International Trade in the post-2015 Development Agenda. United Nations Conference on Trade and Development (pp. 2-3). Geneva: United Nations.
U.S. Departement of Commerce. (2012, November 13). Method of Payment in International Trade. Retrieved from Export.Gov: https://2016.export.gov/tradefinanceguide/eg_main_043221.asp
The Saylor Foundation. (2012). International Trade: Theory and Policy. Washington DC: Saylor Publisher.
Thomson Reuters, & DinarStandard. (2017). Shariah-compliant Trade Finance : Developments and Opportunities, (March).
Tufekci, A. M., & Unal, A. C. (2010). International Payment Methods.
Vijayasari, G. V. (2013, September). The Importance of International Trade in The World. International Journal of Marketing, Financial Services & Management Research, 2(9), 111-119.
Authors who publish with Airlangga International Journal of Islamic Economics and Finance agree to the following terms:
- Authors retain copyright and grant Jurnal AIJIEF the right of first publication with the work simultaneously licensed under a Creative Commons Attribution 4.0 International License that allows others to remix, adapt and build upon the work with an acknowledgment of the work's authorship and of the initial publication in Jurnal AIJIEF.
- Authors are permitted to copy and redistribute the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in Jurnal AIJIEF.