Is it permissible for those affected by the Iraqi invasion of Kuwait to take the excess compensation amount that the United Nations calls "late payment penalty"?
A Muslim is permitted to take the amount he lost, but he is not allowed to take any increment, as it constitutes usury (riba). If the increment is a penalty, it belongs to the Muslim public treasury (Bayt al-Mal) and he has no right to it. It is impermissible to take an increment on the pretext of compensation for withholding money and missing out on an investment opportunity, because he might have lost the money even if he had taken it on time. It is also impermissible to take an increment in return for delayed payment. The fact that the increment was not stipulated beforehand does not affect its impermissibility, especially since the payer of the amount is coerced into it.
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- Original fatwa ID
- 21092
- Imported
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- Source text, unreviewed
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