Such fears are often due to lack of knowledge of the laws of the Middle East countries and also partly because of the myth of Islamic law which many Western jurists and businessmen obtain from negative public media. However, banks and European contractors intending to enter into contracts, whether for financing or constructing projects in the Middle East, are well advised to raise legal questions and to seek legal advice as to the validity of certain contractual provisions and in particular those related to the charging of interest.

With this in mind, we shall present in part 4 of this article a short and general survey on the extent of the application of Islamic law in certain Middle East Arab countries, showing where and how far Islamic law applies. Related to the same issue, part 5 will deal with the concept of and the prohibition of interest under Islamic law. Part 6 is devoted to a short outline on Islamic Banking, referring to certain model contracts which have been used in financing construction and other projects. Prior to that, in parts 2–3, and related to the subject, a definition of Islamic law and a short background to Islam may be useful in order to introduce readers to a few of the terms used

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