In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
2- You are entitled to follow the opinion of Abu Hanifah and Muhammed Ibn al-Hasan since the principles of the Shari`ah permit him to do so.
Answering your question, Dar Al-Ifta Al-Misriyyah, states:
This ruling is applicable to the case in the above question. They based their opinion on many evidences from the Sunnah which include the following:
Makhul (one of the Successors) narrated in a hadith mursal (i.e. a hadith in which the narrator between the Successor and the Prophet is omitted from the chain of transmission) that the Prophet (peace be upon him) said, “There is no riba [usury] between Muslims and the people living in non-Muslim countries” (Reported by Al-Shafi`i in his book Al-Umm vol. 7, p. 359, al-Zayla`i in Nasb Al-Raya vol. 4, p. 44, Ibn Hajar in Al-Diraya fi Takhreej Ahadith al-Hidaya vol. 2, p. 158 and Ibn Qudama in Al-Mughni vol. 4, p. 47).
Commenting on the hadith, Ibn Qudama said, “The authenticity of this hadith is not established and it could be a command to prohibit usury between Muslims and others.”
When the Prophet (peace be upon him) expelled the Jewish tribes of Bani Qaynuqa` and Bani al-Nadir (from Medina) they said that the Muslims owed them some debts which were not due at that time. The Prophet (peace be upon him) told them, “Lower [the debts] and make haste” i.e. write off the debts and accept an immediate discounted payment. It is known that this form of transaction among Muslims is considered riba, so it is invalid.
While in Mecca which was a non-Muslim country at that time, the Prophet (peace and blessings be upon him) wrestled Rukana, a disbeliever for a third of a sheep on each time. The Prophet (peace be upon him) defeated him three times and generously returned the sheep. Abu Dawud reported the original story in vol. 4, p.55, At-Tirmidhi reported it in vol. 4, p.247 without mentioning the sheep but mentioned the sheep in his Hadiths Mursal in vol.1, p.235 and others.
Ibn `Abbas and others (may God be pleased with them all) narrated that the Messenger of God (peace be upon him) said in Khutbat al-Wada (the sermon delivered on his Farewell Pilgrimage): “All riba of the Jahiliyah [the pre-Islamic period] are null and void and the first to be abolished is that of Al-`Abbas ibn Abd al-Muttalib.” Al-`Abbas converted to Islam after he was captured in the battle of Badr and later returned to Mecca which was still a non-Muslim country. In Mecca, he dealt in riba—the Prophet (peace be upon him) knew of this and did not prohibit it. Therefore, the hadith proves the permissibility of dealing in riba in non-Muslim countries. It was only after the conquest of Mecca that riba was prohibited.
When God Almighty revealed His words: “Alif Lam Meem. The Romans have been defeated—in a land close by: But they, (even) after (this) defeat of theirs will soon be victorious” (Al-Ruma 30:1-3), the disbelievers of Quraysh asked Abu Bakr (may God be pleased with him), “Do you believe that the Romans will be victorious?” ‘Yes,” he replied. They said, “Will you bet on it?” He replied in the affirmative. When Abu Bakr informed the Prophet (peace and blessings be upon him) of this, the Prophet told him, “Go back to them and raise the bet.” When the Romans defeated the Persians, Abu Bakr won the bet and the Prophet approved of it. This was before the Muslim conquest of Mecca.
Due to the above evidences and others, Muhammad ibn Al-Hasan said, “If a Muslim enters a non-Muslim country under safe conduct, there is no harm if he takes their money through any means with their approval.”
Al-Sarkhasi said, “There is no riba between Muslims and the people of non-Muslim countries. Abu Hanifa and Muhammad Ibn al-Hassan (may God have mercy on them) permitted selling one dinar in exchange of two in non-Muslim countries based on the hadith narrated by Makhul. The money he takes from them from selling un-slaughtered dead animals or by wagering is lawful to him according to Abu Hanifah and Muhammad (may God have mercy on them). The opinion of the two imams is the established opinion of the Hanafi School of Jurisprudence.
To conclude, Abu Hanifah and Muhammad Ibn al-Hassan—unlike Abu Yusuf—have maintained the permissibility of engaging in corrupt contracts with non-Muslims in non-Muslim countries.
The inquirer is entitled to follow the opinion of Abu Hanifah and Muhammed Ibn al-Hasan (may God have mercy on them) since the principles of the Shari`ah permit him to do so. Scholars have stated that it is permissible for a legally responsible person to follow the opinion of the scholars who permit something upon which there is a scholarly difference of opinion, if the opinion of those who prohibit it may impose difficulty upon him. They said, “Whoever is afflicted with something controversial may follow the opinion of those who permit it.”
Almighty Allah knows best.