By Rui Hao Puah

The tiny oil-rich state of Brunei, no bigger than the state of Delaware, grabbed headlines in 2014 when it became the first country in Southeast Asia to introduce a Sharia penal code at the national level.

The Sultan of Brunei Hassanal Bolkiah, who also holds the position of prime minister, first announced the law in October 2013, prompting sharp criticism from human rights group and the western media. According to the United Nations commissioner for human rights, the new penal code contravenes international law when it is applied to such a broad range of offenses and includes sometimes “inhuman or degrading torture or punishment.” Opposition also came from groups advocating for lesbian, gay, bisexual, and transgender (LGBT) rights in Asia and concerns about the law’s impact on women due to gender discrimination.

Phase one of the law was implemented in May 2014 after some initial delay. It penalized acts such as not fasting during Ramadan, missing Friday prayers, and giving birth out of wedlock with fines, prison sentences, or both. So far, fewer than 20 people reportedly have been convicted, mostly for smoking during fasting hours or close proximity between unmarried couples.

Phase two was expected to be implemented within 12 months of phase one, but has been “delayed until further notice” according to an official with Brunei’s Ministry of Religious Affairs in July. The second phase would include provisions for severing of limbs and flogging for theft and alcohol consumption, while the final phase would allow capital punishment such as stoning for adultery, sodomy, or insulting the prophet Mohammad.

The U.S. Congress has been wary of Brunei’s Sharia penal code in the context of negotiations on the Trans-Pacific Partnership (TPP) trade agreement, of which Brunei is a member. In June 2014, 119 lawmakers sent a letter to Secretary of State John Kerry and U.S. Trade Representative Michael Froman to call for a stop to further TPP negotiations with Brunei until its criminal code is revoked. In February, members of the Congressional LGBT Equality Caucus also assailed the administration for including countries that are hostile toward gay communities, including Brunei and Malaysia, in trade agreements. In Brunei, gay sex can be punishable by the death penalty.

While concerns among some in the United States about Brunei’s Sharia law have not yet been implemented, it could potentially become a bigger issue as TPP countries work to reach a deal by the end of the year and Congress becomes more involved in issues of human rights and transparency in the trade agreement.

In the Trade Promotion Authority (TPA) legislation, which both the House of Representatives and the Senate approved in April authorizing President Barack Obama to “fast-track” trade deals, Congress requires that the president adhere to a number of negotiating objectives, one of which is the promotion of human rights. According to this objective, trade agreements should “promote respect for internationally recognized human rights and more open and democratic societies.” A full implementation of the Sharia penal code in Brunei will certainly go against this mandate. It remains to be seen whether more members of Congress will object to the current state of Sharia law implementation in Brunei.

Ejecting the oil-rich kingdom of over 400,000 people from the trade pact may be tricky, considering Brunei was one of the founding members of the TPP, along with Chile, New Zealand, and Singapore. Yet other democratic countries in the TPP, including Australia and Canada, have either criticized or questioned Brunei over its Sharia laws.

The sultan’s controversial move did not come out of the blue. He first proposed a Sharia penal code back in the 1990s, calling Islam a “firewall” against globalization. His government may also seek to reform Brunei’s ailing, oil-dependent economy by attracting Islamic investment in banking, finance and services, and views the implementation of Sharia law as a boost to the sultanate’s Islamic credentials. He may also see Sharia laws as a tool to tighten his political rein; while many of Bruneians hold cushy public sector jobs and benefit from petrodollar, state-funded welfare, rising unemployment among Bruneian youth has resulted in an uptick in crimes and dissent, which has found its expressions online and through text messaging apps.

Brunei, which bans the sale of alcohol and restricts other religions, has traditionally practiced a relatively conservative form of Islam compared to its Muslim-majority neighbors Malaysia and Indonesia. Although ethnic Muslim Malays, who make up 70 percent of the population, have been broadly supportive of the government’s implementation of Sharia laws, non-Muslim Malays and other ethnic groups have privately expressed unease. Government estimates put non-Muslims, including Buddhists and Christians, at 34 percent of the population.

These factors mean that renouncing a Sharia legal system for trade purposes may present a difficult choice for the Brunei government. But for Washington, leaving this issue untouched while it has asked other TPP countries to adopt reforms to improve their governance and human rights records may go against Congress’s TPA negotiating objectives.

Mr. Rui Hao Puah is a researcher with the Sumitro Chair for Southeast Asia Studies at CSIS.