At my prodding, Eugene Volokh revisted his look at the government enforcement of religious law today, looking at both Islamic Halal and Jewish Kosher regs. He finds that the best way to prevent fraud is through the application of trademark law:
There are kosher certification authorities, such as the Union of Orthodox Jewish Congregations of America, that license special certification marks (in the Union's case, a capital "U" inside a circle) to those businesses who comply with the Union's rules and subject themselves to the Union's investigations. Individual rabbis do the same for local restaurants. If someone uses the certification mark or a rabbi's name when they aren't licensed to do so, they're violating trademark law -- and the government can punish them for violating this secular law without any judgment about whether their actions also violated religious law. Muslim organizations should do the same for halal, and it may well be that some already have.
The religious judgments (did so-and-so comply with halal laws?) are purely in the hands of religious authorities. The secular authorities have to pass only secular judgments (did the person use the certification mark or the imam's name without permission?). The result is separation of church and state, a phrase that's often abused, but that is quite proper here. (Of course, there might still be concerns about the certification authority, whether an organization or an individual Muslim religious leader, erring in its certification decisions -- but the same concerns apply doubly to state-run enforcement halal agencies.)
And this, I think, illustrates a broader point: Separating religion and state is best accomplished when the government takes no cognizance of religion -- gives it no special benefits and imposes on it no special burdens or exclusions. Trademark law is equally available to everyone, religious or not. It provides a benefit to religious organizations, but only on equal footing with other organizations.
Such equal treatment is proper, whether as to trademarks, income tax exemptions for charitable contributions, or school choice programs. But special benefits for religion, especially ones that require the government to make quintessentially religious judgments, are generally not proper.
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