Malawi is poised to significantly bolster its legal architecture against financial crime with the introduction of a comprehensive Draft Trusts Bill. The government convened a crucial stakeholder consultation in Lilongwe on Thursday to solicit vital input on this long-overdue legislation, aimed at closing critical loopholes in transparency and accountability within the country’s trust sector.
Solicitor General and Secretary for Justice and Constitutional Affairs, Gertrude Lynn Hiwa SC, underscored the inadequacy of the current legal framework, highlighting its substantial gaps. “Currently, Malawi does not have a regime for registration of settlement trusts,” Hiwa stated. “The Trustees Incorporation Act only provides for the incorporation of qualifying charities and associations.” This absence, she explained, has become increasingly untenable, particularly in light of Malawi’s international obligations to combat money laundering and terrorist financing.
The urgent necessity for a trust registration regime has been amplified by the country’s commitment to establishing beneficial ownership transparency for legal arrangements. While Malawi has made strides in beneficial ownership reforms under its Companies framework, trusts have remained outside the purview of these advancements. The Draft Trusts Bill is specifically designed to bridge this critical gap.
“The Draft Trusts Bill seeks to address these gaps by creating a modern, practical and responsive legal framework that will support trust structures, promote legal certainty, transparency and strengthen appropriate regulatory oversight,” Hiwa informed participants. Consultant Reyneck Matemba, affiliated with the Companies Registrations and Intellectual Property Centre, presented the Bill’s provisions, urging stakeholders to engage actively to refine the legislation before its parliamentary progression. Registrar General Chikumbutso Namelo echoed this call for robust participation.
The initiative has received technical assistance in its drafting from the Chandler Institute of Justice, a fact acknowledged with gratitude by Hiwa. The consultation itself drew a diverse array of participants, including representatives from the private sector, the Ministry of Justice, civil society organisations, the Malawi Law Society, and the Reserve Bank of Malawi. This broad engagement reflects the far-reaching implications of the reforms, which officials anticipate will enhance transparency, accountability, and ultimately, investor confidence once enacted. For legal practitioners, compliance officers, and corporate leaders, this development signals a significant shift towards a more robust and transparent financial regulatory environment in Malawi.
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