After years of existing largely on paper, Malawi’s Confiscation Fund has finally acquired the rules governing who can access billions of kwacha seized from criminals, how the money will be spent and who will account for it.
The Financial Crimes (Confiscation Fund) Regulations, 2026, gazetted on July 24, 2026, operationalise the fund, which, according to the Financial Intelligence Authority (FIA), holds about K16 billion recovered from proceeds of crime.
The regulations mandate the FIA to receive and assess funding applications before recommending allocations to the Minister of Finance, Economic Planning and Decentralisation, who has the final approval.
They also allow compensation of victims where courts have issued compensation orders, require beneficiaries to account for every kwacha spent and empower the FIA to recover misused funds, suspend disbursements and repossess assets where necessary.
Commenting on the new framework, anti-money laundering expert Jai Banda said the regulations are intended to ensure that proceeds of crime ultimately benefit the public, but cautioned that recovering illicit wealth remains a far greater challenge than managing it.
“Cashgate alone involved about US$25 million. Other grand corruption cases run into hundreds of millions. Recovering K16 billion suggests we are still clawing back only a fraction of what has been stolen,” he said.
On transparency, Banda noted that while the regulations establish the fund’s operating framework, they do not prescribe detailed public reporting on allocations, making transparent implementation critical to maintaining public trust.
Centre for Multiparty Democracy executive director Boniface Chibwana described the regulations as “more administrative than transformative”, saying they establish procedures but leave considerable discretion to the FIA and the minister on how the fund will ultimately be used.
He said the real test would be whether the money is invested strategically in initiatives that strengthen governance, deter financial crime and deliver measurable public benefits, rather than simply financing routine government expenditure.
“It would have helped if the National Planning Commission had been included as a strategic adviser to the fund. The first allocations should support activities that reinforce the objectives of the Financial Crimes Act while contributing to Malawi 2063.
“Priority should also be given to compensating victims of crime, particularly where courts have already ordered compensation, as this directly addresses the harm caused by financial crimes,” Chibwana said.
Private practice lawyer Yankho Kawalewale of Ritz Attorneys also described the framework as “more administrative than ambitious”, arguing that while it establishes how confiscated assets will be distributed, it falls short of setting a long-term vision for using them to strengthen institutions, prevent financial crime and generate broader social and economic benefits.
He said transparency would depend not only on the regulations themselves but also on how the Ministry of Finance and the FIA manage and disclose information about the fund.
“They should proactively publish annual reports showing how much money entered the fund, who received allocations, the purposes for which funds were approved, implementation progress and the outcomes achieved.
“Public disclosure of this information would reassure citizens that confiscated assets are being managed in the public interest rather than becoming another pool of discretionary government funds from which ordinary Malawians derive little benefit,” he said.
Beyond cash, the FIA also manages assets recovered from criminal activity, including houses, plots and motor vehicles.
Section 48(2) of the Financial Crimes Act, 2017 empowers the courts to order the forfeiture or confiscation of tainted property belonging to convicted offenders.
In March 2024, the High Court ordered the forfeiture of fugitive Paul Mphwiyo’s Area 43 residence in Lilongwe, valued at K690 million, after he failed to comply with bail conditions in corruption and money laundering charges linked to the 2013 Cashgate scandal, which emerged while he was serving as the Ministry of Finance’s budget director.
