Indonesia's Patriot Bond faces criticism over legal immunity provisions

Indonesia's government introduced special securities called Patriot Bond and Merah Putih Bond under Law No. 4/2026 (P2SK) to attract overseas Indonesian capital back into the domestic financial system. Finance Minister Purbaya Yudhi Sadewame clarified that the legal protection applies only to the invested funds, not to the investors' companies, and emphasized that the bonds are intended to boost market liquidity and fund development projects.

Legal scholars and economists warned that the law’s broad immunity – shielding bond transactions from criminal, specific and civil liability and exempting related data from tax and court use – could be exploited for money‑laundering and undermine Indonesia’s anti‑money‑laundering framework. They urged clear implementing regulations to enforce Know‑Your‑Customer, Customer Due Diligence and source‑of‑funds checks, ensuring compliance with international AML/CTF standards and preserving the integrity of bodies such as PPATK, Bank Indonesia and OJK.