Mukhamad Misbakhun, chairman of the House of Representatives’ Commission XI, said institutional safeguards remain effective in vetting buyers of the government’s Patriot Bond and Merah Putih Bond.
“We have full confidence in the Know Your Customer mechanisms integrated into Indonesia’s financial system, which strictly align with global standards,” Misbakhun said Friday at the Mid-Year Economic Outlook 2026 forum in Jakarta.
His remarks follow mounting domestic and international scrutiny over legal protections granted to buyers of the bonds, prompting concerns they could become a haven for illicit funds.
Critics argue recent legislation limits judicial scrutiny over the origins of money used to purchase the securities.
Misbakhun rejected claims that the bonds create opportunities for financial crime.
He said institutional investors moving billions or trillions of rupiah into the instruments must satisfy strict compliance requirements enforced by financial intermediaries.
Know Your Customer checks are completed when investors open accounts with commercial banks, securities firms or asset managers, Misbakhun said.
“These compliance checks happen systematically across each sector, and we must trust these institutions to fulfill their regulatory responsibilities,” he said.
Misbakhun said the legal protections attached to the Patriot and Merah Putih bonds are intended to attract global investment.
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Indonesia’s debt market faces increasing competition from Western government bonds as elevated U.S. interest rates continue drawing capital toward lower-risk dollar-denominated assets.
The government must provide competitive structural incentives to encourage investment in Indonesian debt, he said.
The lawmaker’s comments echoed clarifications previously issued by the government.
Finance Minister Purbaya Yudhi Sadewa said Tuesday the legal protections are narrowly defined.
The safeguards are contained in Article 50A of Law No. 4 of 2026 on the Development and Strengthening of the Financial Sector.
The law protects buyers of selected debt instruments issued by sovereign wealth fund BPI Danantara from criminal prosecution, tax audits and civil lawsuits related to the invested funds.
Purbaya said the protections do not provide blanket immunity for investors.
Funds invested in the Patriot and Merah Putih bonds are legally protected, but investors’ broader business activities, external assets and separate tax obligations remain subject to law enforcement and regulatory oversight, he said.
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Translator: Uyu Septiyati Liman, Aditya Eko Sigit Wicaksono
Editor: Rahmad Nasution
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