What Will Happen If Indonesia Violates FATF Rule on Bond Transactions?

TEMPO.CO, Jakarta - The Civil Society Coalition, Danantara Monitor, believes that the legal protection offered to purchases of Danantara's special bonds proves to contradict several recommendations from the Financial Action Task Force (FATF). Against this backdrop, the coalition requests the intergovernmental organization to reassess Indonesia's membership.

The legal protection points to Article 50A of Indonesia's Financial Sector Development and Strengthening Law No. 4 of 2026 (P2SK Law).

"This new law, especially Article 50A, constitutes a breach of Indonesia's obligations as a full FATF member," the Danantara Monitor's statement read on Thursday, July 2, 2026.

One of the disputed provisions is Article 50 paragraph 6, which stipulates that data and information from activities carried out in every purchase of special debt instruments by Danantara, such as the Patriot Bond and the Merah Putih Bond, cannot be used as the basis for tax assessments and be admitted as legal evidence in court.

According to the coalition, this clause violated FATF's Recommendation 5 related to Customer Due Diligence, which recommends that banks verify the origin of funds entering or transacted. 

Therefore, the coalition wrote to the FATF Secretariat on July 1, requesting a formal review of Indonesia's full membership.

What Happens Then?

If FATF finds that the article is in conflict with global standard guidelines or FATF recommendations, Indonesia's full membership since 2023 will suffer losses. 

Executive Director of Celios, Bhima Yudhistira, a member of the Danantara Monitor coalition, laid out the risks. "If FATF revokes Indonesia's membership, financial and investment agencies will find it more difficult to make transactions with companies in Indonesia," he said when contacted on Thursday, July 2, 2026.

The assessments will also affect other FATF-abiding countries' views on Indonesia. "Even when Indonesian citizens apply for visas to European and American countries, the process could take longer since it is deemed coming from a country that legally harbors money launderers," he said.

The Head of the Financial Transaction Reports and Analysis Center (PPATK), Ivan Yustiavandana, explained that Indonesia's full membership in FATF is the result of a long struggle to improve the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) regime standards in Indonesia.

Indonesia was previously listed in the Non-Cooperative Countries or Territories (NCCT) released by FATF, an experience Ivan believed should not be repeated.

"Indonesia's full membership in FATF bestows the highest honor and indicates international acknowledgment of the commitment and integrity of Indonesia's financial system, equal to other FATF member countries," he said.

However, Ivan emphasized that Article 50A of the P2SK Law does not legalize or erase the status of funds originating from criminal acts. Furthermore, the disputed article only regulates legal protection within specific scopes and stages, and does not provide legitimacy to criminal gains.

Ivan ensured that PPATK and the government are fully committed to ensuring that all national policies remain in line with FATF standards. "And continue to strengthen the effectiveness of Indonesia's AML/CFT regime," he said.

Read: Why Danantara Monitor Wants FATF to Review Indonesia

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