pecial legal protections granted to investors purchasing debt securities issued by state asset fund Danantara have been deemed excessive and could open regulatory blind spots for illicit financial flows, experts warned.
Investors are now shielded from criminal prosecution, tax-related criminal proceedings and civil lawsuits linked to their purchase of Danantara-issued debt securities, under Law No. 4/2026, a recent amendment to the omnibus Financial Sector Development and Strengthening (P2SK) Law, which was passed by the House of Representatives earlier this month.
According to a copy of the legislation seen by The Jakarta Post, the newly added Article 50A sets out a special legal regime for purchases of the so-called “Patriot” bonds and “Merah-Putih” (“Red and White”) bonds with protections that extend beyond standard safeguards typically attached to financial instruments.
It applies to a broad range of investors, including participants of previous tax amnesty programs and the voluntary disclosure program (PPS), both introduced to encourage taxpayers to declare previously undisclosed assets.
The article also shields transaction-related information, stipulating that data arising from purchases of the bonds “cannot be used as a basis for tax imposition” and “cannot be used as evidence in court”, according to the law.
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Strapped for more revenue to finance development but constrained from further tapping the state budget, the government is effectively offering legal immunity in a bid to attract investor appetite for its new debt instruments, according to the Center of Economic and Law Studies (Celios).
