Airlangga: PFII Not a Haven for Illicit Funds

Amidst scrutiny and criticism of the establishment of the Indonesian International Financial Centre (PFII), the government has guaranteed that the institution will not become a haven for money laundering. Coordinating Minister for Economic Affairs Airlangga Hartarto stated on Wednesday (22/7/2026) at the Presidential Palace complex in Jakarta that ratified anti-money laundering conventions would protect the PFII from illicit funds. “In the current global financial context, ‘know your customer’ is paramount,” he told reporters. Indonesia has ratified various anti-money laundering conventions and enacted Law Number 8 of 2010 on the Prevention and Eradication of the Criminal Act of Money Laundering. Airlangga asserted that by adhering to these laws and conventions, the PFII would avoid and be protected from the flow of dark money.

The House of Representatives (DPR) approved the PFII bill into law during a plenary session on Tuesday (21/7/2026). The PFII is expected to attract global capital flows, deepen the national financial market, and open long-term financing sources to support accelerated economic growth and development. Finance Minister Purbaya Yudhi Sadewa stated after the session that the PFII’s establishment is not solely aimed at attracting foreign investors, but also at ensuring that incoming investment provides tangible benefits for national interests. The PFII is planned as a zone with special provisions, including tax and customs facilities, licensing ease, foreign exchange use, and distinct institutional and dispute resolution mechanisms.

Despite these ambitions, the bill’s swift passage—completed in just 18 days from its initial working committee meeting on 2 July 2026—has drawn public attention and concern. Economists have raised alarms over regulatory, institutional, and reputational risks, as well as potential impacts on tax revenue and money laundering. Public policy expert Achmad Nur Hidayat from UPN Veteran Jakarta questioned the provision for zero percent income tax for up to 50 years for businesses in the zone, calling it ironic while the state is simultaneously broadening the tax base and regulating digital traders to fund expanding social programmes. He warned of risks including shell companies, round-tripping, money laundering, and tax avoidance, and urged the government to report annually to the DPR and the public on the tax expenditure, net investment, job creation, and compliance of PFII recipients. Similar concerns were raised by Syafruddin Karimi, a professor at Andalas University, who cautioned that Danantara’s investment in the PFII could carry reputational risks if the market perceives the centre as a low-tax haven or a weakly supervised zone.