Constitutional Court Challenged Over Legal Immunity for Patriot Bond Investors
An advocate, Muhammad Hafidz, has filed a judicial review with the Constitutional Court challenging provisions in the Financial Sector Development and Strengthening Law (UU P2SK) that grant legal protection to buyers of special debt instruments, namely Patriot Bonds and Merah Putih Bonds. The petition, registered under Number 253/PUU-XXIV/2026, scrutinises a phrase in Article 50A paragraph (5) of the UU P2SK, which states the state guarantees and protects the purchase of these special debt instruments from general criminal prosecution, specific criminal prosecution including tax crimes, and civil lawsuits.
According to Hafidz, the protection granted by the state to buyers of these special debt instruments could potentially eliminate legal accountability without clear boundaries. He argued the provision could create legal immunity, even if the transactions were conducted using funds derived from criminal acts or unlawful conduct.
“Article 1 point 72 of the UU P2SK, which guarantees and protects the purchase of special debt instruments from legal entanglement, is a protection that eliminates the possibility of legal accountability without clear limits,” Hafidz stated before the panel of judges at a preliminary hearing on Wednesday, 8 July 2026.
Furthermore, the petitioner contends the rule contradicts Article 28D paragraph (1) of the 1945 Constitution because it closes off access to legal mechanisms that advocates use to fight for their clients’ rights. He explained that when a law shuts down all avenues of law enforcement against a particular legal subject, advocates lose the space to provide legal aid, file legal remedies, and oversee a fair legal process.
“As a result of this norm, the Petitioner loses the opportunity to perform his profession optimally when providing legal assistance to the public who have legal interests in Patriot Bond or Merah Putih Bond transactions,” Hafidz said.
Based on this argument, the petitioner requested the Court declare the phrase unconstitutional and conditionally unenforceable. The petitioner proposed that legal protection should only apply if the purchase of Patriot Bonds or Merah Putih Bonds was made in good faith in accordance with laws and regulations, and the funds used did not originate from criminal acts, unlawful acts, or actions causing state losses.
During the preliminary hearing, Constitutional Court Justice Arsul Sani asked the petitioner to strengthen his argument. He suggested including a claim that the article under review could potentially foster money laundering crimes. “The formulation of Article 50A paragraph (5), quote unquote, in my words, could foster or encourage money laundering crimes, even though money laundering is something the state intends to eradicate, hence the existence of the Anti-Money Laundering Law,” Arsul said. “So, there is a potential for a conflict of rules with the Anti-Money Laundering Law,” he added.
Previously, Finance Minister Purbaya stated that the protection given to buyers of Patriot Bonds and Merah Putih Bonds should not be interpreted as granting legal immunity to investors. He clarified that the protection in these special debt instruments only applies to the funds placed in the bonds, not to the investors’ overall business activities or legal obligations. However, the former Chairman of the Indonesia Deposit Insurance Corporation acknowledged the policy carries a risk of being exploited for money laundering. Nonetheless, he argued that the repatriated funds could be used for development purposes. “Rather than the money staying abroad, let it enter the system, even if there is a slight downside. But I think the money enters our economy,” he said on Tuesday, 23 June 2026.