PFII Law Anticipates Money Laundering, Involves PPATK
The Chair of the Working Committee for the International Financial Centre Indonesia (PFII) Bill, Mohamad Hekal, has assured that the newly passed PFII Law has anticipated the risk of money laundering. The regulation, he said, is stipulated in Article 69, paragraph 4 of the PFII Law, which was ratified by the House of Representatives in a plenary session on Tuesday, 21 July 2026. Hekal’s statement was in response to public concerns regarding the risk of illicit fund flows entering the international financial centre. “We are maintaining Indonesia’s commitment regarding this matter,” Hekal said when confirmed on Thursday, 23 July 2026.
The points on Anti-Money Laundering and Counter-Terrorism Financing (APU PPT) are contained in Article 69, paragraph 4. The article states: ‘Business activities conducted within the PFII are subject to provisions governing anti-money laundering, terrorism financing and financing of the proliferation of weapons of mass destruction, beneficial ownership transparency, and access to financial information for taxation purposes as well as information exchange based on international agreements.’
The Deputy Chair of House Commission XI from the Gerindra Party faction also mentioned another anticipatory measure, namely involving the agency for the prevention and eradication of money laundering crimes as part of the PFII advisory board. The agency in question is the Financial Transaction Reports and Analysis Centre. “And the Chair of PPATK also sits on the PFII Advisory Board,” Hekal stated.
The PFII is a financial zone with specific administrative and legal particularities established to attract foreign investment and international liquidity funds into Indonesia’s financial ecosystem. The existence of this institution has been criticised by several economists who argue it will become a tax haven and risks turning into a money laundering zone.
Executive Director of the Center of Economic and Law Studies, Bhima Yudhistira, assessed that the ratification of the PFII Law adds to the list of problematic and risky government policies. Previously, the revision of the Financial Sector Development and Strengthening Law also contained controversial Article 50A, which was seen as granting immunity to investors purchasing special Danantara bond instruments.
“This is a complete amnesty package for tax evaders and other illicit funds. The instrument is the Patriot Bond, and the zone is the PFII. The offer to seek funding is not about attractive returns, but legal immunity. Indonesia’s reputation increasingly resembles low-income countries, not developed nations,” Bhima said in a written statement.
Economist from Paramadina University, Wijayanto Samirin, also expressed similar concerns. “There is potential for the PFII to be used as a money laundering venue if supervision against money laundering is not strict,” he said.
According to Wijayanto, the benefits sought from global investment may not be commensurate with the risk of losses. “If the PFII ultimately becomes a money laundering venue, there is a possibility we will face sanctions and be expelled from the FATF (Financial Action Task Force) and find it increasingly difficult to join the OECD (Organisation for Economic Co-operation and Development). Then, the government’s reputation will fall in the eyes of the public and the international community,” he said.
The government has anticipated a series of risks, including money laundering. Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the PFII, like other international financial centres, applies the ‘know your customer’ principle. Indonesia also complies with international anti-money laundering conventions. “That will certainly be protected, so this is not for illicit funds,” he said at the Presidential Palace in Jakarta on Wednesday, 22 July 2026.