Risks if Indonesia Fails to Comply with FATF Standards
Civil society coalition Danantara Monitor has assessed that legal protection guarantees or immunity for the purchase of special Danantara debt instruments contravene several global standards or recommendations of the Financial Action Task Force (FATF). The coalition is requesting that the intergovernmental organisation review Indonesia’s membership.
The legal protection point for buyers of Danantara bonds is stipulated in Article 50A of Law Number 4 of 2026 concerning the Development and Strengthening of the Financial Sector (UU P2SK). “This new law, particularly Article 50A, constitutes a violation of Indonesia’s obligations as a full member of FATF,” the Danantara Monitor coalition stated in a press release on Thursday, 2 July 2026.
One of the clauses in question is Article 50 paragraph 6. It states that data and information from activities carried out in every purchase of special Danantara debt instruments, such as Patriot Bonds and Merah Putih Bonds, cannot be used as a basis for taxation or as legal evidence in court.
The coalition assesses that this point violates FATF Recommendation 5 regarding Customer Due Diligence. FATF recommends that banks verify the origin of incoming or transacted funds. “However, the P2SK Law actually relaxes this scrutiny because the data cannot be used as evidence in court.”
As a consequence, the coalition sent a letter to the FATF Secretariat on Wednesday, 1 July 2026, requesting a review of Indonesia’s full membership, citing the problematic article in the P2SK Law.
If FATF responds to the letter with a review and finds that the article contravenes global standard guidelines or FATF recommendations, Indonesia, which has been a full member since 2023, will suffer losses, as every country is obliged to comply with the guidelines set by FATF.
Celios Executive Director Bhima Yudhistira, a member of the coalition, outlined the risks. “If FATF were to revoke Indonesia’s membership, it would become increasingly difficult for financial institutions and investors to conduct transactions with companies in Indonesia,” he said when contacted on Thursday, 2 July 2026.
Bhima also mentioned the impact on the assessment of major countries that strictly adopt FATF standards towards Indonesia. “Even when Indonesian citizens apply for visas to European countries and the US, the process could take longer because they are considered to be coming from a country that legally facilitates money laundering practices,” he said.
Indonesia has been a full member of FATF since October 2023. Head of the Financial Transaction Reports and Analysis Centre (PPATK) Ivan Yustiavandana explained that full membership was the fruit of a long struggle to improve the standards of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime in Indonesia.
Prior to that, he said, Indonesia had been on the Non-Cooperative Countries or Territories (NCCT) list. The NCCT list is a blacklist of countries deemed uncooperative in eradicating money laundering and terrorism financing, issued by FATF.
According to Ivan, being on the NCCT list was an experience that must be avoided so it does not recur. “Indonesia’s full membership in FATF provides the highest honour and demonstrates FATF and international recognition of Indonesia’s commitment and the integrity of its financial system, which is on par with countries that are members of FATF,” he said on Thursday, 2 July 2026.
Nevertheless, Ivan stressed that Article 50A of the P2SK Law does not legalise or eliminate the status of funds originating from criminal acts. The origin of the funds remains attached as proceeds of crime if proven to be so.
Furthermore, he stated that the article only regulates legal protection within a certain scope and stages, and does not provide legitimacy to the proceeds of crime.
Ivan assured that PPATK and the government are fully committed to ensuring that all national policies remain aligned with FATF standards. “And continue to strengthen the effectiveness of Indonesia’s AML/CTF regime,” he said.