Advocate Muhammad Hafidz has filed a lawsuit with the Constitutional Court, challenging legal protections for buyers of “Patriot Bonds” and “Merah Putih Bonds” under the Law on Developing and Strengthening of the Financial Sector (PS2K Law). The applicant argues that Article 50A, paragraph (5) of the law creates a form of legal immunity that could shield illegal funds from prosecution, violating the 1945 Constitution.
The Legal Challenge to Article 50A
The lawsuit, registered as Case Number 253/PUU-XXIV/2026, focuses on specific language within the PS2K Law that grants state guarantees to purchasers of special debt instruments. According to the filing, this provision protects bondholders from general and special criminal prosecution, including tax offenses, as well as civil lawsuits. During a preliminary hearing on July 8, 2026, Muhammad Hafidz argued that these protections create “muddled legal accountability,” potentially allowing individuals to avoid culpability even when transactions involve unlawful funds.
Constitutional Concerns and Legal Aid
Hafidz contends that the current statute conflicts with Article 28D, paragraph (1) of the 1945 Constitution. He argues that by closing off legal avenues for enforcement, the law prevents advocates from providing necessary legal assistance and ensuring fair processes. The applicant has requested that the Constitutional Court declare the contested phrase non-binding unless the purchase is made in good faith and the funds are verified as legitimate. He proposes that protection should be restricted to investors who can prove their capital did not stem from criminal acts or conduct that causes state losses.
Potential Conflict with Anti-Money Laundering Laws
During the hearing, Constitutional Justice Arsul Sani highlighted the risk that the provision might foster money laundering. "Article 50A paragraph (5), quote unquote, can potentially foster or promote money laundering offenses, whereas this is something the country aims to eradicate," Arsul stated.
Government Stance on Investor Immunity
Finance Minister Purbaya has previously addressed concerns regarding these bond instruments, stating that the law should not be interpreted as a blanket grant of legal immunity. According to the Minister, the protection provided is limited specifically to funds placed within the bonds, rather than covering the entirety of an investor’s business activities or legal obligations. While the Finance Minister acknowledged the potential for money laundering risks associated with the policy, he maintained that the revenue generated from these bonds is intended for national development purposes.
What May Happen Next
As the case progresses, the Constitutional Court will determine whether the protections provided under the PS2K Law are constitutional.
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