Government is Currently Drafting Regulation on Government Guarantee

The Directorate-General of Laws and Regulations (“DJPP”) is currently harmonizing the Draft Regulation of the Government (“Draft Regulation”) on Government Guarantee. This draft regulation allows the government to manage the state's financial risks on guaranteed financial obligations.

“This draft aims to strengthen the legal framework for managing government guarantees to support infrastructure financing and national investment,” said Director of Harmonization of Laws and Regulations III, Unan Pribadi, to Hukumonline.

In the Draft Regulation, guarantees are defined as the fulfillment of guaranteed financial obligations to the recipient of the guarantee, provided on behalf of the government by the Minister of Finance. It is hoped that the policy on government guarantees will provide legal certainty, improve the management of state financial risks, and strengthen transparency and accountability in the provision of guarantees.