Economic Crime (Transparency and Enforcement) Bill

– in the Scottish Parliament on 9th March 2022.

Alert me about debates like this

Photo of Alison Johnstone Alison Johnstone Green

The next item of business is a debate on motion S6M-03493, in the name of Keith Brown, on the Economic Crime (Transparency and Enforcement) Bill. I invite members who wish to speak in the debate to press their request-to-speak button now or to place an R in the chat function.

Photo of Keith Brown Keith Brown Scottish National Party

First, I reiterate this Government’s, Scotland’s and, I assume, this Parliament’s unqualified support for Ukrainian sovereignty, independence and territorial integrity, and our unequivocal support for the package of international economic sanctions against the Russian invasion. I am sure that the whole Parliament will be united in supporting the actions that we are taking to address this flagrant violation of international law by Putin’s regime.

The people of Ukraine should know that Scotland stands with them in the face of this unprovoked and unjustifiable aggression against their nation, and they can be assured that we will take all possible steps to sever ties to Putin’s regime and those individuals who support it.

That is why I am seeking the agreement of Parliament to the legislative consent motion on the Economic Crime (Transparency and Enforcement) Bill, which was introduced into the United Kingdom Parliament on 1 March. The bill has passed its Commons stages and is with the House of Lords. The bill introduces a register of overseas entities—ROE—and strengthens measures around unexplained wealth orders and the enforcement of sanctions. That will help the UK to counter illicit financial activity from Russia and elsewhere more effectively. The Scottish Government shares and supports those objectives and the provisions in the bill.

I intend to talk briefly on the measures in the legislative consent memorandum separately. Part 1 of the bill creates a register of overseas entities to provide transparency of beneficial ownership across the UK to tackle money laundering. The register will apply to all overseas entities that own land in Scotland and throughout the UK, which will have to provide information about their beneficial owners to Companies House. The register is designed to prevent criminals from hiding behind anonymous companies and from laundering money in UK property, and it will provide more information for law enforcement to help track down those using UK property as a money-laundering vehicle.

Property law, its interface with company law and the interface with the legal systems of jurisdictions around the world are a very complex matter. Broadly, the split between devolved and reserved powers lies not in the powers in this UK Government bill but between the entities to which it applies. I will use an example to illustrate that: a registered overseas company would fall within reserved powers, but an overseas charity would fall within devolved powers. That means that the ROE provisions legislate, to that limited extent, for devolved competence.

We have liaised with the UK Government over the proposals for a number of years, and I especially welcome the engagement over the past week. UK Government ministers wrote to me yesterday to confirm that they will be tabling an amendment, to be considered during the Lords committee stage, introducing a statutory mechanism to consult the Scottish ministers on regulations made under the sunset clause in the bill.

Transparency of ownership has long been a key objective of our land reform policy, and the Land Reform (Scotland) Act 2016 included provisions to establish a register of persons with a controlled interest in land—RCI. The establishment of the register was delayed slightly by the pandemic, but it is on track to be launched on 1 April. Although the policy objective of the RCI is to shed light on who is responsible for decisions about property, whereas the ROE seeks to tackle money laundering by shedding light on who benefits from that property, there is clearly some overlap and, in due course, we will review any duplication. Together, the RCI and the ROE will provide a better understanding of who owns, controls and benefits from Scotland’s land—questions that we have been seeking to answer for a very long time.

Part 2 of the bill seeks to strengthen the system of civil recovery of property that has been obtained through unlawful conduct by improving the effectiveness of the unexplained wealth order investigative procedures, assisting enforcement authorities in taking action against kleptocrats and criminals who are laundering funds in the UK.

The reforms will help to allow UWOs to be sought against property that is held in trust and other complex ownership structures. In Scotland, the civil recovery unit, acting on behalf of the Scottish ministers, can apply to the Court of Session for a UWO. The unexplained wealth order is just one investigatory tool under the Proceeds of Crime Act 2002, but it is a powerful one. It is a court order that requires persons who are suspected of being involved in or connected with serious criminality, or who are politically exposed persons, to explain how they obtained certain property where the value exceeds their known, lawfully obtained income.

The bill includes provisions that will assist enforcement authorities to investigate the origin of property and thereby recover assets that were obtained through unlawful conduct. The bill increases the scope of the existing powers in the 2002 act, expanding the list of persons against whom UWOs can be sought and enabling them to be served on a person who is a “responsible officer” and is expected to have some control of the asset.

For situations where the property holder was not responsible for financing the acquisition but it may have been obtained through unlawful conduct, the bill contains an alternative test to the income requirement that must currently be met for UWOs. That will help to ensure that property that is held via complex ownership structures will fall within the scope of the UWO regime.

The bill provides a power for the Scottish ministers or the Lord Advocate to seek an extension to the length of an interim freezing order, which prevents a person from dealing with any property that is subject to it. The bill will increase the time to a total of 186 days for the civil recovery unit or the Lord Advocate to review material that is provided to them.

The bill will also reform the court expenses rules so that expenses are payable by the Scottish ministers or the Lord Advocate in court actions relating to an UWO only if they have acted improperly.

The LCM sets out the relevant provisions that require consideration by Parliament in so far as they fall within this Parliament’s legislative competence or confer functions on the Scottish ministers so as to alter their executive competence in relation to devolved matters.

It is worth noting that the bill also seeks to strengthen sanctions measures, which fall outwith the LCM, in the light of Russia’s aggression towards Ukraine.

Photo of Stephen Kerr Stephen Kerr Conservative

I am grateful to the cabinet secretary for giving way on that point. It is right that our actions are focused on upholding the rights of the Ukrainian people, but does he agree that it is important that we do not slip into Russophobia? Our target is Putin and his grisly gang, not the Russian people.

Photo of Keith Brown Keith Brown Scottish National Party

That is an important point and one that I am increasingly seeing made, for example by people who understand that certain sportspeople have been caught up in sanctions and have been unable to compete in competitions that are very dear to them. These actions are necessary to undermine Putin’s regime, even if they sometimes—inevitably—catch other people. However, we should not get involved in Russophobia.

The Scottish Government fully supports the application of sanctions against Russia because of its aggression against Ukraine, and we will continue to do all that we can to support the UK Government in that regard.

I close by extending the Scottish Government’s appreciation to the parliamentary authorities for their assistance in expediting the LCM at such short notice to ensure that Parliament can vote on it today. I ask members to support the LCM.

I move,

That the Parliament agrees that the relevant provisions of the Economic Crime (Transparency and Enforcement) Bill, introduced in the House of Commons on 1 March 2022, relating to amendments for Unexplained Wealth Orders contained in the Proceeds of Crime Act 2002, and provisions relating to the Register of Overseas Interests, so far as these matters fall within the legislative competence of the Scottish Parliament or alter the executive competence of the Scottish Ministers, should be considered by the UK Parliament.

Photo of Michael Marra Michael Marra Labour

As we meet today, Russia’s war in Ukraine enters its 14th day—14 days of horror the likes of which we as a European community had said, “Never again,” to. Our thoughts are, of course, with every Ukrainian and every person who has been impacted by Putin’s war. Our thoughts are with the Ukrainian armed forces and those volunteers who have taken up arms to protect their sovereignty, their homes and their families.

However, all words are meaningless if our actions fall short. It is our duty here, in this place, to do everything in our power to increase the pressure on Putin and his cronies to shorten this war of aggression and to save lives. Over 400 civilian souls and thousands of combatants—and counting—have already been lost.

It is right that we are legislating at pace, as the cabinet secretary said, to ensure that we have the toughest of sanctions in the shortest time, and Labour supports the legislative consent motion that is in front of Parliament. My amendment sets out that no backdating should be allowed in relation to the land and assets that the Russian kleptocracy needs to declare here in Scotland. There is no logical sense as to why we must cut off at 2014 the land and assets that it must declare. The Scottish Government has said as much in its memorandum of response, and I am sure that Scottish National Party members will be good to that word by backing Labour’s amendment at decision time. I implore the cabinet secretary to lead in that regard.

I believe that the people of this land have a right to know who holds legal ownership of our common treasury, for which we are but stewards. Too often and for too long, the opaque nature of land registration has made it difficult to enforce proper care for our environment, resolve disputes, encourage or enforce development and to deliver redistribution. Our beloved country where we live and raise our children cannot be allowed to be a smugglers’ cove for capital on the seas of dark money that course around the globe. They may own it, but Scotland belongs to us. We must honour it, rather than allow it to be defiled by corrupt gains and blood moneys.

In achieving that greater good, there will be practical benefits, too. There are significant technicalities that ministers must urgently address, which the cabinet secretary began to set out in his speech. I would appreciate it if the minister could take on board some of those points.

Our amendment sought to seek maximum consensus through brevity, but there are other issues to consider. We must ensure that the Scottish regulations that the cabinet secretary outlined, which are due to come into force in a few weeks’ time, do not create an unnecessary twin-track system. I note the cabinet secretary’s intention that we should move quickly to review the situation. I suggest that the regulations should be rescinded to avoid confusion and to defeat the common purpose of both sets of laws. Ministers should be looking to take more action on persons of significant control in order to ensure that the land and assets that are controlled from abroad through trusts at home are declared and cannot be used to distort ownership. The Tulchan estate in Moray is Scotland’s most expensive sporting estate and is owned by Yuri Shefler, one of the richest drinks producers in the world. Under the proposed legislation, he will not have to declare ownership of the estate due to the intricacies of the chain of ownership.

It would be effective if regulations relating to persons of significant control could be included in the legislation. However, we have been promised at Westminster that a second bill is coming in the next year. I believe that it is vital that the Scottish Government makes significant representations on those issues and more to the UK Government.

We must also see robust enforcement of regulations by the Crown Office. Currently, regulations either are not working or are not being enforced appropriately. Although it is of course not for the Government to instruct the Crown Office, it is a point of reasonable inquiry to gain insight into how those regulations are being operationalised. We have been told that billions of pounds should have been, and perhaps still could be, realised in fines for non-compliance. If there is no enforcement, there is no deterrent.

Henceforth, let us agree as a Parliament that we will do all that we can to maximise transparency in every way, so that people can understand who owns the land to which we belong, who is profiting from it and whose influence is physically etched on our country. We are quickly responding to an emerging situation, but we have allowed the situation of untransparent ownership to develop over countless years. In an attempt to avert our eyes and protect interests, we have built a secretive landscape of ownership that does nothing but protect and defend elites. Right now, the Government should make a forthright commitment to changing that. Scotland can no longer be a safe haven to protect Putin’s interests.

I move amendment S6M-03493.1, to insert at end:

“, but, in so doing, believes that the provisions of part 1 of the Bill should apply to all land owned and registered in Scotland, regardless of when this was acquired.”

Photo of Donald Cameron Donald Cameron Conservative

In the spirit of transparency, I refer members to my entry in the register of interests as an owner of land in the Highland Council region.

I begin by associating myself and other members of the Conservative Party with the remarks that the cabinet secretary made about the ongoing situation in Ukraine. We share his concern about the profound impact that the invasion is having first and foremost on the Ukrainian people, but also its impact on the Ukrainian community in Scotland. I have met members of the Edinburgh Ukrainian Club and offered my party’s support and solidarity to them and those whom they represent across Scotland.

The crisis has led the UK Government to lodge the Economic Crime (Transparency and Enforcement) Bill, the contents of which were originally due to be part of a more wide-ranging piece of legislation. As others have said, it might well be that there is more UK legislation to come. However, given the situation that we currently face and the need for urgency in targeting illicit finance, including from Russia, it is right that the bill is being discussed today.

I also welcome the fact that the Scottish Government has recommended consent and that it broadly agrees with the robust action that is being taken by the UK Government to reform unexplained wealth order powers and to introduce a register of overseas entities. I welcome both the tone and substance of the cabinet secretary’s speech. There are difficult and complex questions of law about what is reserved and what is devolved in the area, but it is fair to say that we are all broadly on the same page.

I also welcome the support of the Labour Party at Westminster. It shows that, on issues such as this, political unity can achieve positive outcomes. We will support Michael Marra’s amendment today. I will return to that in a moment.

The bill introduces significant and timely changes that will improve transparency and give the UK and Scottish Governments greater powers of enforcement. The proposed register of overseas entities will require anonymous foreign owners of UK property to reveal their real identities, and will prevent individuals from hiding behind secretive chains of shell companies. The creation of the register will ensure that there is a level playing field in relation to property that is owned by UK companies which, at the moment, need to disclose their beneficial owners to Companies House. Sanctions will be imposed for non-compliance.

The cabinet secretary mentioned that the UK Government has committed to tabling an amendment that will introduce a statutory mechanism for consulting Scottish ministers on regulations that are within this Parliament’s legislative competence.

There are some areas of minor contention—namely, that the register will apply retrospectively to property that was bought up to 20 years ago in England and Wales, but only to property that was bought since December 2014 in Scotland. The Government’s legislative consent memorandum says that it has not explored an extension to an earlier date, which is what Michael Marra’s amendment attempts to consider. Land registration is, of course, a devolved matter. We support—and have supported—greater transparency in land ownership in Scotland. For those reasons, we will support Michael Marra’s reasoned amendment.

As others have noted, there are overlaps between the Scottish regulations on the register of persons holding a controlled interest in land—the RCI, as it is known—and the bill, in which the UK Government has reduced the grace period during which foreign-owned properties must be registered from its initial suggestion of 18 months to six months. That is a positive step forward, and I wonder whether the Scottish Government believes that the grace period in the RCI regulations should also be reduced—from 12 months to six months.

The ROE is directed at money laundering, as the cabinet secretary said, not at transparency about land ownership, but there might be room for joint working. For instance, if overseas entities require to report to the RCI, should they also have to report to the register of overseas entities?

Finally, there is a question of resources. It would be helpful to know what further resources the Scottish Government is making available to the Crown Office and Procurator Fiscal Service, which will be responsible for enforcing the new measures—especially given that the bill also seeks to strengthen the UWO regime, to increase and reinforce operational confidence in using UWO powers, and to clarify the scope of those powers. One way in which it will do that is by enabling UWOs to be sought against property that is held in trusts and other complex ownership structures.

The Scottish Conservatives support the Scottish Government’s motion. We believe that there is clear urgency for putting into effect the measures that are contained in the bill, and we believe that Parliament should give consent to the bill. It is right and proper that, as a Parliament, we play our role in making our institutions more robust, and that we ensure that we have in place the strongest possible measures for combating illicit financial activity.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

I rise to offer the support of the Scottish Liberal Democrats for the Government’s motion and Michael Marra’s amendment.

A terrible human tragedy is unfolding before our eyes. I am sure that each of us was deeply moved by the heroic words of President Zelensky when he addressed the Palace of Westminster last night. Those words reaffirmed to us all that we must continue to stand with the people of Ukraine and do everything that we can to sanction Putin for the destruction that he is causing. I associate myself with the remarks of Stephen Kerr: it is Putin—not the people of Russia—who is causing this. It is his regime. We must not lose sight of that.

Although I am pleased that the UK Government has introduced the bill, and at speed, I am disappointed that it has taken six years and this war—the illegal invasion of Ukraine—before the Government decided to take action to put an end to Kremlin-linked oligarchs’ laundering of their dirty money in our country.

Last month, Transparency International UK revealed that, since 2016, property worth £1.5 billion has been bought by Russians who were accused of corruption or links to the Kremlin. It also highlighted that more than 2,000 companies that are registered in the UK and its overseas territories, protectorates and Crown dependencies were found to be utilised in 48 Russian money-laundering and corruption cases, which involved more than £82 billion of funds that were diverted by rigged procurement, bribery, embezzlement and unlawful acquisition of state assets.

Those numbers are stark and eye-watering, and it is clear that something must be done. Unfortunately, I do not believe that the Economic Crime (Transparency and Enforcement) Bill goes far enough in ridding us of those links to Russia, not least because there are measures in the bill that allow the UK Government to exempt an individual from declaring on the register in the interests of the economic wellbeing of the United Kingdom. I am proud of my Westminster colleagues in the Liberal Democrats for tabling amendments that would close such loopholes, which will undoubtedly allow exploitation by oligarchs, and I support all the work that they are doing to get the bill right.

That loophole is not the Scottish Liberal Democrats’ only concern about the bill. As our former colleague in the chamber, Andy Wightman, pointed out over the weekend, the Scottish regulations that will come into force next month go back only as far as December 2014. That is not good enough. We must not presume that we in Scotland have been exposed to the corruption that comes with Russian oligarchs only for that short time. Just last week, Ross Greer highlighted that Vladimir Lisin, a man whose name can be found on a 2018 US Treasury Department list of senior political figures and oligarchs in Russia, has reportedly owned since 1985 a Perthshire estate that has received nearly £700,000 in state agricultural subsidies.

Under the new rules, no such individuals or companies will have to appear on the new register, so I am deeply concerned that, if no action is taken, people such as Lisin will be able to continue to own land in Scotland without proper scrutiny and—if need be—penalty. That is why Scottish Liberal Democrats agree with Michael Marra and Labour that part 1 of the bill should apply to all land that is owned and registered in Scotland, regardless of when it was acquired. By not extending the regulations so that properties that were bought before December 2014 are also included in the new register, we allow ourselves to still have ties to Russian oligarchs at a time when our clear message should be that we utterly condemn the actions of President Putin and that, as far as possible, Scotland will have no ties to his regime.

We stand in a building that was designed with transparency in mind. When it comes to instruments of legislation, such as the one that we are discussing tonight, we must ensure that transparency is at their very heart. I fear that, should the new regulations not be amended in the way that we have discussed, its provisions will allow those who have ties to the brutal Putin regime to prosper still in our country.

Photo of Michelle Thomson Michelle Thomson Scottish National Party

It is right to agree to the motion and allow Westminster, at long last, to legislate on economic crime. However, the bill is only at the second reading stage in the House of Lords, and there are some 47 pages of amendments from the House of Commons alone. Therefore, today we are debating the motion before the content of the bill is clear, and it might well emerge deeply flawed.

It should not have been like that. As Oliver Bullough’s new book, “Butler to the World”, makes clear, the UK has been the hub of international organised crime for years. What is worse is that it is not the case that we simply did not have effective legislation; rather, multiple—in particular, Tory—Governments have deliberately blocked reform. For example, it is on the record that, despite the best efforts of some people, the UK Government refused to tackle the criminality that is associated with Scottish limited partnerships. In doing so, it was effectively colluding with economic crime and corruption.

Legislation must also address the issue of UK banks. How many members in Parliament are aware that, since 2010, UK regulators have imposed penalties, mostly on banks, of more than £739 million for anti-money-laundering failures? The National Crime Agency has stated that, annually, money laundering alone is likely to amount to hundreds of billions of pounds. I have put that fact on the record on a number of occasions in Parliament.

The cynic in me might suggest that the real reason why the Tories in London are at last clamping down on organised corruption is that they do not like the competition. However, we must also look to institutions in Scotland. As Oliver Bullough’s chapter on the Scottish laundromat reveals, one major Scottish law firm threatened a senior investigative journalist with withdrawal of advertising from his paper if a story about SLP criminality was published. Said law firm has fronted huge numbers of SLPs and the Law Society of Scotland has not done enough to discourage their use, as submissions to various consultations have made clear. I appreciate that regulation on that resides with the UK Government, but will the Scottish Government consider how use of SLPs in particular can be discouraged—perhaps by having further discussions with the Law Society?

What are a few of the bill’s weaknesses? Despite claiming to make business vehicles more transparent, they can declare—without challenge—that they do not have a beneficial owner. That makes disclosure completely optional. Another weakness is that there is to be no disclosure of the beneficiaries of trusts that hold property. In addition, there will be only small penalties for missed deadlines and even for false filings.

The most startling weakness of all relates to the requirement to register. I would have thought that secret property ownership by oligarchs and others would be considered to be a bad thing in all circumstances. However, the bill will allow the UK secretary of state to exempt individuals from having to register if exemption is thought to be for our own wellbeing. Perhaps that is a perk for pals of the secretary of state. I do not know.

Of course, we have been promised that another bill will be coming along shortly, as Michael Marra mentioned. Despite Westminster’s track record, we are supposed to believe that, unlike what happened with the Criminal Finances Bill in 2017, resources will be made available to agencies such as Companies House to implement the legislation.

I fully support today’s motion, but I will have to reserve judgment as to the Westminster bill’s success.

Photo of Sarah Boyack Sarah Boyack Labour

In passing the legislative consent motion today, we are able to express our solidarity with the Ukrainian people, 2 million of whom have now fled for safety as their homes and communities have been destroyed in the past few days.

There is much more that we can do, and we urgently need the Conservative UK Government to deliver access to visas so that people who are returning with family members or people who have made the perilous journey to our borders are able to seek refuge here.

We stand in solidarity with Ukraine. We have seen citizens attending rallies and protesting in Scotland about the impact on Ukrainian citizens. We have seen donations to the Disasters Emergency Committee Ukraine appeal and fundraising initiatives across Scotland. Today, outside the Russian consulate in Edinburgh, artists were movingly reciting poems and singing to make human connections, using their right to protest and campaign.

The motion is vital because it is about tackling the issue of those who have extracted money from the Russian people and its economy and kept it for themselves to make them and their families rich. The kleptocrats did not just make money out of businesses; they then bought properties and land, including in this country, which has become more and more valuable over time. We need transparency and we need to end for good the influence of corrupt money.

We believe that the bill that is referenced in the motion does not go far enough. It will not stop the dirty money that has flooded into the UK economy, which Alex Cole-Hamilton mentioned. Action was promised in 2016, but that has not happened. Since then, we have seen £15 billion flood into the purchase of properties where the investors have been accused of corruption or having direct links to the Kremlin. We are impatient for action.

Our UK Labour colleagues attempted to amend the Economic Crime (Transparency and Enforcement) Bill to enable it to expand its scope to properties purchased before 2014 in Scotland and 1999 in the rest of the country, and to keep the current transitional period on properties to bring them into the scope of the regime being established.

As Michael Marra eloquently said, there is no logical reason why this must be the case. The whole point of our land reform legislation in Scotland has been to increase transparency, the beneficial use of our land and community involvement and ownership, so the examples that have been given in the chamber today are not acceptable.

We need transparency, so that people cannot hide their ownership and thereby escape the action and accountability that the legislation is intended to deliver. The issue of persons with significant control needs to be addressed now. We need transparency on all the land that is owned and registered in Scotland.

The people of Ukraine are suffering now. They need the accountability and the action that we can deliver in Scotland to put pressure on Putin’s regime. Anyone who has been at any of the demonstrations will know that it is hard to listen to their demands to act now. We need to listen to them and to do what we can.

I also say to the cabinet secretary that we need an urgent review of the ScotWind project, to ensure that no one benefits from our sea bed where sanctions should be imposed. Ethical concerns have been raised, and they should be acted on urgently. Therefore, I ask the cabinet secretary to say in his winding-up speech what action the Scottish Government will take on that issue to address those concerns and deliver transparency.

I welcome the cross-party support that we have had today for both the motion and the amendment. I particularly welcome the measured speech that Donald Cameron made and his support for our party’s amendment. We are not always going to agree in this place, and part of democracy is expressing that disagreement. I agree with the points that Michelle Thomson made about the need for more action.

In conclusion, both the Scottish and UK Governments must pull out all the stops to ensure that transparency is real and that we in this country do everything that we can to tackle the legacy of historical purchases by oligarchs and by those who have cosied up to those in power. It has to stop now.

The Presiding Officer:

Thank you. I call the cabinet secretary to wind up.

Photo of Keith Brown Keith Brown Scottish National Party

Thank you, Presiding Officer. I will try to address as many questions as I can in the available time; quite a few were raised.

First of all, I listened with great interest to the debate, and I am thankful to members for expressing their support. Sarah Boyack made the important point that these are kleptocrats who raised their money by fleecing the Russian people of billions of pounds, at a point in their history when they needed that money for their own public services. We should bear that in mind.

Over the past two weeks, we have been witness to the shocking actions of Putin’s regime, and I take on board Stephen Kerr’s point that it is Putin who we should keep in our sights. That regime has worked against the people, democracy and sovereignty and territorial integrity of Ukraine. The chamber stands resolute against that unwarranted aggression.

The reforms to which the LCM relate are intended—I would say that they are required—to help counter the illicit financing of land and property ownership across the UK by kleptocrats and oligarchs who support Putin’s regime.

Listening to Michael Marra, I thought that we were about to break into a verse of “This Land Is Our Land” as he made his comments. In relation to his point on Scottish regulations—I think that he was referring to the duplication of regulations, to which I referred in my opening speech—that will be a matter for the responsible minister, Màiri McAllan, to look at as she takes things forward. She will be paying attention to what was said here today. That also applies to the point that Sarah Boyack made about the sea bed. Those things can be looked at, as can the issue of the grace period being reduced from 12 months to six months.

Some of the issues around prominent persons are really in the gift of the UK Government, and not the Scottish Government, to deal with.

We want to see maximum transparency. A provision is coming forward in our own bill, which was long planned and will help us in relation to that issue. That, of course, can be looked at again by this Parliament—there is no inhibition on the Parliament looking at that.

In relation to Michael Marra’s amendment, I should say, just to be clear, that the UK Government did not ask to go back beyond 2014; in fact, I think that it is unlikely that it would agree to do that. However, there is no inhibition on us agreeing to the amendment, which I am happy to do. Perhaps, given that Donald Cameron has expressed his support for it too, he can have a word with his colleagues in London about it. That would add additional weight to it.

I also listened to the points that Michelle Thomson made. My colleague Ash Regan is also in the chamber and will have heard Michelle Thomson’s comments in relation to the Law Society and SLPs.

As I have said, the reforms to which the LCM relates are intended to deal with the illicit financing of—

The Presiding Officer:

Cabinet secretary, sorry—I ask you to take a seat for a moment. I am aware of extended discussions that are continuing while you are speaking, which I am certainly finding distracting.

I would be grateful if you would continue.

Photo of Keith Brown Keith Brown Scottish National Party

The tragic events in Ukraine have brought these long-standing issues to the fore.

Some members made the point that this should have happened some time ago, but it is undeniable that now is the time to lift the veil of secrecy and shine a light on who owns one of our most vital assets as a nation—our land—and to help to call out the corruption and ownership of assets that are purchased through unlawful conduct.

We want a Scotland that is, and is seen as, hostile to anybody who thinks that they can hide assets that were obtained by unlawful conduct. We support the unexplained wealth order provisions, which deliver key improvements to the effectiveness of UWOs as part of measures that will also strengthen the financial sanctions regime, which will do more to tackle corrupt regimes, businesses and individuals across the world.

On the measures included in the LCM relating to a register of overseas entities, the Scottish Government is fully supportive of measures to tackle money laundering and improve transparency of land ownership. Indeed, transparency of ownership has long been a key objective of our land reform policy and, as I mentioned, the Land Reform (Scotland) Act 2016 included provisions to establish a register of persons with a controlled interest in land.

It should be noted that UK ministers have committed to table an amendment to a sunset clause regulation-making power in schedule 4 to the bill to require consultation with the Scottish ministers before any regulations are made that impact on aspects that are devolved to Scotland.

To take up a point that Michelle Thomson made, I should say in passing that there is a lot further to go in the process, and we are taking quite a lot on trust from UK ministers. I hope that that trust is well placed and that the concerns that we have expressed are taken in the spirit in which they are intended, and are respected as we proceed.

As I said, we are entirely supportive of the sentiment behind Mr Marra’s amendment. However, I highlight that, if the bill were to be amended in the manner that he proposes, that would add little to the transparency regime in Scotland. That is due to the nature of how people had to register before 2014, and the nature of the records. People would have obligations after that was passed that they did not have then, which would create complications for taking legal action. I am happy to go into that in more detail, but it is a complex picture. Of course, our register of persons with a controlled interest in land will go live on 1 April. That will provide transparency for land and property that was acquired before 8 December 2014.

I also stress that time is short and that the UK bill needs to progress in an expedited manner to ensure that the register of overseas entities is up and running as soon as possible. As such, although we accept Mr Marra’s amendment, as I have said, we must recognise that there is no time for the UK Government to make the necessary changes.

The Scottish Government is content with all the ROE provisions that extend into devolved competence, and we recommend that the Parliament gives consent to the UK Parliament to legislate for those provisions. On reforms to the UWO regime in Scotland, the Scottish Government is supportive of the measures in the bill. As I have said, the measures that are included in the LCM will enable enforcement authorities to take more effective action against kleptocrats and serious and organised criminals who launder their funds in the UK, and they will enable UWOs to be sought against property that is held in trust and under other complex ownership structures such as opaque foundations.

I am sure that everyone in the chamber will agree that corruption and the purchase of assets through unlawful conduct are not welcome in Scotland, irrespective of from where the perpetrators originate. I urge members to support the LCM, the purpose of which is really to say—to go back to the song that I mentioned—that this land is our land, and it is not the land of kleptocrats and oligarchs. I ask all members to support the LCM.