 Welcome to the Justice Committee's 1915 meeting of 2017. Liam McArthur has indicated that he's been delayed at Kirkwall Airport but hopes to join us later this morning. Agenda item number one is consideration of the criminal finance bill legislative consent memorandum. This is a supplementary memorandum as a result of amendments to the bill being tabled at Westminster. Our aim is to report to the Parliament on the supplementary memorandum in time for the relevant motion being taken. We understand that the motion will be taken at decision time this afternoon, so obviously time is extremely limited, but we'll do what we can in that time to scrutinise it. I welcome Michael Matheson, Cabinet Secretary for Justice and his officials. Linda Hamilton, Deputy Director, Defence, Security and Cyber Reliance, Alistair Creeror, Head of Organised Crime Policy and Craig French, director of legal services with the Scottish Government. I refer members to paper 1, which is note by the clerk, and I invite the cabinet secretary to make a brief opening statement. I'll try to keep my introductory remarks brief. First of all, I'd like to explain the exhilarated timescale that we are now find ourselves working to with this particular LCM. The criminal finance bill has always had a tight list of timetable, and the Prime Minister's decision to hold a UK general election on 8 June has forced the process to be expedited further. While that may be unsatisfactory, the Scottish Government is keen to see the provisions in the bill apply in Scotland and the support of the supplementary legislative consent motion being agreed in line with those exhilarated timescales and in advance of dissolution of the UK Parliament. The bill is intended to strengthen the capabilities and powers that law enforcement agencies and partners have to recover at the proceeds of crime, tackling money laundering and corruption and counter-terrorism financing. The Scottish Government shares those objectives. Indeed, in our programme for government for 2016-17, we committed to pressing the UK government to strengthen proceeds of crime legislation, including enabling the police to seize betting, slips and casino chips from criminals. It is good to see those changes now being delivered. The committee has previously considered and reported on the original LCM, alongside my letter to you of 20 January and 24 February, and Parliament voted to pass the original motion on 2 March. The supplementary LCM sets out relevant amendments that have been tabled since my letter of 24 February. That is probably a good moment to confirm that the possible amendment to clause 51, which is now clause 53, the power to make consequential provisions, which I referred to in the supplementary LCM, has now been lodged by Home Office ministers and will be considered by the House of Lords today. In addition, amendment 2, part 10 of the Proceeds of Crime Act around information sharing, which was flagged up in my letter of 24 February and, again, in the supplementary LCM, has been expanded to include information sharing about two additional aspects of civil recovery—recovery of listed assets and forfeiture of bank accounts. I now make it clear that the Proceeds of Crime related information can be shared with HMRCS, HMRC and the Financial Conduct Authority. Those amendments, like the bill as a whole, are intended to further strengthen and improve the recovery of the Proceeds of Crime, and I would encourage the committee to support them. I thank the committee for agreeing to consider the supplementary memorandum at such short notice and helping to ensure that a vote can take place in Parliament this afternoon on the supplementary motion. John Finnie Good morning, cabinet secretary. Cabinet secretary, I have some very positive enhancements to the position that we were in earlier. Can you comment, please, on the Magnitsky amendment and how it is likely to manifest itself? Clause 12 of the Magnitsky amendment, which is included within the criminal finance bill, was voted on on 21 February. The amendment intends to allow for proceedings to be taken forward here within Scotland of the UK against an individual who may have been associated with breaches of human rights in another country. For example, if they have been involved in a process, it is involved in the abuse of human rights in another foreign country, and they are living here in Scotland or elsewhere in the UK. Their lifestyle is not reflective of what we would expect someone, given their tax returns in this country, to allow law enforcement agencies to be able to take action against them and to pursue those assets, given that they may be associated with the abuse of human rights in another country. Can you comment on the level of co-operation between law enforcement agencies and between countries, as well as is there any threat with Brexit? I do not think that this will be a matter for Brexit in itself, because the original part of this comes from a piece of legislation that was introduced in the USA, if I recall correctly, which followed the whole principle of the Magnitsky amendment. That is individuals who were involved in what we have seen the abuse of this individual's human rights in Russia, who had assets in other countries. The fact that they were held in other countries, in this case America, allowed American law enforcement agencies to pursue those particular assets of individuals who they believed were involved in the abuse of his individual human rights. It is not a case of co-operation from another country that will allow our courts here to make a determination on that based on the information that is laid before them and the assets that are held here in Scotland or somewhere else in the UK. In an entirely Scottish context, would you envisage that the Crown Office Procurator Fiscal Service Police Scotland would laze with organisations like Amnesty International, Human Rights Watch, to perhaps initiate inquiries? I have got no doubt that they would use a whole range of different stakeholders in order to draw together an evidential base around concerns relating to an individual and where they have been abusing someone's rights in another country. That would then be brought together and would then be for the Crown Office to determine how we would then take that forward. I will ask Linda Hamilton to maybe just expand in the process that the Crown Office would use, given that Linda was previously at the Crown Office and dealing with some of those types of issues, but it would use a range of different information sources in order to put together a case that they could then take forward in the courts here in Scotland. The cabinet secretary is absolutely right on that. The Crown Office will laze with international partners, as will Police Scotland, as is required to get information from that state, should it be required for the purposes of the investigation. What the unexplained wealth order does do is allow further investigation, strengthens investigation powers, if, for example, that country is not willing to share information. You can imagine that more hostile countries, if there have been human rights abuses, may not want to share information with Crown Office or Police Scotland, so the UWO powers just strengthen that and give a stronger investigative tool in order to get information collected at a Scottish level. On your Brexit question, the negotiations are very important in terms of making sure that Scotland is in at least as good a strong position as it is now in terms of investigations abroad and working with international partners. Would that require a conviction to initiate that particular aspect? No, it will not require a conviction that is civil based. Technical point about timescale. I understand that it is proposed that House of Commons be dissolved on Wednesday next week. I would be interested to hear whether we have had assurances from the UK Government that they expect to complete the process on this bill that is before the UK Parliament, before dissolution. We have. I wonder if Paragraph 17 of the supplementary LCM provides for the payment of compensation if property is wrongly frozen in relation to an explained wealth order. Compensation would be paid by the Scottish ministers. Under the Proceeds of Crime 2002, is there a provision for Scottish ministers to make compensation payments for wrongful orders? How much does the Scottish Government typically pay out in compensation per annum? Those provisions are similar to the provisions that we already have in the Proceeds of Crime legislation, so it is a similar provision that is created. What would happen is that the individual would have to show the loss or the serious default on the part of, in his case, a Crown Office or the Scottish ministers in pursuing the issue when they applied for an interim freezing order. That is a process that we already have in place for the Proceeds of Crime legislation. It will be similar for this legislation as well. It is not a new process extending that process into this particular area of legislation. Do you have an idea how much Scottish Government would normally pay out in compensation per annum? I do not have that to mind at the present time, but it would have to be a matter that would be raised in court by the applicants themselves. I do not know where Linda can expand on the extent of which that happens. The compensation provisions that exist in the Proceeds of Crime act already are there to protect people whose property has been wrongly frozen. They are very rarely used. People will ask for compensation sometimes, but the courts will decide whether that is appropriate or not. It tends to be that arguments may be made around good faith or may be made around whether the state has acted properly. Just because somebody has their property frozen and that property is thereafter shown to be legitimate does not necessarily create a case for compensation. Another intriguing bit of the LCM was—I wonder if the cabinet secretary could expand on the comments in paragraph 18 of the supplementary LCM about the increasing sophisticated ways in which criminals try to prevent the recovery of criminal gains, including the use of betting slips. Yes. As you can always imagine, individuals who are involved in this type of activity will seek to try to identify ways in which they can circumvent the existing provisions that we have in the Proceeds of Crime. Originally, there was provision made within the particular bill to include casino chips, because that was being used as a way in which to try to circumvent the Proceeds of Crime regulations that it stands. The former Lord Advocate in Scotland raised the issue of betting slips being used. Those fixed odds betting terminals tick it in, tick it out processes that were being used as a way in which it is almost a way of laundering cash. It has been identified by the Crown Office here in Scotland as an area where they had grown concerned that it was being used in order to circumvent the Proceeds of Crime legislation. That is why I raised the issue with the UK Government as a need for us to make sure that we close down that loophole and the amendments that have been brought in will assist us in doing that, which will now allow those issues to be pursued through the Proceeds of Crime process in a way in which we can for other areas where we are trying to pursue those types of assets. It is an example of the way in which individuals who are involved in that type of criminality will always try to find loopholes. We need to make sure that we continue to close them down as and when they arise. It was particularly interesting having met representatives from the gambling industry, just how alertly we are and aware of the possibility of laundering and the kind of measures that they have put in place. I was intrigued to see what that referred to. Finally, for the avoidance of doubt, is the Cabinet Secretary and his officials quite satisfied that you have had sufficient time to look at the provisions in the supplementary LCM? I think that it would be stretching it to say that we have had sufficient time, to be perfectly frank. It has been very difficult to deal with this piece of legislation because of the very constrained timeframe that it had from the very outset. Although we have been working hard with officials at the Home Office around the areas that we have been looking to have addressed, it has been a challenge in time frame. It is certainly not what I would hold up as an example of how things should be done between the two parliaments. That has been added to further as a result of the calling of a general election, which has constrained the timetable even further. I suppose that the main point is that you are satisfied that the powers that are appropriate and sufficient will be legally robust, even in the shortened timetable that you have had to look at the provisions. As I said in my opening comments, the reason that we want the committee in Parliament to support the particular supplementary LCM is because the provisions that are being taken forward, which require the supplementary LCM, are very useful to a law enforcement agency in Scotland. Although the process is not a good example of how it should be done, the benefits that will come from what is intended within the legislation, I believe, value to, particularly to the police in the Crown Office. I thank the cabinet secretary and his officials for attending the committee today at very short notice and providing that information. The clerks understand, as I have already said, that the debate on the motion is to be taken in the chamber this afternoon. Our members are content to delegate authority to me as convener to clear the draft on the report. It should be published before the motion is taken in the chamber this afternoon. That will also note any comments from the Delegated Powers and Law Reform Committee, which is meeting to consider the supplementary LCM at the same time as this committee. Are we agreed with that approach? Stuart Stevenson, yes? It is a very short time, and we have heard about that. Can I ask that you consult at least one other member of the committee, just to make sure? I do not name who. Why do not I consult the deputy convener? That is right. Thank you, convener. I am happy to do that. I now suspend briefly to allow the witnesses time to leave. 2. Is consideration of a negative instrument on damages personal injuries in Scotland order 2017, SSI 2017 oblique 96? I refer members to paper 2 and ask members if they have any comments. If members do not have any comments, then is the committee agreed that it does not wish to make any recommendation in relation to this instrument? Agenda item 3 is feedback from the Justice Sub-Committee on Policing on its meeting on 20 April. I refer members to paper 3, which is not by the clerk, and invite Mary Fee to provide the feedback. The Justice Sub-Committee on Policing met on 20 April when it took evidence from the Scottish Police Federation, Unison Scotland and the Association of Scottish Police Superintendents on financial planning and policing 2026. The Sub-Committee heard that the unions and staff associations would like to be more involved in financial planning discussions and to see the views of their members taken on board. The Sub-Committee hopes that that is the case going forward. The next meeting of the Sub-Committee is scheduled for Thursday 11 May 2017, when it will hold a round-table evidence session on local policing and the role of local police commanders. Thank you very much. Do members have any questions? Nope. No questions. We will now move into private session. The next committee meeting will be on 2 May, when we will consider public petitions and our future work programme. I spend briefly to allow members of the public gallery to depart.