 Welcome to the 26th meeting of the 2018 Environment, Climate Change and Land Reform Committee. We have no apologies today. Before we move on to the first item in the agenda, I would like to remind everyone present to switch off their mobile phones, as they may affect the broadcasting system. The first item on the agenda is for the committee to consider whether it is going to take items 4, 5 and 6 in private. Are we agreed to do that? Yes. The second item on the agenda this morning is to take evidence on the Land Reform Scotland Act 2016, registered of persons holding a controlled interest in land. Scotland regulations 2021 and draft. We have been joined by Megan McKinnis from Global Witness, Dr Callum McLeod from Community Land Scotland, Jason Rust from Scottish Land and the States, John Sinclair from the Law Society of Scotland and Anne Stewart from the Scottish Property Federation. Welcome to all our guests. We will move straight on to our questions. In looking at the submissions from you all, most if not all of your organisations have made comment on the issue of whether it is right to have separate registers for registration and controlling interests. It is a good opening question for everyone in the panel just to start the conversation off on that. The consolidation of the land registration data to include controlling interests has been more effective than the creation of a separate register. I wonder if I can maybe take you from my left to right on that and get your views. Thank you, convener. Thanks for the opportunity to come along to address the committee. At Scottish Land and the States, our starting point during the early consultation was that we felt that to have another separate register was perhaps too much and we should be looking to consolidate and perhaps including this type of information within the land register system, because obviously we've got the land register, we've got the season record, we've now got new registers coming on board in terms of abandon and neglected land and sustainable development, as well as the crofting registers and what have you. There was certainly a concern from the Scottish Land and the States perspective as to the potential burden that would place on the keeper. However, in discussions with the Scottish Government, the approach that was being pursued was the idea of having a separate register. We have come right into the fact that that is the direction of travel and I think our key concern now is just ensuring that what's there is workable in practice and is as clear and transparent as possible. Thank you very much, convener, and thank you to the committee for the invitation to come and give evidence in relation to this really important issue in Scotland's on-going land reform journey, I suppose. I think that Cymru to Land Scotland's position initially would be that it would have been in an ideal world useful to have all the information in a single consolidated integrated register. Clearly that's not the position we're in now because there are, as we know, several other registers that separately hold information with regard to various aspects of land ownership and other aspects of tenure and so on. That being the case, I think that Cymru to Land Scotland would suggest that the key challenge then is to make sure, and we said this in our submission in evidence, is to make sure that the register that will be introduced as a result of the regulations is as cohesive and as integrated and as accessible as possible in relation to the information that's put in it, but crucially as well in relation to the users of the register too. Clearly we're going to come on to, I'm sure, a variety of issues in terms of the enforcement and implementation of that register, but these are the critical elements. We are pleased because we said it in our evidence to see that the use of the register is going to be free as we understand it. That's a helpful development. We think that the key challenges are about how this is going to be implemented and the challenges associated with that. Thank you very much for having the chance to speak today and give evidence. Before I start, I'd just like to say that I'm here representing global witness only. I'm not here in my capacity as a land commission, so nothing I say should be taken as a representative of the position of the land commission or the Scottish Government, so I just wanted to have that on record before we start. I think I'm going to say something that very much reflects what the two speakers have just said, in which is that initially global witness had also taken a position that the best approach for a register of who ultimately owns land in Scotland would be best placed as part of Scotland's existing land register. We agreed with the range of different reasons why we thought that there was the best way in which it would be easy to access that information. Again, we are on a different path in terms of how these registers now operate. Again, our concerns now in terms of the draft regulations that have been produced are that they are user-friendly, they are easily accessible for the general public. The purpose of the register is a public interest purpose in terms of making access to this information more easily accessible. We hope that by combining access to all of these different registers through the gateway of the Scotland system that that will overcome some of the problems that we currently see in terms of thinking about how these registers will be integrated. That's our position on this. We had initially recommended at the start of the process when this was a proposal in the land reform bill, but we think that using the Scotland as a gateway, as a portal to access this information, is a good solution to the route that's been chosen. Thank you. The law society's view is that there should be separate registers. The land register is a register of ownership of land. The register of controlling interests is focusing on different issues. We thought that if you were to bring the ROCI into the land register it would cause confusion and disrupt the land registration process. I would tend to agree that the accessibility is an important part of it. Also, finally, the information will be fragmented anyway between separate registers, and so it's not just the land register and the ROCI. You have persons of significant control, and then you will eventually have a register of overseas entities. To explain, you said that you would disrupt the registration process. Could you give us a little bit more detail on what you mean by that? To unpack that, the concern was that the more information that was put into the land register that was not relating to ownership, it would cause confusion, that there would be concerns about whether or not you needed the third party's consents to do any transactions on the property. It would invite people to bring in issues that were not core to transferring land. I wonder if the register, as it currently exists, has already crossed that line. For the sake of argument, things such as registration of heritable right of access to a bit of land will be in the register, but it is, of course, not associated with ownership. Similarly, the granting of a real burden that relates to a heritable right of access on the part of another person would be the same. Is not the principle that there is information about other people that does not relate directly to transactions on land already in the existing register? Yes, the register goes beyond ownership and deals with other real rights in land, real burdens, servitudes and securities. I think when the 2012 act of land register was brought in, there was a debate about whether or not the status of, for example, matrimonial homes were to be brought in, and I think the policy decision at that stage was made that the desire was to keep the land register real in the sense of real rights, hence servitudes, yes, burdens, yes, securities, yes, ownership, yes, but not things like matter of consent or non-entitled spouses. There is, with things like public rights away, there is a range of information that can be put into land certificate that is not real in the same absolute sense as ownership of real burdens or servitudes, but which still will bind successors. I think that the issue with controlling interests will be that they do not tend to relate to real rights. The issues of influence and control are more nebulous, and so, for example, there might be a concern that if someone was listed as having influence or control that their consent would be required. There is no hard legal analysis for why that would absolutely be required. It is simply that it is the sort of information that will invite people to ask more questions than are absolutely necessary. That sounds like we are trying to hide information. It is more about keeping the transfer of land simple and objective. I thank you as well for this opportunity to give evidence on behalf of the Scottish Property Federation and its members. I think that there are a variety of different views amongst the membership. Principally, we think that pushing on with the completion of the land register will be a significant contribution towards transparency of ownership, although I appreciate that we have a slightly different issue with the controlling interests. Certainly, our clear view is that whatever the process is—whether it is a single register or a separate register—it should be simple, straightforward, should not be a hurdle or an obstacle to inward investment into Scottish land and property. I personally think that there is a lot of information that the registers must have, their statistical information and so on, which, where their resource available, would allow them to establish quite a bit of the information or to interrogate owners of land based on what information is already in the land register, harder to interrogate the saizine register, of course. However, I think that that is impractical from a resource perspective. There is an appeal in terms of simplicity to have an extra box that you can take on an application form or something of that sort that would populate this information. However, I think that that has to be tempered by the concern over access to that information, and access to some of that information from a commercial perspective can be commercially sensitive. How this information, whether it be in the land register or in a separate register, can be accessed and by whom and for what reasons is also something that needs to be given consideration? My colleagues will have some questions on that. I am going to move on to John. Thank you, convener, and starting where Anne Stewart has just finished and discussing the process of accessing information. Both Global Witness and the Community Land Scotland highlighted the process of accessing information in the register as potentially onerous. Anne Stewart has already highlighted concerns about that. Others might want to just talk about what are the key concerns of the proposed process of accessing information. How could the process of accessing information be simplified? Should it be simplified, but how could it be? Access and simplification. Do you want to carry on? Scotland has been mentioned already. Scotland is potentially a model because there are two tiers of access to Scotland. There is the open public access, which provides a limited amount of information. There is access by registered users, and, largely at the moment, legal firms will access Scotland through their registration for other services, application forms and all the rest of it that we need for land registration. There is a paywall there through which you go to download certain information, but there is still quite a bit of information that is free. If Scotland is going to be the vehicle or the receptacle for this information, if it is going to be an element of that register, then that slightly more restricted access would mean that people with a genuine interest in accessing that information had that step to go through before they could retrieve that information. That is one approach. Others have views on the difficulties of accessing information? Yes, this is something that we had picked up on in the submission that we put forward. In our view, this is not necessarily a particularly user-friendly model that has been put forward in the draft regulations. It has also been made further complicated by the fact that the draft regulations are excluding certain entities that currently own land because of the fact that they are already providing beneficial ownership information to other types of registers, such as the PSC register at the UK level. The consequence of this is that if a member of the public wants to access this information about who owns a particular piece of land, there are a number of steps that they will have to go through. They will have to first access the land register or the register of satins to find out who, to find the name of the entity registered as the owner of the land. Then they will have to work out what type of entity where they can find the beneficial ownership information for that entity and then go to the correct register to access that information, whether it is this new register of controlling interests or the PSC register, for example. Another third layer of complexity has been introduced by the UK government's proposed new regulations on foreign entities, which will create an entirely different register, also managed by companies house at the UK level. This is not necessarily a very easy system for people to navigate, especially those without legal knowledge or advice of how the routes of how to access this information. The fact that it is free is something we've been very supportive of and we certainly think that reduces one of the barriers, but it's not the most straightforward way of accessing this information. In terms of how it, you asked how it could be simplified, we are struggling to come up with simple ways for how this could be simplified given the routes that the government has chosen to take in firstly creating this as a separate register and secondly excluding certain entities from the registration requirements under this draft regulation because those inherently create complexities within the draft regulations that we have here. It's difficult to see a way of simplifying those things. One element though we think that does need further consideration is whether or not this balance between the need to avoid a problem of double reporting, which was a justification for those exclusions, is balanced against the public interest purposes of this regulation and the extent to which it's a primary purpose in terms of the public interest is being met. The other consideration which I expect we'll come to later but I just want to mention now is that there's a difference between information which is required by the register, any register and information which is then being publicly disclosed and the PSC register for example at the UK level requires some information to be registered by in this case company's house but not all of that information is actually publicly accessible so we can also consider there's a two-tier system that could be used here as well where you can address some of the issues that are in concern and raised around commercial confidentiality issues so that's another possible solution but without knowing the details of how this is going to work yet which we don't yet have in the regulation it's difficult to know the extent to which that would be potentially a root of simplification. Dr McLeod wants you to come in as well. Thank you, there is a temptation for you just to say yes what she said but I'll resist that and move on. I'm trying to put myself in the position of somebody who would be wanting to use this register in practice all of us probably I would have thought one way or the other and frankly it does seem like a fairly daunting prospect. This is just an observation. You had 12 responses to this, your consultation, your written responses I think. Is that correct in terms of this? Now on the one hand that might suggest that there's a lack of interest or demand for people to know in relation to these issues. I think the opposite is the case. I think people, I'm talking about the general public here, need to have a better sense and be better informed in terms of what ironically the information rights they have or will have in relation to these issues actually are. So I think there's a big public awareness issue that needs to be driven through in terms of this. That's a more general comment when the regulations come in. But if we're talking about the actual accessibility of the register itself, I think what Megan says is entirely correct in terms of the mismatch between potentially this register when it comes through and the other ones. But what are the kind of electronic links that you can actually put in to actually link into this register and other ones as well? What is the type of information that you can provide in relation to that, whether it's through specific instructions and so on in relation to that? And also in terms of the level of data that's provided to, I think it would be very helpful to actually have a kind of open data perspective in terms of how this is deliberative practice. In other words, enabling people, the public primarily and other more specific stakeholders as well, to actually have access within the bounds of commercial confidentiality, of course, in respecting all that, have the scope to actually access as much of this data as possible, frankly. So there's issues around how you access it and what the mechanisms are in terms of that. So these would broadly be where you would put that. But absolutely recognise our challenges, of course, of doing that in practice. Jessica, it's a short question, and I've got time. I'll come to Stuart Stevenson. Mr Sinclair wanted to speak first, I think. Sorry. In terms of accessibility, there are I think two ways generally ways in which you're going to be looking at this register. One is going to be from the top down, looking at the people that have controlling interests and whether one individual has controlling interests over a large number of properties. The other is going to be from the bottom up, where you have a piece of land, where you wish to work out who actually is controlling that piece of land. And I think that the accessibility of the register, which is absolutely key to, there's no point in having a register if it is not accessible and useful. But looking at those two particular or two different purposes in accessing the register, you have two different issues or you have different issues with accessibility. For the top down approach, where you're looking to try and understand how much land is controlled by a particular individual, then that would generally be the name searching function. And on that basis, it would be useful to have much the same information as is contained in the PSC register, as is contained in the ROCI register. From the bottom up, Scottless is a wonderful thing and is just going to get better with time. Scottless is a very easy tool for finding land that is registered in the 2012 land register. It is less useful when you're looking at sazing titles. And so for sazing titles, you're generally reduced to searching against a verbal description of the property. And that can actually be very, very difficult. And so the point I'm really moving to making is that one of the issues with accessibility is going to be searching against sazing titles. But it is an issue that will be getting better over time. And so the need, it will become easier to search the register as time goes on and as completion of land register proceeds. Just briefly, I mean, how many, as a layperson, how many registers are there likely to be with the UK overseas entities register, the crofting register, the existing registers, just roughly, are we talking five, seven, give, taking disclosures in as well? What we're looking at here, how are people going to know which one to go to? I don't have a list, I'm afraid. But I mean, off the top of my head, at the UK level, you'll have the UK companies in company size. You'll have the new register foreign entities. Then we'll have, in Scotland, we'll have the land register itself. We'll have the register satins, although hopefully everything will be merging into the land register. You will have this register. You then have the crofting register. And then you have all the other registers that the keepers are responsible for managing, such as the various different registers around the community right to buy and other burdens and the piece of registers which are for a specific relationship with a piece of land. So that's at least six. That's enough to be going on with. Thank you. Gwyn Dynard Jason. You didn't particularly major on this yet, of the accessibility in terms of how you access, as opposed to more of the actual, in terms of the physical access, it was more on the actual accessibility of the regulations themselves, which almost the next stage, is simply to add that. Thank you. Stuart, you have a short supplement. Very specifically to Dr McLeod, what would constitute proper commercial confidentiality that would mean information should not be disclosed? I can think of none. I do accept, for personal safety reasons, there might be reasons. But for commercial confidentiality, give me an example of a legitimate cost. When you say that I can't think of an example, there's a problem. Right. I see the law that might be an approach. If allowed. Yeah. I think that's a good question for Anne Stewart, because you were the person that brought this up in the first place, so perhaps you could… Well, probably generally examples rather than specific ones. I mean, certainly financial information that could be confidential, perhaps, that could affect the way the market perceives certain organisations and that sort of thing. Sorry, may I interrupt and say, we're generally talking about first, second charges and so on and so forth, which should be registered with titles, but they're registered precisely so they are a matter of public record, aren't they, for example? Yes, sir. What I was meaning was the information about the extent of the shareholding in a particular organisation by a person who has control, that kind of information. Sorry, under the Companies Act, share registers are publicly accessible in real time. For example, for the overseas entity, there's a sort of percentage which is similar to the company's register. There's a percentage under the stock exchange rules whereby they have to declare and there are levels at which you have to then bid for the rest of the company and so on and so forth. Also, let's not go there, but it is a matter of public record. I'm just struggling to know why, for commercial reasons, there is any reason it would ever be tonight. John Sinclair wants to come in and then we'll go to Megan McHennais. Mr Sinclair. One of the areas we had discussed in the Law Society was a scenario where you have a company which is about to be sold. I think if that company entered into exclusivity agreements or a lock-out agreement to prevent it dealing with its assets, then I think technically that would then, the company that entered into that arrangement would technically be an associate and would therefore need to be disclosed on the register, which means that there would then be a public record of a discussion that would have legitimate reasons for being commercially sensitive if nothing, and would also, if the information got out, would cause disquiet amongst the employees of the company, the registered proprietor. How does that cut across the need to advise the stock exchange of things at where it's a quoted company? That I cannot comment on. We may be convenable, but we'll move on. I made the reference to commercial confidentiality at the fact that often you have registers that operate in two different levels and not necessarily everything which is given to a register is then publicly disclosed. Global witnesses' view from the very beginning is that because of the fact that this new register is trying to improve transparency around the ownership of land, for the reason that we currently don't know who owns and is ultimately behind some pieces of land, there is clearly a reason why there are some entities who want to who have up until now wanted to remain anonymous. Therefore, we think it's very important and we agree with what's proposed in the regulation that there's a very, very, very specific and narrow reason simply to do with what's described in the security declaration of what information should not be disclosed. We are happy with that. When you're talking simply about the information which is going to be proposed by this regulation which is around the name and the contact address and those very specific information, we're happy with what's proposed within the regulation. It matches with the PSE register and international standards. I think to expand that list of the information that shouldn't be disclosed any larger would be creating loopholes, which would result in the regulations not having the desired effect. Calum Clyde, you've got a very brief comment in relation to what Mr Stevenson said and colleagues on the panel as well. You can probably tell that I'm not a lawyer on the panel, I'm the one on the cheapsuit, but it's really, I think it is important to stress that point in relation to what the policy thrust of this set of regulations are and the register is in relation to transparency ultimately. Just to reiterate what Megan is saying, it is really important, we would suggest, to keep the exclusions or reasons to exclude information or access to information to a minimum, quite honestly, in relation to that because we've seen it in submissions, but I'm sure we'll come to it in discussion in the session. There are lots of reasons thrown up as to why not to do things, but there are also really important reasons as to why to do them and what this committee and what this Parliament has been doing over the last number of years in relation to transparency and ownership aspects in relation to that is about trying to shed some light in relation to that, so I just think that's a really important point to bear in mind, which I'm sure we all do. I know that Anastasia wants to come back in, but I'm not sure that there will be an opportunity for you to make your point later. I'm going to go to Richard Lyle for further line of questions. Mr McCallum made a reference to submissions. That's one good one from the Law Society, I'm sure Mr Sinclair will want to respond to us. In the submissions of the Law Society of Scotland, we're certainly not happy with two particular sections of Regulation 2. Section A, the Law Society is a view that expression 2A directs the activities of another as open to wide interpretation and similarly 2C is considered open to uncertainty. The Law Society of Scotland believes that adopting much of the language and the terminology of the PSC regime, people with significant control, must be maybe misguided, so could I ask you in particular, and I'm sure other people may want to respond to that. Mr Sinclair, what makes you believe that wording in Regulation 2 is open to wide interpretation and, as it is drafted, why is it not significantly clear to avoid uncertainty? The first time I've stumped a lawyer. They are nebulous in concept and hard to objectively demonstrate, which doesn't really add much to the response. For example, in 2C, you have significant influence as a reference to where a person is able to ensure that another person will typically adopt the approach. As a rule to apply, this has got lots of difficulties with it. The concept of typically could require an analysis of a pattern of behaviour. If you're looking at patterns of behaviour, you have to consider what period of time you're looking at for the pattern of behaviour, what degree of variance between always adopting the approach that's recommended, or typically adopts the approach, which means it's not 100 per cent. Is it 99 per cent? Is it 90? Is it 85? Or is it a typically adopted approach in relation to certain types of matters? You then have a juxtaposition between the word ensure, which generally means that something is bound to happen. You juxtapose ensure bound to happen with a typically does something. There is a difficulty in understanding how that wording will actually be implemented in practice. I'm not saying that we could come up with anything better in terms of an absolute test, but I think that the idea of fuller guidelines being produced in terms of examples and models of what would count as typical would be very, very helpful. If only because you're then expecting someone to decide at what point in time has something become a typical pattern of behaviour. Inevitably, when you look back at something with hindsight, it then becomes very uncertain at which point you hit the tipping point between it being typically or less frequent. If you're going to back this up or you're going to enforce this with a criminal sanction, we were keen that it would be simpler and easier—or not easier but simpler—and more objective to be able to identify whether someone was or was not about to commit an offence or had committed an offence. Do you have concerns about extending the role of the trusted advisor to often held by professional advisors? Are they in order to progress us? Are there other problems resulting from the use of terminology from the persons of significant control? If there are, how should these concerns be addressed? In terms of the last point, how these could be addressed, it would be better for us to produce a further written response to that rather than for you to have me answer that off the cuff. Second anomaly from a solicitor. The trusted advisor point—again, it shows you the difficulty between the boundaries between a trusted advisor where, if a trusted advisor is good, then more often than not, perhaps typically the advice that they give will be followed by the client. If you compare that pattern of behaviours where there is a correlation between advice and action taken by the client, that does not necessarily mean that anything other than that the advice is good and well measured rather than exercising a significant control. For the exceptions that you have for paid advisors, it is an exception for a paid advisor only when that is their only function. To finish this up, unlike anyone else's, any other comments, do you have any problems with the use of the terminology from the person of significant control register? Do you have any problems with that? I would prefer to answer that or produce that or provide that in a further written response. I look forward to it. I do not want to comment on the lost sites submission, but I think that one of the ways in which the PSC register has overcome similar problems where you are trying to find ways of creating clear definitions of quite nebulous means of controlling an entity and controlling the decisions that are made around that entity is by providing specific examples in the explanatory notes that can demonstrate situations that would and would not fall under the intentions of the regulations. That is one way of addressing the degree of complexity would be to be asking the Government for more examples in a further explanatory document. I just also wanted to touch on this question of whether or not the PSC register and terminology are useful or not for what we are trying to achieve here in Scotland. I think that we would take a slightly different position than some of the other members of the panel here in terms of the fact that we do think that the PSC register is quite a useful mechanism that Scotland can learn from for two reasons. Firstly, the fact that historically the concept of beneficial ownership, whether you are saying beneficial ownership or whether you are using other terminology such as persons with controlling interests, is not something that was created purely for anti-money laundering and tax-focused efforts. It has actually got a concept in law much older than that, which is around the need to get clarification around one who enjoys the benefits of a property or owning an asset without being the legal owner. It is the underlying concept there. The PSC register is one register that brings that concept into practice. There is a particular mechanism. The Scottish Government is trying to do something using a different mechanism for a different purpose but using the same tool in terms of the clarity around how the benefit is gained and the control is exerted over that piece of property. We should not be distracted from the fact—there is a lot that can be learned from the PSC register in terms of how it has worked and the terminology used that is useful, even though the purpose of the PSC register is for addressing money laundering and tax issues, rather than the purpose of this regulation is around transparency of land ownership. We need to be careful to not—the purpose might be different, but the mechanism can be the same. There are some very useful lessons that can be learned in terms of how the PSC register has worked up until now, which we gave some examples in our submission. We think that the Scottish Government could do well to learn form in terms of making sure that the register does not fall through some of the same hurdles, because it is extremely complicated and setting up registers like this is not easy to do. Just to touch on the member's point regarding the linkage with the persons of significant control, I think that we would agree with many of the points that Megan has made in terms of the purpose might be different, but the mechanism could be looked at. A concern, for instance, that we had was that in part 2 of schedule 1 at point 4, where it relates to compliance, the draft regulations actually relate to a definition of the persons of significant control, and we think that that sort of things might be of concern for your look at these regulations, but then having to go and look at further regulations elsewhere to understand exactly how you would comply with those. I was moving on to part 2 for the information that is laid out in the register. I think that you have probably been all over this next question. I was going to ask how the terms controlled and significant influence could be misinterpreted and in what instances that might be what someone sets out to do and whether there needs to be further definition or explanation, but on the back of that I would also like to ask does the panel think that there are any grounds for it being made easier to avoid identification by not recording the home or permanent address of the recorded person? Tackle that first. The first part was just in part 2 of regulation 3, the terms again. I think that we probably covered it, the terms controlled and significant influence and in what instances do you think those could be deliberately misinterpreted and should there be more definitions to avoid that? That was the first part of the question. I think probably from what John has said that greater clarity about what significant influence or controlling is actually supposed to mean would certainly help, because I think there are going to be instances where you will look at a pattern of behaviour or a relationship between owners and non-owners of a piece of land and not be able to say with certainty yes, you are on this side of the line and you fit the definition or not. There will be instances simply because of that, the typicality of that behaviour where that's going to be difficult. So yes, I think there certainly needs to be a clearer and probably rather than running on for pages and pages in terms of a definition, John's suggestion of plenty of examples. I think the explanatory notes are, the legislation requires the explanatory document to give reasons for all of these things and examples and that sort of thing would clarify that at the moment that's absent from the explanatory document. Anyone else want to answer that? John Sinclair? I think the test is always going to have to be nebulous because you're dealing with things like influence and control and so yes, the idea of having more examples to give people greater guidance as to what is or is not going to be satisfying that test would be very helpful. In terms of your question about the home address, I think that the PSC requires both a home address and a service address. I think the purpose of the address is to allow you to identify that one person named something in particular is the same as another person named that thing and so the idea that you can use an address to identify the individual precisely I think is a very very useful tool whether it needs to be a home address or a service address is I think less significant given that part of it is to identify the individual, part of it is to allow access and contact with the individual and so long as the individual is obliged to provide the same address for every entry on the register, you would be achieving the same result whether it's a personal or a service address. I have some questions around that. If you don't mind can we now just hear from other members because I may not need to ask questions depending on how they respond if that's all right. Megan McKinnon Yes, thank you. I also want just to touch on the member's second question around this question of residential addresses or other ways of making sure that we're really able to identify the correct person in terms of who the person with controlling interests are. Certainly from global witnesses perspective there is there is concern and this is demonstrated by the the way in which the PSE register has operated until now that having a month and year and name of the of the individual isn't isn't enough information to be sure that you can definitely find the right person. There are a number of solutions to this. I think one of the one of the problems of having a residential address is that there are issues around security which have to be recognised in relation to publishing residential addresses and alternative solution to this problem which the global witnesses have been recommending is that unique identifying numbers are created for each individual, each natural person, the first time they enter their information on this register and that it's the unique reference number which is the way in which you can then check how this person is then also having to register subsequently in the same register because they are controlling person in relation to other pieces of land and property. That's an alternative way of addressing this which overcomes some of the challenges around security of having a residential address included in the register. Jason Rusk wanted to make some comment on this. Yes, it's more in the first point really to agree with the points made by Ann and John earlier about the importance of the explanatory document and having further examples because I think that a certain concern at Scottish land and estates was just about the, we mentioned part two earlier, but also part one of schedule one, just the ambit of these regulations and the scope and to the extent to the types of category of person that they will apply to. For instance, when I think it states in the explanatory documents that a cohabiting partner spouse would be exempt but that's not necessarily clear from the drafting and also the business that we discussed earlier in terms of professional advisers and the fact that in many instances a professional adviser in their paid capacity may be exempt but in other situations where they're acting as an executor or what have you they might not be and I think it's just maybe getting clarity through examples either through the explanatory document or potentially through schedule two and actually having a list in there of the types of persons to whom they wouldn't apply. I just see an analogue with the company's act of regulations in relation to shadow directors. Is that a reasonable place to look for whether someone should or should not be and of course there's a lot of case law around that. I need to check that and come back to you but certainly there will be other examples out there I'm sure that I mean I think essentially what we're after is something fairly straightforward that may not be able to just be picked completely off the shelf of another act but yes I'm sure there is a basis for it. It may be worth saying I am not a lawyer contrary to mere mathematician. Just to pursue these issues a little further obviously the purpose the main purpose as we've heard this morning is the public interest purpose of these regulations and that's for a range of reasons but mostly well maybe not mostly but one of the important reasons is the accessibility from those who want to further their possible interest in the purchase of land and land transparency is absolutely fundamental to that. So I wonder if we could just tease these issues out a little bit more about a service address and the possibility and this is not to in any way disparage a professional professional's need protection professional advisers need protection but if the address is only goes as far as the professional adviser there seem to be all sorts of ways in which if anyone and I stress if anyone wished to hide what they owned or hide that they were the owner or not just at the point of sale which is complex I agree but in a general sense because there are these problems in Scotland then what is the very best way to be most sure that we can find the owner of land or are there lots of ways to have to come together it's a bit of an unfair question perhaps but I really want to tease this out why shouldn't we apart from security sorry but apart from security reasons like in relation to if there's somebody who has been the victim of domestic violence or something of that kind which is a confidentiality issue but I don't think that in my view there aren't reasons commercially for that so let's just tease this out a bit more please Helen Claude I think it's a really important question I genuinely cannot see a reason why that type of information should not be fully accessible to the general public for a very important and powerful public interest rationale basically in terms of that there are many communities throughout Scotland in rural settings and in urban settings as well that are often looking to to buy land and in community ownership which is obviously the organisation that I represent in terms of membership there and in order for them to do that in some instances clearly they need to know who is the controlling interest in relation to that so I think the public interest test is pretty clear in relation to that and so I cannot and I don't think community land Scotland would be able to mount and you wouldn't expect us to convince an argument as to why you shouldn't as a member of the public as a community group or organisation have as much accessibility in terms of that level of information as possible in relation to that now what that means in practice in relation to the type of data that's included well I think we would certainly echo some of the previous comments in relation to making sure that the points of access and the types of information are as full and as robust and as verifiable as possible in relation to that yes I think there is a bit of a difficulty though because the member give one example of perhaps individuals trying to find out who owns land because they're interested in buying it but there are probably many reasons why people might want to find out who owns land and there's a sort of fundamental question which isn't really addressed in these regulations is who are you trying to find and why are you trying to find them and it may be a completely different person if you want to you're interested in buying the land than if actually somebody's trees fallen on your garage and you want to find out who you know can can deal with that and there will be perhaps different people will be the the person to contact depending on the circumstances so to say that you know there's one solution which will will fit them all if you could explain because I don't understand what possible reason could there be for secrecy and lack of transparency I mean what you know what what is there to hide in terms of land ownership I don't understand well I think we were we were talking earlier about residential addresses which is where this this this came from and certainly I think there is that the security aspect of that people may well be perfectly happy to know that they are the owner of land but they don't necessarily want somebody coming up to their front door the identity of the person who's forgive me for Claudia so I mean that's what you're meaning it's the identity of the person the contact ability as well convener and I mean I think maybe if that's all right Calamonder to add something to that Calamonder sorry mr students but just to come back back on that you know the question of who owns Scotland for for long enough the answer to that question has been passed that is not acceptable in a progressive democratic society which is what Scotland is and what we collectively as a as a as a country actually hold ourselves up as and frankly you know in that context it should be perfectly possible in fact not even difficult for interested parties to actually find out that kind of basic information frankly Megan McKinnis wants to make a point then I'm going to move on to Alec Rowley's questions yes I mean I would I would agree very much with the question and what Calam has just said in terms of ultimately we have to you know we should and must be able to know who ultimately owns land global witnesses concerns with this in regulation is is actually much deeper than than the question you just asked because it's not just a question of whether or not it's the service address or the residential address or an email or you know should you know is email better than sending a letter as I know I think you discussed with this sponsored with the policy team when in the previous hearing there's actually some there's some questions we have about the fundamental the nature the fundamental way that these regulations are structured which I think also do not will not let us ultimately know who owns the land there is for example it's not clear from regulations that they will actually be able to always ultimately disclose the natural persons the human beings behind the land in some cases it's only going to end end up taking us to yet another non-natural legal entity this is demonstrated in diagram 4 in the regulations where you end up with just a trustee and not going any further um you have this problem as um as the this submission may be by Andy Wightman MSP where he shows just a circular control structure which ultimately will just take you round and round in circles um we have concerns about what's being proposed here and at the UK level for the PSC register of the 25% voting threshold and the regulations the draft regulations to give an example where where the 25% threshold for voting you would you would end up with a number of entities holding less than 25% who again aren't required to disclose ultimately who the non who the natural persons are ultimately having that controlling interests so that's one area where we think that the regulations aren't clear and won't even as they're drafted at the moment won't let us get to that that natural the natural persons at the end another concern is that the way in which the regulations are drafted it's not clear yet how a member of the public will know if the register of controlling interests is complete or not there's no way of knowing at the moment in the way that the regulations are drafted as far as our analysis is is it's not possible to know whether or not if there's not a recorded person and associate registered for peace of land it's not we don't it's not possible to know whether or not that's because that information should be there but is not yet being registered or whether there isn't actually any recorded any any eligible recorded person or associate so it won't be possible to have a complete picture of the extent to which what's in the register is incomplete or complete and that for the missing plots of land there just isn't enough information that information is not available but how would you see that that been solved well again it goes back to this question of how this register relates to the land register and whether the scotless whether the scotless portal would be able to give you a clearer indication of some kind of flag up on on a on a on a title of land where that information is missing or whether there isn't or whether there isn't a recorded person or associate eligible because at the moment that doesn't there doesn't seem to be a procedure in in the regulations we've got a number of members wanting to come in in the back of that for very short supplementaries before we go to Alec Riley for his length questioning Stuart Stevenson followed by Finlay Carson I just want to slightly explore the cases where we do not wish to disclose the honour women's refugees would be an example it's not the only example that people can appear on the electoral register for safety reasons without an address for example very few but in particular if the limit of people who are secret is very small and very specific reasons doesn't that carry with it the risk of identifying what is being concealed so Humphrey Appleby said he would he who would a secret keep must first keep secret that he would has a secret to keep in other words the very fact that something is shown is not disclosed might disclose so how do we deal with that really quite difficult issue of those instances where we must not disclose can one person answer that and then I'll come to Finlay Carson for his supplementary because we are kind of running out of time somebody want to answer that with a yes minister quote or not just very I'm afraid I'm not going to be able to give you the quotes I think that all we can do at this point is learn from how this has worked in practice for the psc register where in in actual case the number of of agreed exemptions to for these purposes it's kind of terminology is different from the security declaration but the purpose is the same it's actually extremely small in terms of those which are actually go through the the request and an agreement process so yes I think it it is a possibly a problem if you are able to tell that a particular plot there has been an agreement that information is redacted but it doesn't tell you why and most importantly it doesn't doesn't disclose the information which the person has asked it to be withheld and I think that that's that's the security so that security barrier is still there in terms of the protection of the information Finlay Carson have you got us still got a question yes regulation six and seven relate to the protection of and access to rci however it doesn't actually reference or recognise independent standard when it comes to security how would you deal with that and and cover any concerns that might be regards to the security of the information and access to it sorry convenient if you don't mind I mean global witness doesn't have too many concerns about the security we think that what's in place at the moment is adequate we do have concerns though that it might be misused and therefore our recommendation and submission was that the in again to match the psc registers operations that the keeper would be required to annually report statistics on the the number of exemption requests they've received and how many had been had been had been how many had been accepted and that's more just to make sure that this this this mechanism is is functioning is fit for purpose essentially we don't have but I know I think maybe I don't know whether other panellists have comments of suggestions about strengthening security procedures I'm going to move on to Alec Rowley has some questions to ask a different theme thank you I know that the the law society in its evidence states that there needs to be upfront clarity in terms of the types the owner and tenant that are exempt from the regulation uh so my question would be around who should be caught by the regulations and who should be exempt is it correct that the regulations apply to all those with a controlling interest so the law society to give examples where there is doesn't seem to be any difference between the local sports club and the large commercial organisation or between the small family partnership and the major pension fund and then the the Scottish property federation they they then go on to say and I quote the investors or beneficiaries of a collective investment fund maybe somewhat removed from controlling the fund and this begs the question of what the register of control and interest will actually achieve so does does the other panel members agree with those those concerns being raised and at the end of the day who should be caught by regulation and should there be exemption and differential between large sports clubs or sports clubs and pension funds without rehashing my previous answer I'm going to go back to my previous answer to Claudia Beamish's question which is the exemption should be at the bare minimum frankly in terms of who who is exempted from it and taking on board the security issues that we've already discussed this needs to be as as wide-ranging as possible in terms of the data that it collects in relation to the register and and who's on it basically for the issues around transparency democracy and accountability that we've rehearsed earlier on I think is that fundamental frankly answer I think that kind of leads to the issue which I think Calum actually touched on briefly earlier which is about how do people know whether they're supposed to be doing something and putting some information on this register or not at the moment and strictly speaking everybody who owns land would have to weigh their way through these regulations to find out whether or not they're supposed to be doing something and and that's quite an important thing for people to to know whether or not they have to given the the severe penalties that that could apply if they do have a duty under these regulations and fail to comply with that duty and in a way in in terms of you know the the the sort of examples that you gave from the law society and and other submissions is it should be easy and and and the prime thing should be that it should be very obvious to people whether or not they they need to be worried about putting something into this register that should be clear that should be you know posted up front so you don't have to worry if it's a husband and wife and the husband the titles in the in the husband's name or the wife's name these sorts of situations you may be in a partnership but all the partners own the land that's fine you don't need to worry about that so it's it's actually it's not so much making sure that's fine i'm exempt it's actually knowing that i don't have to do anything or the circumstances in which i do have to put something on this register so that i'm not you know guilty of committing a criminal offence which is which is quite a severe penalty you know just for owning land i mean anyone else like to add any comments Stuart Simonson's question i'm i just wondered if and stewart's answer covered both registered and unregistered partnerships because of course unregistered partnerships are by the very nature the details are not known it's not so much about the details are not known you know one would hope that the partnership would know that who its partners were it's a it's a different approach that i'm talking about and the fact that there will be a lot of people who quite innocently and inadvertently fail to comply with duties under these regulations to put information on the register for no reason other than that they are oblivious okay i'm afraid i'm not gonna answer the members question specifically i think global witness perspective in terms of whether or not the regulations capture those who should be caught by our our concerns are actually different in terms of the fact that we're worried that the complexity of the regulation creates potential loopholes which might be exploited by those who want to be able to continue to remain anonymous for the reasons that up until now they have not made this information public there are there are unfortunate small in global witnesses experiences and unfortunate small proportion of of of of of lawyers who make a living out of helping entities who want to remain anonymous or you know avoid certain regulations find loopholes in order to do that and what we welcome with this regulation is that the the way in which it's drafted is is very inclusive and the the entities which are excluded are very small and very limited and we hope that that will be that will have the that approach will enable the the keeper and the Scottish Government to make sure that even in the future if there are new types of corporate vehicles which are created that they will still be able to be captured by those regulations to ensure that we don't end up with simply ownership by those who want to remain anonymous moving into types of of corporate entities which are not covered by this regulation so the breadth and scope is very important we think in terms of having that flexibility to adapt to to the to the type of structures that may be created in the future and kelma clade wants to come back in you still want to just very briefly to observe that there's clearly a difference between arguing for for entities to be excluded from the register and giving people the information that they need to have confidence as to whether or not they should be doing something in terms of registration in the first place and we would suggest that the emphasis very much should be on the latter in terms of giving that kind of information and giving them the confidence to be able to to make that decision as to whether or not they should be registering or not in the interests of this kind of broader disclosure that we already discussed. Okay, Jason Bust. Thank you. Going back to the members, Mr Early's initial question, we would agree that they should be across the board and we did note in our submission a few contractual arrangements which we thought had been admitted such as 1991 act as secure agricultural tendencies but just in them being across the board I think the only sort of caveat I think it needs to be borne in mind that in terms of the sanctions that obviously you could we're looking at large pension fund trusts as well as you know your small family partnerships and local clubs and I think when it comes to the criminal sanction I think that needs to be borne in mind. Alex Rowley, do you want to come back in for your follow-up questions or are you sorry? Two points I wanted to make. One, the nature of the test is so wide it is going to have a far reach area. It will apply very differently to a local sports club as opposed to an investment trust and that's where the guidance would be helpful particularly when you're dealing with people who may not think that there is legislation out there that is going to be relevant for them so publicity and guidance will be very very good. In terms of people being excluded from the regulations then one of the particular instances that came up in our discussions was the role of executors and the idea that one of the early things you should do once a spouse, family member or anyone dies is to remember to update the register of controlling interests is it is an area where people are likely to be unintentionally criminalised for no real benefit and so where you have an executory that is simply being run through its administration it would make some sense to have a carve out for them. Richard Lyle you have a question? Most of what I was going to ask already has been covered but I'm reminded there is a section in the act to allow for a security declaration. Nowadays security is paramount. So how should we keep our prioritised security in the registration process and to include other witnesses? Would you like your address being published for all to see or should anyone be able to just contact your lawyer Mr Siggler will like this one for a fee? Who would like to go first? It has been covered to a certain extent if anyone's got any further points to want to see. Honestly would you like your address being published? Your individual home address being published for all to see? Personally speaking this isn't an organisational perspective at all it wouldn't bother me to have that at all you can go in the electoral potentially and see where my address is anyway so personally speaking I wouldn't have a problem. In the electoral roll you can actually ask for it and Stuart Stevenson covered that earlier. MPs can ask for their addresses to be with health from the ballot paper. I'm pushing for it to be done for councillors. Stuart Stevenson already reminded us that you can actually have your address taken off the electoral roll but your address can be off it. The concern is that people could come up and chat with your lawyer. Let's be honest, would you like it or not? I'd like each of you to say yes, either yes or no or pass. From the global witnesses perspective I think that the solution to this is better, the solution to be able to identify who those with controlling interests are and map the extent of their controlling interests across different pieces of land is better resolved around the question of having a unique reference number rather than having further information which you're able to cross reference in terms of making sure you have the right person. As far as I know, while the PSE register requires the residential address to be provided to the register, it's not disclosed. The information that's disclosed on the PSE register is a service address, not a residential address. That again takes you back to this question of whether or not the function of the register can have a two-tier system where it holds some information which is not disclosed or whether or not everything which is registered is automatically disclosed. Right, just to cut to the chase, I know the convener wants me to hurry along. Would that be the answer, Mr Sinclair? If someone wants to find out if I own a tree next door or whatever or I own a house next door to them, they could go to a register and see my lawyer as you and they could contact you and you could say, okay, we'll get that dealt with. Is that not the answer or am I barking up the wrong tree? I think it is the answer that if the purpose of the address is for both identification and contact, then the address needs to work. So it safeguards the person, they have an address to contact, a firm, not an individual's house, they have a firm. It's not a tax haven, it's not a whatever you see in the television, but they do have somewhere to contact. If I go on to the valuation board, I can go on to the register and get where a business is located. So if someone wants to contact me, I'm quite happy if they want to contact my lawyer, all done and dusted. Yes? For time. Sorry, I just want to say on that, otherwise I'm going to go to Stuart Stearns. I think I've got the answer. So quickly, John. Mine's a relatively straightforward question, although I'd asked a laddie question, but given that we're moving towards further disclosure of everything, it appears, yet in here we're now very concerned about data protection and GDPR compliance. Is this all compatible, these two pieces of legislation, the existing one with this new proposed one? Someone got a view on that? Global witnesses' understanding is that there are exemptions in GDPR which would enable member states to continue to disclose this type of information if it already existed in statute prior to the introduction of GDPR. So in terms of the sequencing, our understanding is that what is being proposed is compatible with GDPR because it was already introduced in statute. Jason Rust. Thank you. Yes, I think provided it's obviously compatible with existing data protection laws, then it would be quite comfortable. More general point, I think just in terms of disclosure that actually there is almost a caveat and it's somewhat perversely that the more information sometimes you seek then the less transparent the processor system can become because it can be easier to conceal that really pertinent information or make information harder to find. So, although obviously we want as much transparency as possible, I think there's also, we need to bear in mind the potential dangers of, I don't mean too much transparency, but too many requirements and disclosing lots of information, some of which is maybe just very ancillary and not actually relevant or what people would be interested in so that to the extent that key things are harder to find for the accessing public. Like an address, you mean? I'm not so much an address but I mean more generally in terms of what's being sought, just sometimes the more information that is being sought. What would your class be in ancillary? Well, it's something that's not directly, I mean in terms of regulations it's obviously identifying the, we want to identify the arrangement, the contact details, so it's having those very clear, very straightforward for someone accessing that that information is there and you wouldn't obviously want to register which is full of lots of other maybe legalese or technical information which doesn't actually help the public. All right, so it comes back to the kind of accessibility question. Stuart Stevenson. I just want to briefly ask some questions on accuracy. I'll just make the observation, I've just literally now, company's house, my Sunday name's James, there are 162,752 directors entries for James Stevenson. There are 71 James Stevenson's on the electoral role in Edinburgh, the public part of the role and in the 1935 valuation register, which I could look at there, there are 699 James Stevenson's, so therefore clearly getting accurate and complete information if you want to find a particular James Stevenson is important, as these numbers might illustrate. How will we know that what is there is accurate? The way things are structured, the duty is entirely on the person submitting the registration to be accurate. How might we spot that it's not in the present set-up? Or is it impossible on what's? Yes, this is also something that we had thought quite a bit about in terms of the limited powers that the keeper is currently proposed to be given in terms of verifying and investigating the extent to which the information in the register is correct. Fundamentally, if the, to go back to a phrase, if we have rubbish going into the register, all we will be able to access from the register is also not useful information. Government has done quite a substantial amount of analysis of the extent to which this problem has occurred within the PSC register. We think there are some very important lessons that can be learned in terms of how this register would function in terms of data validation and verification. Just to give some examples, the original PSC register was a data-free input, which meant that you could put in anything you wanted to any of the answers. As a result, you had 500 different spellings of nationality for British. You had people listing their nationality as Cornish. You had, I think, over 2,000 people entering their date of birth as a beneficial owner as 2016 and others far into the future, kind of the year 999,000. So, there are some clearly some problems around if you have a system which is based on free text input. The solution to this is, there are two levels of the solutions from our perspective. The first is what we're calling data validation, which is the way in which making it simpler for the information to be correct at the point of receipt. This can be done through, for example, having, instead of free text, multiple drop-down box menus and ways in which entering the data has age prompts and stops you providing being able to put in an age as something in the negative, for example. There's also ways in which you can integrate data validation systems, for example, having a check on a UK postal address in order to verify that the address being put in to the register actually exists. Another way of addressing this would be at the point of the data entry that the recorded persons associates provide proof of ID, or if they're a natural persons, or if they're a non-natural entity, some kind of documents providing evidence of ownership and control of the particular piece of land. In terms of the verification question, which we see as the separate stage of, if data validation is the point of entry, the point of receipt of the information into the register, data verification in our view is the questions around how the keeper is able to ensure that that data is accurate and continues to be accurate moving forward. One of the ways that this could be done would be to be aligning this register with EU regulations around money laundering, which provide helpful guidance in terms of member states needing to ensure that this information is accurate, current and adequate, and also of requiring entities that already conduct custom media diligence such as accountants, real estate agents, banks to inform the national authorities or the authority in this case, the keeper, if they find that beneficial ownership information they've been given is different to what's in that register. So there's new guidance and regulations coming out of the EU which could provide examples, even though that's for the money laundering purposes and applies to the PSE register. They provide some useful ways of tools through which in this case the keeper could help to make sure that the information on entry is correct and also that it continues to be correct as the register is on-going. It's quite a long answer but I think at the core of it one of the questions I have really is does that not therefore create a legal responsibility for the keeper which is presently absent whereas at the moment it's very clear that the legal responsibility is for the person submitting the information. And isn't there a danger in creating, in moving the responsibility to the keeper, in particular in keeping it up to date, which is formidable and difficult? And I just made the observation of having worked for 30 years to our bank, it took us 10 years to work out how many customers we had. We knew how many accounts we had but it took us 10 years to work out how many customers precisely for the sort of reasons described. It may well do need to change the way in which the responsibilities of the keeper are described in this regulation but I think it comes back to the fundamental question of what is this register for and how can we ensure it's fit for purpose and without making some changes global witness worries that the register may end up with information which is really unhelpful. Just tiny point, given that company's house does not verify the information that's given and much of the ownership information will relate to a company, particularly in the areas where there is lack of clarity, having this required clarity would not necessarily actually create the clarity that we desire if it's a company that owns where there is no verification at all. I saw John Sinkler dying to come in there. The point that I was simply going to make was that the Law Society had suggested at the end of their response the idea of giving the keeper the ability to ask for information. At present, the keeper is a relatively passive party to this. I think that we would be concerned if the keeper was made an active part of this in that the resourcing required to actively investigate, particularly when you get into foreign entities, is hard to see the keeper ever having the resources to do that and it's there for whether there is an intermediate step where rather than simply dealing with the information that is presented to the keeper, there is at least the possibility that the keeper is choosing to make a request for information actively. I will move on to Mark Ruskell, who has got a series of questions. We've already touched briefly this morning on the issue of sanctions that should apply for non-compliance. Obviously, we've got two groupings there. We've got people who are entities that are deliberately not registering to allow their anonymity. There's also a situation where there are those who may inadvertently not register and not comply. Can we start with the group that is seeking anonymity? The evidence that we had from Global Witness Committee in Scotland suggested that the £5,000 fine would be insufficient to deter that grouping. Do you have evidence of why that level of fine in your view would be insufficient? I think that people in Scotland, in echoing many of Global Witness' points in relation to the various aspects that we've discussed today, firmly offer the view that there need to be appropriate sanctions in relation to encouraging and ensuring that those entities that should be making submissions and registering on the register actually do so. £5,000, as an upper ceiling in relation to acting as a fiscal enforcement measure, may not be, frankly, terribly significant for some entities that may be seeking not to register in practice and so on that basis. I read with interest what was said when you had your session with civil servants a few weeks ago in relation to what's available on the scale at the moment with regard to sanctions and the fact that that would require a amendment of the land reform act 2016 if that were to be increased. I think that our view is that, in the bigger picture and the grander scheme of things, £5,000 is not necessarily a particularly significant disincentive or incentive to register—sorry, let me rewind. £5,000 is not necessarily an incentive to register for some parties who may have an interest in not doing so for whatever reason, so really it's about opening up the scope in relation to that. But just to follow on from that as well in relation to whether there should be sanctions available and whether there should be criminal sanctions, of the view certainly—I know it's not a view that's shared by everybody—of the view that that should be the case because it's an important element in relation to ensuring that this register does what it is intended to do, frankly, which is increase transparency and enhance that process with regard to these issues. That being the case, we would encourage that to be retained in the regulations. Megan McKinnis wants to come in. Yes, thank you. For us, this is a really important part of the regulation. Our view that the £5,000 maximum wasn't based on evidence on the ground. It was more looking at how that compared to comparable fines in other pieces of regulation. The Land Register, the 2012 act for the creation of the Land Register, that has a statutory maximum—the fines up to a statutory maximum, which is £10,000. Likewise, the PSC register has a higher £10,000 threshold, fine. We just thought that in comparison to the fines introduced for, again, this non-compliance in terms of providing false or misleading information that what was being proposed in this regulation wasn't in line with comparable pieces of other relevant acts. The question, though, is whether or not the solution to this is if changing the fine, the maximum fine requires changing the act, the Land Reform Act itself, is that a route that can be gone down, or could there be other ways in terms of creating other types of sanctions which could be applied to as a deterrent against those who are not going to be voluntarily willing to provide the right information to this register? Sorry? What might those sanctions be? What we had suggested in our submission was that the completion of this RCI registration process be a precondition for undertaking other administrative and financial changes, or transactions relating to the land, for example, when entering a title into the land register, mortgaging or remortgaging properties, or any other changes which are required to the title deeds. This is something which the explanatory notes to the draft regulations, they mention it, but they say that it wasn't something that they proposed in the regulation without giving any explanation why, so we're not clear what the reasons that such preconditions weren't introduced in this, but it's interesting that the precondition of registering in the Scottish land register is actually a proposal for the UK foreign entity, the draft registration of overseas entities bill, which is the new UK's proposal for this new register of foreign entities, will require proof of registering in this UK wide register as a precondition for foreign entities to be able to make those kind of changes to their title in Scotland, so that what the UK government is proposing is those preconditions. We can't see any reason why that couldn't be introduced into these regulations, or in addition to possibly, but if there is concern that opening up the 2016 act in terms of changing the upper threshold of the fines is not possible at this stage. Can I just look at this from the other perspective, though? I think that Mr Sinclair has already raised the issue of proportionality, and it's very different between a pension fund and a small partnership or somebody trying to deal with an executory on a will or whatever. How should these regulations be applied proportionately to those who are innocently and inadvertently failing to comply? One suggestion might be that there's almost like a two-stage process, so that rather than by failure merely the offence is committed, that people who are quite innocently failing when they should be should have the opportunity when it's brought to their attention to rectify the position and to submit whatever information or changes that they'd failed to do before the penalty kicks in. They no longer have the exclusive ignorance, and they're given a reasonable period of time within which to rectify that, so that they're not automatically criminalised through inadvertent failure, but can then choose to become criminalised if they fail to attend to an actual explicit notification that they have something they should do. I apologise, but we're going to have to move on to a final question from Alex Rowley. Can I ask in terms of foreign entities who are beneficiaries of property across the UK? Should they be included, excluded, and why? I mean, I think from global witnesses' perspective, yes, we're in a tricky situation right now with the two pieces of regulation currently being consulted on, this register here, and the new register at the UK level. From our perspective, it's too early to say whether or not the Scottish regulations should exclude those entities, because our understanding is that the UK regulations haven't yet defined exactly what type of foreign entities will be included in the UK register. It's a register that is managed by companies house, so we're expecting it to be mainly corporate entities. It won't, for example, include trusts, so Scotland's register should still include foreign trusts, but it's too early to be able to take them all out. We need to wait and see what the UK is going to be doing and exactly what type of foreign entities will be covered by their regulation and new register before knowing what to exclude and put into schedule for this register. John Scott's got a follow-up question to that. I'm just not certain if this question has been answered, but should professional advisers be explicitly excluded from schedule 1 or not? Yes, no, quick round the panel. There are only acting in their capacity as professional advisers or paid professional advisers, and I think that the difficulty is going to be whether you are both, if you could be a solicitor acting for a company but also on the board. Anyone else get any thoughts on that before I let you want to follow up? No one's got any other questions to ask. I'd like to thank everyone for coming along today and giving evidence. Thank you very much for your very comprehensive evidence. I'm going to suspend this meeting for a couple of minutes before we allow the new witnesses to come in. Thank you. The third item in our agenda this morning is to take evidence in a proposal by the Scottish Government to consent to the UK Government legislating using the powers under the European Union Withdrawal Act 2018 in relation to the following UK statutory instrument proposals, ionising radiation, basic safety standards, miscellaneous provisions, amendment EU exit regulations 2018 and the justification decision powers of EU exit regulations 2018. We've been joined by Charles Stuart Roper from the Scottish Government and James Hamilton, solicitor for the Environmental Branch of Rural Affairs Division. Welcome. I'm going to go straight to questions for you on these issues from John Scott. Thank you, convener. Good morning, gentlemen, and so in the approach, the approach in the event of a no deal scenario, in the event that there is a deal, in a contrary way, including a transitional period, will there require to be changes to the provision in these regulations and what will those changes be and how will they be achieved? No, the changes won't come into force until exit day, whenever that is. If there is a transition period, all we'll have done is got these ready early and then the changes will still need to be made, but they won't come into force until the exit actually takes place. Excellent. Could the Scottish Government give more detail about which reserved and devolved responsibilities and our powers are relevant to the regulations? There are two sets. For the first set, the ionising radiation, basic safety standards, miscellaneous provisions amendment, which are very snappy, the title set of regulations. It's basically environmental protection under the basic safety standards directive, so it's protection of the public and the environment from radiation in the environment. The powers that are pertaining to us under those regulations are mainly about the levels of acceptable contamination and the setting standards for cleanup and contamination. These are powers that are both reserved and devolved. Obviously, they're reserved for Scotland in terms of the amount of radioactive substance legislation that's reserved in Scotland and our own contaminated land regulations. The instrument doesn't make any change to the balance of powers or indeed to the exercise of the powers. All it does is update the references so the regulations stay effective in the event of exit. The justification regulations are generally only exercised at a reserved level, but they, in principle, could be exercised at a devolved level as well if somebody wanted to do something with radiation only in Scotland in that unlikely eventuality. The changes again don't make any change to the balance of reserved or devolved powers. They merely update the way in which they can be exercised to make sure that they're still exercisable after exit. Finally, I want to ask you, are you, the Scottish Government, satisfied that the regulations will receive the appropriate level of scrutiny at Westminster? We're first with one of those notifications to the committee. My colleagues down south have been working hard to be ahead of the wave of measures being introduced at Westminster, so, yes, I think that these ones will. They've had quite a lot of revision and checking already at official level across Whitehall, and we've obviously checked them for our interests. Given that they are merely designed to maintain the current status quo of how the regulations work, I think that there will be sufficient interest to ensure that that's the case. I wonder if you could just confirm my understanding that there has been a special procedure introduced in the new committee at Westminster for these EU regulations, which means that there will be at least that level of scrutiny of the detail of the legislation and other similar European Union withdrawal regulations. That's fine, thank you. Morning to you both. I'd like to turn the focus on to SEPA's functions, and if either of you could please answer for the committee whether the functions of SEPA will be impacted by the introduction of the new regulations. Has this been discussed with SEPA? My understanding is that SEPA's functions won't be impacted by this. The SEPA's regulation of radioactive substances is now under the environmental authorisation regulations 2018, which, as they effect that, before they can authorise a practice involving ionising radiation, it has to be justified. That will continue. The justification regime will continue to sit alongside that with all the existing justified practices, so there will be no effect from that one. The other instrument deals with the parts of the basic safety standards directive, which I don't think impact on SEPA. Again, all we're doing is seeking to maintain the status quo. There will be no impact on SEPA's regulatory attractivities or no change. A follow-up to that. Are there any implications for transportation of any of these materials? Transportation of radioactive substances is reserved. I'm not aware of them having to do any changes to the transportation regulations, so that will be something that's being assessed by UK Government colleagues to see if they need to make any changes to those, but transportation is a reserved matter. Has the Scottish Government are you aware that they've received any representation in relation to the regulations and the intention to consent to the UK ministers making regulations on behalf of the Scottish Government? No, I don't think they have. Because the intention is so clearly just to maintain the regulatory systems as they currently are, there has been limited consultation on these, but that reflects the fact that there is nothing really to consult on. We're merely acting with our UK colleagues to ensure that the current regulations, which work effectively but quite quietly in the background, can continue to work effectively in the future. Right, and just lastly from my lines of questioning, are there any enforcement functions under the current regulations that require to be transferred to any Scottish or UK bodies as a result of this process? I think that I know the answer, but I'd like it for the record in view of your previous answers. No, there are no functions that require to be transferred. There's no impact on the existing functions of Scottish regulators. Right, that's helpful. Thank you. On from that, can you explain how the enforcement functions that exist at the moment in the URATM treaty under article 106a, how those will be replicated with these regulations on exit? Can you ask me that again? The enforcement functions, how they'll be replicated on exit for the use, the enforcement functions that are currently within the URATM treaty, how those will be replicated? On to that and rating, I'm afraid. If these are the enforcement functions of the In relation to environmental protection, the treaty function, then directly applicable law, which is in regulations, will either become UK law or Scottish law is relevant and will be fixed for any deficiencies. Where we're talking about enforcement under the treaty that we comply with the treaty, obviously once the UK leaves the treaty, we no longer have that degree of enforcement. There's a much wider discussion, as I'm sure you're aware, about how in the future we will provide for that sort of environmental law underpinning within the UK and within Scotland. And my colleagues are thinking about that and as a much wider issue in terms of the future assurance that environmental laws in general are up to scratch, the assurance that is currently, in a sense, given by our membership of the EU and URATM, how that is provided for in future and those ongoing discussions about how that should be done in future. Right, so there isn't clarity at the moment about who carries forward all the aspects of the enforcement function then, is that right? Sipa, have a role. Sorry, so maybe I've confused. In terms of enforcement of the individual sets of regulations, that's entirely clear. It's SIPA for the Radioactive Substances Regulations in Scotland. It's the Office for Nuclear Regulation for Transport. There's no doubt about the enforcement of our domestic regulations. The only point at which there becomes any, there's still a discussion, is that at the moment, of course, our regulations have to comply with the URATM treaty and in the same way that other environmental regulations have to comply with the relevant directives under the EU treaties. And there is still a discussion about that wider issue of how about the assurance of environmental law in the future. But there is no doubt about the in-continuity enforceability of all our domestic systems of regulation. So it's a wider question about who watches the watchers then, effectively, and that's the bit which hasn't been decided on. That's the bit that's still under discussion. Thank you, Richard Lyle. Thank you, convener. Good morning, gentlemen. The A&I's and radiation basic safety standards miscellaneous provisions regulations 2018, as described, is containing definitional references. Proposed regulations will be corrected by replacing definitions by reference to the directive with the text of the definitions. Which definitions in these regulations require to be changed? And what will the definitions be once amended? The definition that requires to be changed is the definition of orphan source, which currently refers to the definition of orphan source in the basic safety standard directive, which itself relies on some other terms that are defined in the basic safety standards directive, which include licensing and authorisations. Those terms themselves rely on the definition of competent authority, so licence on authorisation has to be granted by a competent authority and a competent authority has to be in an EU member state. That has the effect of undermining the definition of orphan source. The new definition of orphan source is being added, some other definitions are being added to support the definition of orphan source itself. The other impact is that, instead of a reference to article 102, we're introducing those principles in the annex to the regulations. In order to support that annex, sorry, that schedule, we've had to introduce, or Bays have had to introduce, two new definitions, which are definition of protective measures and a definition of remedial measures, which are equivalent to the definitions that currently exist in the basic safety standards directive. Can you also explain, thanks for that, why the remainder of the definitions in the regulations will continue to be operable post Brexit, and where the 2018 regulations refer to lists of acceptable materials can, in other words, is the intention to remove all references to directive and its supporting annexes. For example, if the directive is amended or superseded, the new regulations will be completely delinked. The intention is not to remove all the references to the directive, so Bays will have carried out an exercise to identify references to the directive that will create deficiencies, so that would include things that reference to things happening in member states. For example, where there are other references to the directive that don't create those sorts of deficiencies, the view can be taken that those references can still work effectively. With regard to the question about going forward, the effect of references to directives in domestic legislation could either take effect at the date that those regulations come into force or, in the case of ambulatory references, the effect of the withdrawal act is to freeze the ambulatory reference at the exit date, so changes to regulations after the exit date obviously won't be referring to directives, but there's mechanisms in place to address those concerns. Depending on when that exit date is, is it the intention to transfer these annexes fully into UK law or Scottish law? I'm not sure that there's a straightforward answer to that question. There's various places in domestic law where we already refer to the annexes for those requirements. To that extent, they already form a part of domestic law. The change that will happen at exit date is that these sorts of changes to address these deficiencies will take effect to make sure that, for example, the example of orphan source that it gave to ensure that that doesn't become a deficiency and that reference will continue to work effectively after exit date. So there will still be some references afterwards. We are looking to fix the issues to make sure that they still work effectively with effect from exit date. My question refers to the justification of practices involving ionising radiation regulations 2004, which draws upon the European Communities Act 1972, which gives the UK and Scottish ministers the powers to make specific regulations. What's the process under the 2004 regulations for approval of practices involving ionising radiation? What's the current Scottish minister's role on that and how will that process change following the amendments? The situation is that, in addition to the regulations, there's a memorandum of understanding between the administrations, which defines the way consultation works under the regulations. There's a very full and close consultation on any proposal that comes forward to ensure that where something is being agreed at a UK level, the devolved administrations are fully involved in that decision. The whole system carries forward as it currently functions, and it currently functions very satisfactorily. In fact, these decisions are quite rare. The recent examples have been about reactor technologies for a generation plant. These decisions don't come up very often, but there is this full administrative process in place in support of the regulations to ensure that, before any regulation is made by UK ministers, there's a very thorough consultation involvement of ourselves and the other devolved administrations. Can you give us an idea of the scope of the new powers, which will replace the 1972 act? Will it have any limitations? The new power is essentially equivalent to the existing power. It's limited in its scope by the Justification Regulations 2004, to document a decision of the Justifying Authority that a practice is to be justified. The most recent draft of the Stacked Transiment that we've seen includes some limitations on that. It's essentially to make it clear that that power can only be used for the purposes of making a justification decision, so the scope is exactly the same. Okay, so you maybe answer the next question, which is what parliamentary procedures will be exercised in the UK and the Scottish Government? I would have to double-check that. The Scottish Parliament, I should say. I'm almost sure it's the negative procedure, but I would have to double-check that. I don't want to mislead you. I've got a question about the post-Brexit situation. Has the Scottish Government considered that there's the possibility of standards diverging from those under the directive, like, for example, if new evidence becomes available? How might the UK and Scottish Government benefit or participate in unatom research past that point? Okay, to take the first question first about what if, I think you're asking, essentially if standards evolve at the EU level, well, the unatom level, will we follow? Generally, international standards of radiological protection are set at the higher level of the IAEA, the UN body, and are then reflected in EU directives. So the intention of both of ourselves and the UK Government is to keep an eye on developments at that IAEA level and move with changes to the international standards, at least as far as the EU does. So they shouldn't, over time, open up a divergence of standards between ourselves and the unatom structures because we're both, you know, the intention is that in this post that makes it world, we'll both be following the lead of the IAEA. On the question of future participation in research, the UK Government's white paper did say that they want to seek a very close working relationship in the future with the unatom, including on research, but that's obviously, you know, a matter of negotiation, which, you know, like all the negotiations is waiting for its place in the importance of negotiations, but there is a very clear intention, the UK Government, to try and negotiate a continued involvement in the research activities of your atom. Okay, Matt Ruskell. Follow up to that. Does the IAEA have any kind of governance function for states at all? I mean, is there a, is there a sort of, because we discussed earlier on about enforcement and the kind of wider governance? These are reporting obligation, so we report our national programme for radioactive waste and as a UK level, our participation in that, we're consulted in Scottish policies and practice feeding to that, and they do regulatory reviews periodically, and is one indeed due quite, I mean, the next year where they send, well, they experts from other IAEA countries are recruited to come as a team to come and test our regulatory systems for effectiveness. So, there is that review from the IAEA, which is an external review. It doesn't quite have the teeth of an EU, your atom, because you don't have the infraction risk. So, but I can't think to any, it's hard to conceive a situation where we and indeed the UK Government wouldn't respond to a recommendation of an IAEA review. So, it feels some of those roles of external, many of the roles of external check on our practices and the quality of our regulatory systems. You know, has the Scottish Government had discussions with the UK Government as to whether they intend to ensure that the principles of the basic safety standards directive are brought into UK law? Well, I mean, the fact is that the, I mean, the existing regulations reflect BSSD standards, and indeed the recent transposition exercise ensured that UK regulations were all up to date with the more recent BSSD. And once it's into UK law, there's no intention of the UK Government to immediately change that law. So, yes, their stated intention is to maintain those standards as they already are. So, I think we, and certainly we have no indication that they wish to diverge from that. So, that means that? It's basically the same standard. The BSSD standards will roll forward in UK law. And they're already in UK law, and they won't be, there's no reason, they won't be taken. What we're doing, what the UK Government doing is fixing our law to make sure that they're still effective once we're exit. So, to fix references and to make sure that our regulations work as freestanding regulations, but still with the same standards as they are in the BSSD carrying forward. Okay, thank you. Angus MacDonald. Sticking with the BSSD, has the Government identified a package of measures required to address deficiencies in legal instruments transposing the BSSD? And can we expect to see more notifications in this package? And if so, any information that you can provide on that would be helpful, for example, about the scope and time scales? I don't anticipate any more notifications of UK deficiencies, including devolved competencies in this area of radiative substances regulation. I think this is it, this is what's been identified. We may need to make a few changes to deficiencies in our radiative contaminated land regulations of our own, which we will be doing. The plan is on that longer time scale through what we still anticipate as a transition period, but they will likely come forward in a wider wrap up instrument, fixing minor deficiencies across a range of regulations rather than as a freestanding instrument. Okay, thank you. Thank you. If no other members will get any questions, I want to thank you for coming along and answering all our questions today. Next meeting on 2 October, the committee will hear from evidence from the keeper of the register of Scotland on the regulations to establish a register of persons holding a controlled interest in land. We're also considering our work programme and a report on the 2019-2020 budget. As agreed earlier, the committee will now move into private session and I request that the public gallery be cleared as the meeting is now closed. Thank you.