International Organisations (Immunities and Privileges) (Scotland) Amendment Order 2022 [Draft]
Our next item of business is consideration of an affirmative Scottish statutory instrument. I refer members to paper 3.
I welcome back Keith Brown, Cabinet Secretary for Justice and Veterans. I also welcome his officials: Walter Drummond-Murray, head of civil courts, inquiries, private and international law and central authority at the Scottish Government; and Emma Thomson from the Scottish Government legal directorate.
I invite the cabinet secretary to make a short statement on the SSI.
I have chopped some of the commentary that I was going to make because you have had a long morning and the SSI is not dissimilar to ones that the committee or its predecessors have considered in the past.
The draft International Organisations (Immunities and Privileges) (Scotland) Amendment Order 2022 confers various legal immunities and privileges on the Inter-American Investment Corporation—IIC—and on persons associated with that organisation so far as that is within the devolved competence of the Parliament.
The order is limited to the issue of privileges and immunities. By way of background, I mention that the IIC is the main private sector arm of the Inter-American Development Bank Group—IDB—which lends to Governments and the IIC. The UK has opted to join the IIC, and the conferral of immunities and privileges to the IIC is required to ensure that the UK can fully comply with its obligations under article 7 of the IIC’s founding agreement. Joining the IIC offers the opportunity to be part of an important organisation in the Latin America and Caribbean region, which will support economic growth and leverage further private sector resources for development financing.
To assist the committee, I will say a little about the nature of the privileges and immunities involved. The conferral of legal capacity and privileges and immunities is necessary to ensure that the IIC can function as an international organisation in the UK. The order grants the IIC immunity from suit and legal process, inviolability of archives and premises and exemption from taxation. It also grants personal privileges to the IIC’s officers and employees: immunity from legal process with respect to official acts and exemption from income tax. The income tax exemption does not apply to British citizens.
The privileges and immunities conferred by the draft order are granted primarily on the basis of strict functional need. They are no greater in extent than those that are required to enable the IIC to function effectively.
So that the privileges and immunities are conferred in accordance with the agreement, the UK Government has introduced a statutory instrument through affirmative procedure, with the expectation that it will come into force late this year or early next year. The UK Government also laid its SI in Parliament on 11 October.
I welcome the opportunity to hear members’ views on the order and I commend it to the committee.
I apologise because I was not on the committee when this sort of matter arose in the past, so I am new to the subject. I have a simple question: is the cabinet secretary aware of whether the organisation concerned has any employees or offices, or undertakes any activities, in Scotland? The reason why I ask relates to the point about income tax. If an employee of the organisation was ordinarily resident in Scotland, would they pay the taxation that was appropriate south of the border or the local, devolved income tax, which might differ?
My understanding is that the tax liabilities are termed a reserved UK income tax. I am not sure whether that applies personally to the employees. There is no current plan to have employees based in this country; they will be visiting employees. As I understand it, the IIC has no offices in Scotland or the UK.
To check that I have those facts right, I ask my officials whether they want to comment.
I will take the second point. In this case, the order is largely theoretical, because it is not expected that the IIC will have activities in Scotland.
Perhaps Emma Thomson can confirm the taxation point.
IIC employees are exempt from devolved taxation in Scotland but, as Walter Drummond-Murray said, it is a theoretical point at the moment, because there is unlikely to be a base in Scotland. The employees will be visiting.
Thank you. I just wanted to check.
As there are no other questions from members, we move straight to consideration of the motion. I invite the cabinet secretary to move motion S6M-06291.
Motion moved,
That the Criminal Justice Committee recommends that the International Organisations (Immunities and Privileges) (Scotland) Amendment Order 2022 [draft] be approved.—[Keith Brown.]
Motion agreed to.
I thank the cabinet secretary and his officials for attending. That concludes our consideration of the SSI. We will suspend the meeting briefly to allow for a change of witnesses.
11:15 Meeting suspended.