Nicola Sturgeon "misled" the Scottish Parliament when she said her Government couldn’t launch a money laundering probe against Donald Trump, a court has heard.

The Court of Session heard how the SNP administration was asked last year to investigate how the Trump Organisation managed to pay for golf course developments in Scotland.

Advocate Aidan O’Neill QC, who represents international human rights group Avaaz, told judge Lord Sandison on Wednesday that Ms Sturgeon didn’t understand the law on a form of investigation called unexplained wealth orders, which is what her Government was told it could use to investigate Mr Trump’s finances.

The hearing concerns how Mr Trump obtained the funding for the Menie golf course in Aberdeenshire and the Turnberry resort in Ayrshire.

But Ms Sturgeon told the Scottish Parliament that the Government couldn’t launch such a probe and that the responsibility for the investigation lay with the Crown Office’s Civil Recovery Unit.

The hearing concerns how Donald Trump obtained funding for golf courses in Aberdeenshire and Ayrshire

Credit: Jeff J Mitchell/Getty Images

However, Mr O’Neill told the court that Ms Sturgeon said that the Civil Recovery Unit was politically independent from the Scottish Government, but her Government’s position later changed.

He said the then Justice Secretary Humza Yousaf later announced that the law allowed for the Scottish Government to launch an unexplained wealth order investigation.

Mr O’Neill told the court that Mr Yousaf was correct – that the law allowed for the Scottish ministers to launch such a probe.

He added that Ms Sturgeon failed to understand the law and branded it as "worrying" that she didn’t have a proper understanding of the legislation.

Mr O’Neill, who is asking for permission from the court for a judicial review, which he hopes will overturn the Scottish Government’s refusal to launch an unexplained wealth order against Mr Trump, added: "Strangely, the First Minister didn’t understand the law and misled Parliament on that point.

"That’s actually significant and worrying for if they have misunderstood the law once and they are in error there’s every likelihood – unless they get proper guidance from the court – that they could do so again."

The Scottish Green Party first called for an "unexplained wealth order" in February amid questions about how Mr Trump had managed to finance the purchases of the courses at Turnberry in 2014 and at Menie In 2006.

Nicola Sturgeon was accused of failing to understand to law surrounding Unexplained Wealth Orders

Credit: Jeff J Mitchell/PA Wire/Jeff J Mitchell/PA Wire

The UK Government introduced the orders in 2018 to help investigations into money laundering and other criminal financial activity.

Patrick Harvie, the Greens co-leader, has said Mr Trump’s unusual pattern of spending and the ongoing civil and criminal cases in the US provided Scottish authorities with the grounds to investigate the businessman.

Mr Trump’s son Eric said the claims had "no basis in fact".

However, Ruth Crawford QC, acting for the Scottish Government, said because Mr O’Neill’s clients hadn’t acted within three months of the Scottish Government’s refusal – as the law surrounding judicial reviews requires – the matter shouldn’t proceed.

Ms Crawford also said that Mr O’Neill had misunderstood the law surrounding unexplained wealth orders and that the Scottish Government had acted lawfully.

Urging Lord Sandison not to grant Mr O’Neill’s client permission to have a judicial review, Ms Crawford added: "Such an issue is not justiciable. It has no real prospect of success."

Lord Sandison said he needed time to consider his decision.