The nation’s top prosecutor will now have to decide whether to pursue an investigation into how the former president paid for his Trump Turnberry course in 2014, and Trump International Golf Links near Aberdeen eight years earlier.
New York-based human rights organisation Avaaz had argued that the Scottish Government should have embarked on an unexplained wealth order probe into how the deals were financed.
However, in a written judgment released on Thursday, Judge Craig Sandison ruled Scottish ministers had acted lawfully in declining to take the investigation.
“I wish to make it clear that I express no view whatsoever on the question of whether the [criminal law] requirements were or appeared to be met in the case of President Trump,” wrote Judge Sandison.
“Further, for aught yet seen the Scottish Ministers may still make a UWO application in relation to President Trump’s Scottish assets.”
The case will now fall to Lord Advocate Dorothy Bain to decide whether to pursue a criminal investigation.
Mr Trump paid $60m in cash to buy Trump Turnberry in 2014, a deal that drew attention during his presidency as his finances were pored over by the press.
The self-described “King of Debt” had built his business empire by borrowing money through opaque financial deals.
However in the nine years leading to his election as president, Mr Trump spent $400m in cash on new properties, including buying 14 properties outright without borrowing a cent from any bank, The Washington Post reported in 2018.
Avaaz called on Scottish and US governments to investigate the origins of Mr Trump’s millions in spending.
The Scottish Green Party also called for an unexplained wealth order into Mr Trump’s finances, the BBC reported.
First Minister Nicola Sturgeon said it was up to the courts to decide whether to investigate the purchase of the two golf resorts.
However, former Justice Secretary Humza Yousaf contradicted Ms Sturgeon, and said the Government did have jurisdiction for an unexplained wealth order investigation.
Thursday’s ruling means the politically-charged case will be sent back to Ms Bain, who is the equivalent of an attorney general in Scotland.
After the decision. Avaaz’s legal director Nick Flynn said the time had come for a full investigation.
“The law may have been clarified, but a cloud of suspicion still hangs over Trump’s purchase of Turnberry,” he said in a statement.
“By any measure, the threshold to pursue a UWO to investigate the purchase has easily been crossed. The Lord Advocate should take urgent action in the interest of the rule of law and transparency, and demand a clear explanation of where the $60m used to buy Turnberry came from,” he said.
Sarah Malone, Executive Vice President of Trump International Scotland, told The Independent the ongoing legal action was a “ridiculous charade”.
“What a terrible indictment of Scotland and its reputation as a country to invest in and do business. Here we are facing the greatest economic crisis since WWII, and we are clogging up the courts with this ridiculous charade, costing taxpayers huge sums of money,” Ms Malone said in a statement.
“This sort of self-indulgent, baseless nonsense, contrived by political activists, serves only to hurt the hard-working people of Scotland who they ultimately want to put out of work by attacking legitimate businesses. Their claims are completely false. The Scottish Government righty rejected their petition which is nothing more than a disgraceful attempt to be relevant and hit out at President Trump.”
Eric Trump has previously described the investigation as “pathetic” and said it would deter overseas investment.