The UK High Court ruled against Venezuela’s government in a legal battle regarding whether or not Venezuela could recall its $1bn of gold stored in the Bank of England.
According to the UK High Court, the UK had “unequivocally recognised opposition leader Juan Guaidó as president”, not successor to Hugo Chavez, President Nicolás Maduro, who had initiated a legal action against the bank to try and force it to release the gold. Venezuelan Central Bank lawyers have vowed to appeal against the judgement.
The gold is now being held by the Bank of England (BoE) after British and US sanctions on Mr. Maduro’s government. The BoE claims both Mr. Maduro and one from Mr Maduro’s rival, Juan Guaidó, who declared himself president of Venezuela last year. Mr Maduro’s government said it wanted the gold to fund its fight against the coronavirus pandemic.
Mr. Guaidó requested the Bank of England not to send the gold to the Maduro government. The Bank of England then asked the High Court to rule on whom the UK government recognizes as Venezuelan president, Mr. Maduro or Mr. Guaidó.
“Her Majesty’s Government does recognise Mr Guaidó in the capacity of the constitutional interim president of Venezuela and, it must follow, does not recognise Mr Maduro as the constitutional interim president of Venezuela,” said High Court Judge Nigel Teare.
Teare also said “no room for recognition of Mr Guaidó as de jure president and of Mr Maduro as de facto president”.
A Venezuela Central Bank lawyers says it recognizes the Maduro government and another lawyer said the High Court’s judgement says it entirely ignored “the reality of the situation on the ground.” Mr Maduro’s government was “in complete control of Venezuela and its administrative institutions.”
The Bank of England holds the second most amount of gold in the world––approximately 400,000 gold bars. Only the New York Federal Reserve has more. With Venezuela’s economy in free-fall, it has sold off some of the gold reserves kept at the central bank in Venezuela to its allies in Turkey, Russia, and the United Arab Emirates.
The US does not recognize the Maduro administration, and last year warned “bankers, brokers, traders, and facilitators” to not deal in “gold, oil, or other Venezuelan commodities stolen from the Venezuelan people by the Maduro mafia.”
Venezuela turned to its ally Iran to sell its gold, which is also under US sanctions. Its international reserves reached a 30-year low at the beginning of this year, according to Venezuelan Central Bank figures.