The UK High Court on Friday rejected the most recent request by the government of Nicolás Maduro to have access to more than US$1 billion in Venezuelan gold reserves, which are stored in the underground vaults of the Bank of England.
Venezuela’s gold reserves have been the subject of a struggle for control between President Maduro and the leader of the opposition, Juan Guaidó, recognized by the United Kingdom and other countries in the West as interim president of that Latin American country.
Both Maduro and Guaidó have each appointed different boards for the Central Bank of Venezuela (BCV) and the two have issued contradictory instructions regarding the management of gold reserves.
The Supreme Court of Justice of Venezuela (TSJ), with an official tendency, had ruled to reduce Guaidó’s interference in gold and that the reserves should be transferred from London, but the British judge Sara Cockerill dismissed that argument.
Cockerill said there was “clear evidence” that the TSJ was stacked with judges who supported Maduro and that their decisions were not recognized under British law.
The ruling represents a victory for the opposition but, despite the fact that the United Kingdom considers Guaidó’s meeting valid, the judge Cockerill has not authorized the opposing faction to access the reserves. That is to be determined at another hearing.
However, Juan Guaidó celebrated the British court’s decision on his website as “another international victory for democracy and freedom.”
“This decision represents one more step in the process of protecting Venezuela’s international gold reserves and their preservation for the Venezuelan people and their future,” said the Venezuelan opposition leader.
After learning of the decision, the legal representation of the Maduro government declared that it will continue with its efforts to access the reserves.
“This is an unfortunate ruling that is based on a narrow legal issue on the recognition of foreign judges,” said Sarosh Zaiwalla, who represents the Central Bank of Venezuela.
“The BVC is considering an appeal”added the lawyer.
President Maduro’s legal team maintains that the State seeks to be able to sell part of the 31 tons of gold to finance its response to the covid pandemic and strengthen the decimated health system.
Guaidó, for his part, alleges that the Maduro government wants the resources to pay its allies who have helped him deal with serious liquidity problems, after years of crisis, something that the government’s lawyers deny.
Access to gold has been frozen since 2019after several nations led by Washington and London endorsed Guaidó and declared him interim president.
The opposition leader soon asked the Bank of England to block the Maduro government’s access to gold reserves.
The BVC filed a lawsuit against the Bank of England to regain control, arguing the need for these funds to cover the costs of measures against the pandemic.
According to legal experts, the case – in which the highest court of one country interprets the Constitution of another – is unprecedented.
Sarosh Zaiwalla considered it “unfortunate” that the magistrate “was constrained by technical regulations”, developed “in different contexts”, when recognizing the rulings of the TSJ that illegalized Guaidó’s acts.
For decades, Venezuela has stored gold that is part of its Central Bank reserves in foreign banksboth in Europe and in the United States, a strategy followed by many other nations.
Large countries have the capacity to be able to protect their own reserves, so having the reserves elsewhere is a conventional strategy adopted by smaller countries for protection and safeguarding.
In 2011, then President Hugo Chávez repatriated about 160 tons of gold from US and European Union banks to the Central Bank in Caracas, citing his country’s need to have physical control of assets.
As the economist and opposition deputy José Guerra told BBC Mundo in August 2021, “about 90% of the gold that Venezuela had abroad was brought and placed in the vaults of the BCV.” Most of Venezuela’s gold reserves are in Caracas, he assured.
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