The United Kingdom’s Supreme Court on Friday rejected the latest request by Nicolás Maduro’s government for access to more than $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 opposition leader, Juan Guaido, who is recognized by the United Kingdom and other countries in the West as the interim president of that Latin American country.
Both Maduro and Guaido have appointed different boards of directors for the Central Bank of Venezuela (BCV), and the two have issued conflicting instructions regarding the management of gold reserves.
The Supreme Court of Justice of Venezuela (TSJ), in a formal direction, ruled that Guaido’s involvement in gold should be reduced and that the reserves should be moved from London, but British Judge Sarah Cockrell rejected this argument.
Cockrell said there was “clear evidence” that the High Court of Justice was filled with judges who supported Maduro and that their decisions were not recognized under British law.
The ruling represented a victory for the opposition, but despite the fact that the UK considered Guaido’s board valid, Judge Cockrell did not authorize the opposition faction to access the reserves. This will be determined at another hearing.
However, Juan Guaido celebrated the British court’s decision on his website as “another international victory for democracy and freedom”.
“This decision represents another step in the process of protecting and preserving Venezuela’s international gold reserves for the Venezuelan people and their future,” the Venezuelan opposition leader said.
After learning of the decision, the legal representative of the Maduro government announced that it would continue its efforts to gain access to the reserves.
“This is an unfortunate ruling based on a narrow legal case related to the recognition of foreign judges,” said Sarosh Ziwala, who represents Venezuela’s central bank.
“The BVC is considering the appeal,” the attorney added.
President Maduro’s legal team asserts that the country is seeking to be able to sell part of its 31 tons of gold to fund its response to the coronavirus pandemic and to strengthen the decimated health system.
For his part, Guaido claims that Maduro’s government wants the resources to pay the salaries of its allies who helped him deal with serious liquidity problems, after years of crisis, something government lawyers deny.
Access to gold has been frozen since 2019, after several countries led by Washington and London backed Guaido and declared him interim president.
The opposition leader quickly asked the Bank of England to prevent the Maduro government from accessing gold reserves.
The BVC is suing the Bank of England to regain control, arguing that the money is needed to cover the costs of measures against the pandemic.
According to legal experts, the case – in which one country’s highest court interprets another country’s constitution – is unprecedented.
Sarush Ziwala considered it “unfortunate” that the judge “was constrained by technical regulations”, which were developed “in different contexts”, when recognizing TSJ rulings prohibiting Guaido’s actions.
For decades, Venezuela has hoarded the gold that is part of its central bank reserves in foreign banks, both in Europe and the United States, a strategy that many other countries are pursuing.
Large countries have the ability to protect their own reserves, so having reserves elsewhere is a traditional strategy of protection and protection for smaller countries.
In 2011, President Hugo Chavez returned about 160 tons of gold from US and EU banks to the Central Bank of Caracas, citing his country’s need for physical control of the assets.
As economist and opposition MP Jose Guerra told BBC Mundo in August 2021, “about 90% of the gold that Venezuela owned was brought abroad and put into BCV vaults.” He said most of Venezuela’s gold reserves are in Caracas.
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