Battle for Venezuelan gold starts at UK’s top court

A jogger runs past the Bank of England is pictured in the City of London on February 5, 2021. (NIKLAS HALLE'N / AFP)

The question of who controls more than US$1 billion of Venezuelan gold stored in the Bank of England’s vaults, took another twist after the British government said that it continues to recognize the leadership of opposition figure Juan Guaido.

A UK Supreme Court hearing that started Monday will decide whether the BOE must release the bullion to the Venezuelan central bank, controlled by the government of Nicolas Maduro. The long-running legal battle has reached the top court after judges questioned whether the UK’s previous recognition of Guaido was clear and ignored Maduro’s effective control in Caracas.

The long-running legal battle has reached the top court after judges questioned whether the UK’s previous recognition of opposition figure Juan Guaido was clear and ignored President Nicolas Maduro’s effective control in Caracas

But the UK’s foreign secretary, Dominic Raab, rejected the earlier ruling, saying that his government has formally recognized Guaido as interim president in all respects since early 2019 and continues to do so, according to documents prepared for the four-day hearing. That recognition came after Maduro was inaugurated for a second term following an election that the US and others said was rigged.

The Supreme Court case is being heard after a lower court gave Maduro another shot at gaining control of the gold, saying that the UK’s recognition of Guaido as interim president was “ambiguous.”

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The central bank argued that previous statements of recognition had ignored the reality on the ground in Venezuela where British diplomats maintained relations with Maduro officials.

“This is about sovereignty and power in Venezuela,” Nicholas Vineall told the court.

Venezuela’s central bank sued the BOE for access to the bullion that it says is urgently needed in a joint effort with the United Nations Development Fund to fight the COVID-19 pandemic.

The opposition has said that if it gets control of the bullion, it plans to safeguard the gold for the time being, as part of Guaido’s efforts to secure Venezuela’s financial assets abroad.

The Maduro government was attempting to “dance on the head of a pin” by arguing that the UK’s recognition was limited, Guaido’s lawyer Timothy Otty said in court Monday.

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“It’s always been our submission that there wasn’t a lot to argue about,” he said.