Gold in London bank sparks battle between Venezuelan rivals
The political battle over control of Venezuela has turned to a US$1 .8-billion stack of gold bars sitting in the Bank of England’s vault in London, where a judge is expected to decide soon on who has the rightful claim to the bullion.
Venezuelan President Nicolás Maduro says he needs the gold to help his cash-starved nation fight the coronavirus pandemic. But the central bank for the United Kingdom, whose government recognises Venezuelan opposition leader Juan Guaidó as his country’s legitimate leader, has refused to hand it over to Maduro’s socialist administration.
A ruling by Justice Nigel Teare, which is expected possibly within days, could help clarify the question of who is Venezuela’s legitimate leader — at least in the eyes of one world power, experts say.
“If Maduro is able to get his hands on this money, it weakens a significant tool that the British government has towards implementing its recognition of Guaidó,” said Michael Camilleri, a Venezuela expert at the Washington-based Inter-American Dialogue think tank. “It undermines the strength of that policy.”
The dispute hinges on the British stance towards Venezuela, a country in economic and political crisis, where both Maduro and Guaidó have been claiming presidential powers for more than a year.
The United Kingdom recognises the claim of Guaidó, who heads Venezuela’s congress, as do the United States and about five dozen other governments. Guaidó proclaimed himself the interim president in early 2019, months after Maduro declared victory in an election that his critics say was rigged in his favour.
British Foreign Secretary Jeremy Hunt recognised Guaidó as the constitutional interim president, and Guaidó met with Prime Minister Boris Johnson early this year during a tour through Europe.
Despite its support for Guaidó, the United Kingdom continues to have diplomatic ties with Maduro’s government. Maduro’s ambassador, Rocío Maneiro, is recognised by the British government and has control of the Venezuelan Embassy in London, while British Ambassador Andrew Soper remains in Caracas.
At the same time, the British have not granted diplomatic credentials to the envoy Guaidó has named ambassador to the United Kingdom.
While Guaidó initially launched his campaign to oust Maduro with thousands of cheering supporters taking to the streets across Venezuela, the socialist president has maintained control over most branches of Venezuela’s government, including the military. Enthusiasm for Guaidó, meanwhile, has been fading.
Leigh Crestohl, an attorney representing the Central Bank of Venezuela administration appointed by Maduro, said the Venezuelan leader clearly has control of the country, giving him the right to take the gold.
“If a government is in de facto control of a territory, and this is recognised by the maintenance of full and normal diplomatic relations, this should be treated as formal recognition,” Crestohl said in a statement. “On our case, the law is clear.”
Guaidó is urging the London court to order the Bank of England to hold the gold and not give it to Maduro’s government, which it contends is illegitimate and corrupt. His lawyers reiterated during a recent four-day hearing, the argument that the National Assembly leader became Venezuela’s rightful leader under provisions of the country’s constitution. They dismissed as irrelevant the continued diplomatic ties between London and Maduro.
Venezuela was once among Latin America’s wealthiest nations, sitting atop the world’s largest oil reserves. Critics of the socialist government blame corruption and mismanagement for destroying its oil industry and the wide economy.
Maduro blames the country’s ills on what he says is an economic war led by the United States, and he accuses Washington of imposing crippling sanctions in an attempt to take over Venezuela by blocking his ability to sell Venezuelan oil. He enjoys international support from countries that include China, Russia, Cuba, Iran and Turkey.
Maduro is seeking a large part of the gold that Venezuela holds in the Bank of England. He had asked for access to the gold before the coronavirus outbreak and then recently renewed the request, saying his administration would channel the money from selling the gold through an arm of the United Nations solely to combat the pandemic in Venezuela.
Camilleri, the analyst in Washington, said there is widespread scepticism about Maduro’s purported plan for using the gold.
“Maduro was trying to get that money for himself before he came back with the fresh claim it was for COVID-19 relief,” Camilleri said.