Fri | Jul 30, 2021

UK blocks Maduro from Venezuelan gold holdings

Published:Tuesday | July 20, 2021 | 12:07 AM
Leader of Venezuela’s National Assembly Juan Guaidó (left) and and Venezuelan President Nicolás Maduro.
Leader of Venezuela’s National Assembly Juan Guaidó (left) and and Venezuelan President Nicolás Maduro.

The United Kingdom government sought on Monday to prevent Venezuela’s President Nicolás Maduro from gaining access to nearly US$2 billion of gold held by the Bank of England as the UK Supreme Court started hearing a case that hinges on the question of who should be considered the Latin American nation’s president.

The UK told the court that its recognition of opposition leader Juan Guaidó as president is clear and long-standing, and therefore he is the person authorised to decide how the gold held by Britain’s central bank should be used. The government’s statement came after a lower court said the UK’s recognition of Guaidó was “ambiguous”.

“The UK government has the right to decide who to recognise as the legitimate head of a foreign state,” the Foreign, Commonwealth and Development Office said in a statement. “The UK recognises Juan Guaidó as president of Venezuela and, consequentially, he is the only individual recognised to have the authority to act on behalf of Venezuela as its head of state.”

Maduro has demanded access to the gold to help his cash-starved nation fight the coronavirus pandemic. But the Bank of England has refused to hand it over, citing the UK government’s recognition of Guaidó.

Guaidó has sought to preserve the gold stash at the Bank of England to keep it out of the hands of the Maduro government, which it contends is illegitimate and corrupt.

Guaidó, who was the leader of Venezuela’s National Assembly, challenged Maduro’s claim to the presidency, arguing that his 2018 election was rigged and invalid. Guaidó says he is the country’s interim president under provisions of the constitution that allow the head of the legislature to take power until free elections can be held.

Countries, including the United States and United Kingdom, have recognised Guaidó as the legitimate president of Venezuela, although China, Russia and many others have not, and Maduro holds effective power within Venezuela.

The battle over the gold is being fought out between two competing governing boards of the Central Bank of Venezuela, one appointed by Maduro and the other by Guaidó.

Maduro’s lawyers argue that he is still president of Venezuela and that the UK has recognised this by continuing diplomatic relations with his government.

Leigh Crestohl, a lawyer representing the Maduro board, said the UK government’s position threatens the attractiveness of the City of London and the Bank of England as a secure place for foreign assets.

“International observers to this case may be surprised by the possibility that a unilateral statement of political recognition by the UK government can dispossess a foreign sovereign of assets deposited in London, without any recourse in the English court,’’ Crestohl, a partner at the London-based law firm Zaiwalla & Co, said in a statement. “This is all the more so where that recognition ignores the reality on the ground.”