The UK Supreme Court has ruled that nearly $2 billion in gold reserves held by the Central Bank of Venezuela (BCV) in London must be handed over to opposition leader Juan Guaido.
The crux of the current decision was whether the British judiciary deemed the Guaido-appointed central bank board as legitimate. Venezuelan President Nicolas Maduro and interim president Guaido have appointed different boards of directors for BCV, which have given conflicting directions on how to manage its gold reserves. The pro-government Supreme Court of Venezuela (TSJ) has ruled to limit Guaido’s involvement in the gold trade and transfer reserves from London.
Judge Sarah Cockrell of the London High Court Chamber of Commerce has now dismissed this. The statement said there was “clear evidence” that the Supreme Court of Justice is composed of judges who support Maduro and that its decisions are not recognized under British law.
Guaido remains the “interim president” of Venezuela because the United States supports him. But his support from the opposition is faltering
The background to the debate is a bitter power struggle that has been going on in Venezuela for years. At the beginning of 2019, Parliament Speaker Juan Guaido, a young and largely unknown opposition politician, declared himself the interim head of state. More than fifty countries, mostly Western, including Great Britain, have recognized Guaidó. However, institutions in Venezuela are still under the control of the Maduro government. After several failed attempts to oust Maduro, Guaido is also counted in his own camp. His mobilizing power in the country has sharply declined.
Since President Maduro (pictured) took office in 2013, previously stable and prosperous Venezuela has plunged into chaos. The economy has shrunk by a third, hyperinflation has rendered money virtually worthless, many Venezuelans have become impoverished, the health care system has collapsed, and crime rates have skyrocketed.
Venezuela’s central bank rejected the “unusual ruling” of a British court. “This judicial decision violates the rule of international law and the Venezuelan constitutional and legal system, as it seeks to disregard the legitimate authorities of the Central Bank of Venezuela to justify the criminal network that facilitates the embezzlement of Venezuela’s international reserves,” the explanation read. . It is “extremely disturbing that British foreign policy, which in this case has given the courts a direct muzzle, is causing serious harm to the rights and interests of other citizens, institutions and states.”
Venezuelan Vice President Delcy Rodríguez called the decision of state television station VTV “outrageous, outrageous and extraordinarily excessive” and called on the British government to “fix things” and “stop pretending that Juan Guaido is a head of state he does not and will not be”.
On the other hand, Guaido welcomed the decision. “I can assure you that the country’s gold in England will remain protected from the clutches of dictatorship,” he wrote on Twitter after the ruling.
The 31 tons of gold that has been in the vaults of the Bank of England in London for years is one of the last great fortunes left from Venezuela’s days as an oil superpower. The country has been in a deep economic and supply crisis for years. Several million Venezuelans have left the country.
There are hardly any regions in the world where so many people leave their country: according to the UNHCR global report, 6.1 million people have left Venezuela by the end of 2021.
Maduro’s government has said it wants to sell gold to fund the coronavirus emergency and bolster a health care system battered by years of economic crisis. On the other hand, the opposition claims that the government intends to use the money for its foreign allies, which it denies.
In general, the dispute over gold is more political than legal in nature. Since 2018, Caracas has been trying to release the gold assets stored in London. At the time, Boris Johnson was Britain’s foreign minister. “We may have to tighten the economic noose around Venezuela,” he said at the time, describing the strategy for the Maduro government.
In his book The Room Where It Happened, Donald Trump’s former national security adviser, John Bolton, wrote that at a meeting in Washington, Johnson’s successor at the State Department, Jeremy Hunt, agreed to enlist the Bank of England to help the United States fight Maduro.
Dispute over Venezuelan gold in the Bank of England: The High Court in London has ruled that there is “no basis” for British judges to recognize the rulings of the Venezuelan Supreme Court
At the beginning of July 2020, Maduro’s government failed with a lawsuit to recover nearly half of the gold before the High Court in London. At the time, the court ruled that Great Britain did not recognize Maduro, but rather the opposition politician Guaido as president. At the end of 2020, the London Court of Appeal overturned this ruling.
Instead, the judges ordered a detailed investigation into diplomatic relations between the United Kingdom and Venezuela. It should be clarified who London recognizes as the legitimate head of the South American country. At the time, the court followed the arguments of the Venezuelan central bank that diplomatic relations with the current Maduro government had not been severed and that embassies were still manned.
The current ruling is a new setback for Nicolás Maduro’s government. However, the final word in the legal dispute has yet to be uttered. BVC will likely appeal. The case will be appealed in October to the UK Commercial Court.
It is not the only case involving Venezuelan gold in British courts. In 2020, Deutsche Bank petitioned the courts to rule on who is the legal guardian of the $123 million owned by BCV arising from the termination of the gold swap agreement between the Venezuelan institution and Deutsche Bank. Judge Cockrell’s ruling could also set a precedent in this case.
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