Nicolás Maduro Can’t Sell Venezuelan Gold at Bank of England, Court Rules

By Elian Peltier and Anatoly Kurmanaev

It would be unlawful to allow Mr. Maduro access to the gold, a British High Court judge said, because Britain’s government recognizes his rival, Juan Guaidó, as Venezuela’s rightful leader.

President Nicolás Maduro of Venezuela in Caracas in March.
President Nicolás Maduro of Venezuela in Caracas in March.Credit...Manaure Quintero/Reuters

By Elian Peltier and

LONDON — A British judge ruled on Thursday that President Nicolás Maduro of Venezuela cannot get access to $1.8 billion in gold in a Bank of England vault, because Britain does not recognize him as the leader of his suffering country.

Like many Western countries, including the United States, the British government has “unequivocally recognized” the opposition leader Juan Guaidó as the country’s interim president, a High Court judge in London, Nigel Teare, wrote in his ruling, adding that it was therefore unlawful to give the gold to Mr. Maduro.

The decision was the latest blow to Mr. Maduro and his efforts to revive an economy that has been in free-fall for years, battered by international sanctions, low oil prices, corruption and now the coronavirus. Venezuela’s government has struggled to tackle the pandemic with a once-robust health care system now depleted of its most basic needs.

The Central Bank of Venezuela had sought access to the gold reserves in Britain, prompting a legal fight over who had the authority to seek their release — Mr. Guaidó, officially the head of the Venezuelan National Assembly, or Mr. Maduro’s government.

Venezuela has long stored gold reserves at the Bank of England, which has the world’s second largest cache of gold behind the New York Federal Reserve.

Mr. Maduro’s government said earlier this year that funds raised from selling the equivalent of $1 billion of Venezuela’s gold reserves would be routed through the United Nations Development Program to import food and medicine for an increasingly desperate populace and shore up the country’s pandemic response. Sanctions have helped crush the Venezuelan economy, but food, medical supplies and humanitarian efforts are exempt from British sanctions on the country.

Mr. Guaidó’s team, which has urged the British government not to transfer the gold to the Bank of Venezuela since early 2019, argued that the money would be squandered on corruption and cronyism that have been a hallmark of Mr. Maduro’s seven-year rule, turning Venezuela into one of the world’s most dysfunctional countries.

ImageVenezuela has gold reserves at the Bank of England, which has the world’s second largest cache of gold behind the New York Federal Reserve.
Venezuela has gold reserves at the Bank of England, which has the world’s second largest cache of gold behind the New York Federal Reserve.Credit...Andy Rain/EPA, via Shutterstock

The Bank of England refused to release the gold, arguing that it had received conflicting instructions from the rival factions claiming to be Venezuela’s legitimate government, and the Central Bank of Venezuela responded by filing a lawsuit in May.

At the heart of the case, Justice Teare wrote, was whom the British government recognized as the president of Venezuela.

Mr. Maduro claimed to have won re-election in 2018, and was sworn in for a second term in January, 2019, but Mr. Guaidó and the opposition-controlled National Assembly declared the election and Mr. Maduro’s presidency illegitimate. Under the Venezuelan Constitution, the leader of the National Assembly acts as interim president if the presidency is vacant.

The British government, like most countries in Europe and the Americas, recognized Mr. Guaidó as Venezuela’s interim president. Mr. Guaidó was re-elected president of the National Assembly in January.

In his ruling on Thursday, Justice Teare ruled that under a “one-voice doctrine,” Mr. Guaidó was the sole leader of Venezuela, albeit temporarily, and that Mr. Maduro could not transfer the funds.

Sarosh Zaiwalla, a lawyer representing the Venezuelan bank, said in a statement that the ruling “entirely ignores the reality of the situation on the ground,” and that it would appeal the decision.

“Mr. Maduro’s government is in complete control of Venezuela and its administrative institutions, and only it can ensure the distribution of the humanitarian relief and medical supplies needed to combat the coronavirus pandemic,” Mr. Zaiwalla said.

Mr. Guaidó called the ruling “a great court victory that keeps the gold safe from dictatorship.” He said the gold would remain in the Bank of England until further notice.

A judge in London ruled that it was unlawful to give the gold to Mr. Maduro since the British government recognizes the opposition leader Juan Guaidó as Venezuela’s leader.Credit...Manaure Quintero/Reuters

Mr. Maduro has unsuccessfully tried to withdraw the gold from Britain since 2018, as he grew wary that the bullion could be caught up in international sanctions. Venezuela’s formerly abundant oil exports have slowed to a trickle, and it has become dependent on the hard currency it can raise from gold sales to import basic products and consumer goods.

British officials have repeatedly sided with the United States in maintaining painful economic sanctions against Venezuela. President Trump’s former national security adviser John Bolton, in his recent book about his time at the White House, recounted how in 2019, Britain’s foreign minister at the time, Jeremy Hunt, “was delighted to cooperate on steps they could take, for example freezing Venezuelan deposits in the Bank of England, so the regime could not sell the gold to keep itself going.”

The gold reserves are one of the last major financial leftovers from Venezuela’s days as an oil superpower. Under Mr. Maduro the country has suffered a precipitous economic collapse, leaving most of its 30 million citizens struggling to meet basic needs. The already- dismal situation grew worse after oil prices plummeted in March.

While the ruling is a significant victory for Mr. Guaidó’s flagging political fortunes, it does nothing to ameliorate Venezuela’s humanitarian crisis, which has been worsened by the pandemic.

The authorities have reported over 6,000 coronavirus cases and 54 deaths, but human rights groups contend that the government is likely lowballing the numbers.

“The real number is almost certainly much higher, given the limited availability of reliable testing, limited transparency, and the persecution of medical professionals and journalists who report on this issue,” researchers at Human Rights Watch and Johns Hopkins University wrote in May.

The ruling puts the United Kingdom and Europe in an increasingly difficult diplomatic posture: supporting a nominal head of state who has no control over Venezuelan territory and whose political bid is becoming increasingly marginalized at home.

On Wednesday, Mr. Maduro called new parliamentary elections for December, after staffing electoral posts with loyalists, taking over key opposition parties and jailing or exiling opponents. If Mr. Guaidó and his supporters go ahead with plans to boycott the vote, they will lose control of the National Assembly, which has been the main source of his international legitimacy.

Elian Peltier reported from London, and Anatoly Kurmanaev from Caracas, Venezuela.