In battle for over $ 1 billion in gold, UK backs Guaido as president of Venezuela

Venezuelan opposition leader Juan Guaido addresses the media in Caracas, Venezuela, July 12, 2021. REUTERS / Leonardo Fernandez Viloria

LONDON, July 19 (Reuters) – The British government on Monday attempted to cancel an offer by the Venezuelan central bank backed by Nicolas Maduro to repatriate nearly $ 1 billion of its gold stored in London, with an unequivocal statement that ‘he supported the opponent Juan Guaido. rather.

Legal teams representing the Maduro and Guaido parties were at the UK Supreme Court in the final round of a long-running standoff over who should control what is roughly 15% of Venezuela’s foreign exchange reserves.

Lawyers representing the central bank say the sale of gold would fund the response to the coronavirus pandemic and strengthen a health system drained by more than six years of economic crisis.

The Bank of England, whose vaults house the gold, however refused to release it after the British government joined dozens of other countries in early 2019 in backing Guaido on the grounds that Maduro’s victory in the presidential election of the previous year was rigged.

“The British government is clear that Juan Guaido has been recognized by Her Majesty’s Government since February 2019 as the only legitimate president of Venezuela,” the British Foreign Office said in a statement, after being invited by the Supreme Court to clarify its position before Monday’s case.

The last minute intervention of the Ministry of Foreign Affairs was accompanied by a legal document of 30 pages document.

“The scope of the dispute appears to have narrowed,” Supreme Court President Lord Reed said, referring to a case that had been brought primarily to decide whether the UK recognizes Guaido as the leader of Venezuela despite the fact that Maduro still ruled the South American country from day to day. day basis.

It looked like it might help close the deal quickly, but it wasn’t. Queen’s lawyer Nick Vineall, representing the Maduro-backed central bank, said instead of being “fatal” for his side, the British Foreign Secretary’s statement had instead supported him.

“Traditional statements of recognition have been statements of recognition in relation to governments. There is no statement of recognition in this case in relation to governments,” Vineall said. “This means the position remains that Mr. Maduro effectively controls Venezuela.”


The gold dispute began in May 2018 when Maduro won re-election in a vote the main opposition coalition boycotted and called a sham. Subsequently, Boris Johnson, then British Foreign Secretary, said: “We may have to tighten the economic screw on Venezuela.”

Concerned about the rise in sanctions against the Maduro government, the Venezuelan central bank (BCV) then told the Bank of England (BoE) that it wanted to bring home the 14 tonnes of gold it had stored there. .

Towards the end of 2018, Calixto Ortega, the chairman of BCV, traveled to London to discuss the matter with BoE officials, according to Sarosh Zaiwalla, a London-based lawyer representing BCV, but they said to Ortega that there was a problem with his authority.

The following February, Britain joined dozens of other nations in supporting Guaido’s claim to be the rightful president. In April, the US Treasury imposed sanctions on the BCV, alleging that Maduro was using it to “plunder” Venezuelan assets in order to “enrich corrupt insiders”.

Prior to the sanctions, Venezuela repaid several gold exchange transactions BCV had made with Deutsche Bank (DBKGn.DE) in previous years, people familiar with the deal said. This resulted in the return of 17 tonnes of gold held in BoE coffers under BCV control, bringing its holdings to 31 tonnes, or about a quarter of Venezuela’s total gold reserves.

The sanctions then triggered the early termination of other gold swaps concluded between BCV and Deutsche Bank, releasing more gold to BCV, according to a timeline filed in previous court cases by Guaido’s legal team.

Guaido’s team then went to UK courts to determine who had the authority to represent BCV and receive the gold.

The European Union, which Britain officially left at the start of the year, said in January that it could no longer legally recognize Guaido as Venezuela’s president after losing his post as leader of parliament in the wake of the legislative elections in December, although the EU does not recognize this vote. .

Reporting by Marc Jones; Editing by Peter Cooney and Lisa Shumaker

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