Why is the Bank of England withholding Venezuelan gold?


“Progressive forces across Britain must support campaigns for our country to abandon its adherence to the US’s regime change agenda and engage constructively in dialogue with the Venezuelan government.”

By Logan Willams

The struggle to overturn British support for the US’ illegal sanctions against the people of Venezuela continues with the fight to return Venezuelan gold held by the Bank of England.

The Bank of England is currently withholding 31 tons of gold bars worth roughly $2 billion which the Venezuelan Government, through its Central Bank of Venezuela (BCV), deposited there for safe keeping. These gold reserves would be a vital resource for Venezuela to boost its recent economic upturn and fund public services after the global Covid crisis.

The Bank of England’s role in withholding these vital resources began in 2019 when BCV tried to withdraw the gold from the Bank of England’s vaults and return it to Venezuela, which would see the Bank refuse to agree to do so.

The Bank of England argued that since the British Government had recognised the US-backed and self-declared ‘President’ Juan Guaidό as Venezuela’s interim president in a statement by then Foreign Secretary, Jeremy Hunt, it could not hand over the gold to the BCV. The actual Venezuelan government quickly began legal efforts to reclaim control of these vital supplies through the British courts.

The process of legal battles to reclaim the withheld gold by the Venezuelan government has seen a variety of successes and failures. The Venezuelan government first lost its case in the Commercial Court, which endorsed the government’s recognition of Guaidό as Venezuela’s leader rather than elected president Nicholas Maduro. However, the Appeal Court overturned this verdict, reopening the argument that the British government is currently recognising President Maduro as exercising some or all the powers of the Venezuela presidency and has legitimate claim to the gold. The case then went to the Supreme Court for its verdict.

The Supreme Court would hear the case in 2021 the Supreme Court where the court, taking note of Hunt’s recognition of Guaidό and a further Foreign Office statement, accepted Guaidó as the head of the Venezuelan state. This ruling enshrined that Juan Guaido is entitled to appoint the board of the Central Bank of Venezuela (BCV), and therefore his own appointed ad hoc Board should control the gold. This decision ignored the fact that in the recent December 2020 elections to Venezuela’s National Assembly, although some opposition parties stood candidates, Guaidó boycotted the elections. He thereby lost his Assembly seat and any claim to be “interim president,” based on his presidency of the previous National Assembly.

Following the Supreme Court judgement, there was one more legal hurdle for Guaidó to clear before gaining control of the gold reserves. His ad hoc BCV board was appointed through a ‘transition statute’ passed by the Venezuelan National Assembly, but the Venezuelan Supreme Tribunal of Justice (STJ) had declared that transition statute null and void and the board appointments unconstitutional.

The Supreme Court therefore sent the case back to the High Court to determine whether the Guaidó board had any legal standing. On 29 July 2022, following a six-day trial in the Commercial Court, Mrs Justice Cockerill ruled that the Supreme Judicial Tribunal judgments about Guaidό’s ad hoc BCV Board were not to be accorded recognition. But the judge granted the BCV Board permission to appeal her judgment, keeping alive the theoretical possibility that a UK court might rule against Guaidό and recognise the Venezuelan government as the rightful owners of the gold. The appeal is yet to be heard.

With the Maduro-led Government now recognised again overwhelmingly internationally, most of the right-wing Venezuelan opposition engaging in elections again, and Guaidό very much a busted flush, the situation internationally makes the chances of Venezuela getting its gold back more favourable.

It is vital that we recognise that we cannot place any reliance on the British courts to recognise the correct position. Therefore, progressive forces across Britain must support campaigns for our country to abandon its adherence to the US’s regime change agenda and engage constructively in dialogue with the Venezuelan government. We must work through our organisations to increase international solidarity with Venezuela and support its struggle against illegal sanctions and the withholding of assets.

  • Logan Williams is a National Education Union (NEU) activists and a Executive Member of the Venezuela Solidarity Campaign.
  • Sign the petition demanding Rishi Sunak return Venezuela’s gold here.
  • You can follow the Venezuela Solidarity Campaign on Facebook and Twitter.
Featured image: A pile of stacked gold bars. Photo credit: Stevebidmead under CC0 1.0 Universal (CC0 1.0) Public Domain Dedication

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