Who will collect the loot? 30 tons of Venezuelan gold trapped in London in a surprising legal battle

Who will collect the loot?  30 tons of Venezuelan gold trapped in London in a surprising legal battle

The five judges of the highest British legal jurisdiction will hear arguments from both sides in the dispute until Thursday, which will give English justice a reason for the fate of these reservations, which represent more than a billion dollars.

The case is the result of political stalemate in Venezuela. Its President Nicolas Maduro is not recognized by some fifty countries, including the United States, and seeks to oust him from power. Opposition leader Juan Quito is considered the caretaker Prime Minister of the United States, but has no authority.

In this context, the Venezuelan government, through the Venezuelan Central Bank (PCV), has been trying for three years to recover about 30 tonnes of gold stored in the Bank of England (BoE). Mr. London recognizes Guido as interim president.

In the face of the BoE’s denial, lawyers representing BCV began a process last year to recover these reserves, saying they wanted to sell them for financial measures to combat the Covid 19 epidemic in their country. The Venezuelan government has promised to transfer the funds to the United Nations Development Program.

According to them, the United Kingdom continues to recognize President Maduro, especially through its diplomatic relations. The Foreign Minister’s comments in support of Guido did not change anything.

The situation is really vague. London has not recognized the legitimacy of the new chamber and has reiterated its support for Juan Guido and the legislature elected in 2015, yet diplomatic relations with the embassy in Caracas have been kept to a minimum.

Conflicting results

At the Quito camp, which appointed its own head of the central bank at a time when the country’s national legislature was in control, London is being asked not to touch the bully, otherwise it could be used to break up people or land in the pockets of the “Kleptocrat” regime.

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Pro-Quito first won in the British courts: In July 2020, the London Commercial Court ruled that Juan Guido had been recognized by the United Kingdom as the interim head of Venezuela, and joined the decision.

But three months later, the Court of Appeals overturned the ruling, ruling that a political declaration did not create a government decision and that the government of British Prime Minister Boris Johnson could actually consider approving the Maduro administration.

At risk: The lure of the City of London and the Bank of England as safe deposits for foreign assets

The Supreme Court finally agreed to examine the controversy. “It is a question of whether the British government has recognized interim President Guido as President of Venezuela, and therefore whether there can be any challenge to the validity of Mr. Guido’s appointments to the Board of Directors of the Venezuelan Central Bank. It has been legally handled by an English court,” he wrote.

This sets a precedent for the opposition to believe that if the Supreme Court rules in favor of the PCV administration appointed by Juan Guido, they can use it to recover Venezuelan assets deposited in other European central banks.

On the other hand, the partner of law firm Jiwala & Co, which represents Maduro’s pro-board of directors at PCV, warned on Monday: The Bank of England is a safe deposit for foreign assets that could “have an impact on the charm of the City of London”.

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About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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