Gold in the London bank fuels battle between Venezuelan rivals

Gold in the London bank fuels battle between Venezuelan rivals

CARACAS, Venezuela (AP) – The political battle for control of Venezuela has turned into a stack of 8 billion gold bars in the Bank of England vault in London, where a judge is expected to decide soon who has the rightful claim to the precious metal.

Venezuelan President Nicolás Maduro says he needs the gold to help his starving country fight the corona virus pandemic. But the UK’s central bank, whose government recognizes Venezuelan opposition leader Juan Guaidó as the legitimate leader of his country, has refused to hand it over to the socialist government of Maduro.

A ruling by Justice Nigel Teare, which may be expected in a few days, could help clarify the question of who is Venezuela’s legitimate leader – at least in the eyes of one world power, experts say.

“If Maduro can get his hands on this money, it will weaken an important tool that the British government has to recognize Guaidó,” said Michael Camilleri, a Venezuela expert with the Washington-based Inter-American Dialogue think tank. “It undermines the power of that policy.”

The dispute depends on Britain’s stance on Venezuela, a country in an economic and political crisis where both Maduro and Guaidó have been claiming presidential powers for more than a year.

The United Kingdom acknowledges Guaidó’s assertion, which heads the Venezuelan Congress, as does the United States and about five dozen other governments. Guaidó proclaimed himself interim president in early 2019, months after Maduro declared victory in an election that his critics say had been forged in his favor.

British Foreign Secretary Jeremy Hunt recognized Guaidó as the constitutional interim president, and Guaidó met Prime Minister Boris Johnson early this year on a tour of Europe.

Despite its support for Guaidó, the United Kingdom continues to have diplomatic ties with the Maduro government. Maduro’s ambassador, Rocío Maneiro, is recognized by the British government and controls the Venezuelan Embassy in London, while British Ambassador Andrew Soper remains in Caracas.

At the same time, the British have not issued diplomatic credentials to the envoy who has named Guaidó Ambassador to the United Kingdom.

While Guaidó initially launched his campaign to oust Maduro with thousands of cheering supporters taking to the streets across Venezuela, the Socialist President has retained control of most branches of the Venezuelan government, including the military. Meanwhile, enthusiasm for Guaidó has waned.

Leigh Crestohl, a lawyer representing the Maduro-appointed Central Bank of Venezuela, said the Venezuelan leader is clearly in control of the country, which entitles him to take the gold.

“If a government has de facto control of an area, and this is recognized by the maintenance of full and normal diplomatic relations, it should be treated as formal recognition,” Crestohl said in a statement. “In our case, the law is clear.”

Guaidó urges the London court to order the Bank of England to keep the gold and not give it to the Maduro government, which it says is illegal and corrupt. His lawyers reiterated at a recent four-day hearing the argument that the leader of the National Assembly became the legitimate leader of Venezuela under the provisions of the country’s constitution. They dismissed the ongoing diplomatic ties between London and Maduro as irrelevant.

Venezuela was once one of the richest countries in Latin America, sitting on top of the largest oil reserves in the world. Critics of the Socialist government blame corruption and mismanagement for destroying the oil industry and the wider economy.

Maduro blames the country for what he believes is a United States-led economic war, and he accuses Washington of imposing crippling sanctions in an attempt to take over Venezuela through its ability to sell Venezuelan oil to block. He enjoys international support from China, Russia, Cuba, Iran and Turkey, among others.

Maduro is looking for much of the gold that Venezuela has in the Bank of England. He had requested access to gold before the coronavirus outbreak, and recently renewed the request, saying that his government would direct the money from selling the gold through a United Nations branch solely to the pandemic in Venezuela. combat.

Washington analyst Camilleri said there is a lot of skepticism about Maduro’s alleged plan to use the gold.

“Maduro tried to get that money for himself before coming back with the new claim that it was COVID-19 relief,” said Camilleri.

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Scott Smith on Twitter: @ScottSmithAP

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