The Bank of England would effectively be “financing torture” if President Nicolás Maduro were to win a British court case ordering it to hand $1bn of Venezuelan gold in its vaults to his regime, opposition leader Juan Guaidó has warned.
Speaking to the Financial Times after the High Court in London recently heard arguments in the lawsuit, Mr Guaidó said it was “very important for us to protect that gold and keep it out of the clutches of the Maduro dictatorship. [They are] not trying to get hold of it to deal with the humanitarian emergency. They’re trying to get it so they can steal it.”
The legal battle comes as Venezuela grapples with widespread shortages of food, water and fuel as well as coronavirus and choking US sanctions. The country has been in economic freefall for years but residents in Caracas say this is the worst crisis they have ever experienced.
Desperately short of hard currency, the Maduro regime is trying to unblock frozen Venezuelan assets across Europe. Vanessa Neumann, Mr Guaidó’s diplomatic envoy to London, said that if the court upheld their arguments in the BoE case “it will set a precedent for all central banks. It will be a winner takes all.”
The Maduro regime had filed a suit earlier this month against the BoE to try to unblock the Venezuelan gold in its possession, saying funds from its sale would be routed to the UN Development Programme to help tackle coronavirus in Venezuela.
Mr Guaidó argues that since the UK, along with more than 60 other nations, has recognised him as Venezuela’s rightful interim president following fraudulent elections in 2018, it is his appointees and not those of Mr Maduro who have the right to the gold. The BoE has not commented.
In a blow to the Maduro side, the court decided it would rule first on who was the legitimate government of Venezuela before considering whether to release the gold. A decision is expected in late June or July.
The case has few legal precedents. Although Britain’s then foreign secretary Jeremy Hunt publicly recognised Mr Guaidó as Venezuela’s leader last year, London retains full diplomatic relations with the Maduro administration.
English courts have seldom had to decide between two entities that both claim to be the legitimate government of a country. Lawyers cite a case involving Somalia in 1993, and a Libyan lawsuit in 2016.
“We trust that we will win. We believe in the British justice system,” Mr Guaidó said.
Mr Maduro has been using gold from Venezuelan reserves and from illegal mining in the Amazon to pay its longstanding ally Iran for emergency petrol shipments and for help in trying to restart the country’s oil refineries. Both countries are labouring under increasingly tight US sanctions.
Eight tonnes of gold have already been airlifted to Tehran as payment for its help, Mr Guaidó said, and the Maduro government might also be using uranium as a currency. Iran has sent five oil tankers of petrol to Venezuela in recent days, as well as refinery technicians and equipment.
“The information we have is that they’re paying in gold, but we presume that there could be other minerals involved, including uranium,” Mr Guaidó said, citing the case of a uranium seizure by police in northern Venezuela in March. “It wouldn’t be crazy to think that they might be sending this type of material to Iran.”
Mr Guaidó said Venezuela’s petrol shortage has been so bad that some people were taken to hospital “on donkeys — I’m not exaggerating — on beasts of burden, because there was not enough petrol for the ambulance”.
Despite the increasingly dire economic situation, Mr Guaidó has struggled to make headway in his campaign to force Mr Maduro to accept free and fair elections. A US proposal in March for Mr Maduro to step down in favour of a transitional government of Maduro and Guaidó representatives pending fresh elections has not gained traction.
Mr Guaidó said the opposition had to “stay firm” and “increase internal pressure” on Mr Maduro, though he recognised that coronavirus curbs on mass gatherings made street demonstrations impossible. “We have to resist. It’s not simple”, he said, citing increased government repression that has led to 430 political prisoners and 1,500 political exiles.
“We are up against people who prefer to ally themselves with Iran, with groups like the ELN [a Colombian Marxist guerrilla group], imprison and torture [people] and destroy the oil industry instead of reaching a sensible serious political agreement which has the support of the international community,” he said.
Additional reporting by Jane Croft in London