Bank of England Facing Billion-Dollar Lawsuit Following Refusal to Release Gold to Venezuela

Gold bullion is at the center of a billion-dollar lawsuit filed by the Venezuelan government against the Bank of England.

The seized gold, which is being withheld from Nicolás Maduro’s administration due to UK and US sanctions against Venezuela, is valued at €930 million or roughly $1.019 billion.

In 2018, amid violent protests and social unrest, the UK and US backed opposition leader Juan Guaidó in a losing bid to oust Maduro, declaring Guaidó the country’s interim president. They joined a list of over 60 countries calling Maduro’s reign illegitimate. But Guaidó’s campaign eventually lost steam and failed to drive support among Venezuelans.

Maduro’s opponents have continued to apply pressure. In March of 2020 the US Justice Department indicted the Venezuelan president and his inner circle of 14 high-ranking officials on drug trafficking, money laundering and other criminal offenses. In November of 2019, the European Union extended sanctions against Venezuela for a year.

Despite a long-standing banking relationship between Caracas and the Bank of England, with the gold account opened in 2008, according to the claim, BoE has denied Maduro any access to the vault containing the gold since 2018.

Maduro’s critics accuse him of stealing government funds and inflicting widespread pain and suffering on Venezuelans, leaving them without food and medicine, and depriving them of other basic goods and services. The pandemic has now pushed Maduro’s administration to a new level of desperation, accelerating the country’s unrelenting economic breakdown that is now exacerbated by the outbreak.

The Banco Central de Venezuela (BCV), which filed the claim in London’s Commercial Court on May 14th, says it needs the gold to help combat the coronavirus and stop it from spreading. Immediately prior to the filing, BCV reportedly tried to negotiate by designating the United Nations as the recipient of the proceeds from sales of the gold but that request was allegedly denied.

Says senior partner Sarosh Zaiwalla,

“With lives on the line, now is not the time to attempt to score political points. The Bank of England has a moral imperative to allow Venezuela to sell the country’s gold to allow the UNDP to effectively assist the Venezuelan population in the fight against COVID-19.”

As the United Nations demands that sanctions against Venezuela be lifted to alleviate suffering, Zaiwalla states that by withholding Venezuela’s gold reserves, the BoE is putting thousands of lives at risk, reports Financial News.

The Bank of England is one of the world’s largest custodians of gold, along with the New York Federal Reserve, and holds roughly 400,000 gold bullion bars valued at an estimated £200 billion ($244 billion).

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