High Court battle over £800m of Venezuelan gold in Bank of England vaults

The Bank of England Credit: Yui Mok/PA

A battle over one billion US dollars (£800 million) of Venezuelan gold held in the Bank of England’s vaults is set to be heard by the High Court.

Banco Central de Venezuela (BCV) is taking legal action to release the gold bullion held on its behalf, which it wants to sell to help tackle the country’s coronavirus crisis.

BCV says it has agreed to transfer the funds to the United Nations Development Programme (UNDP) to buy “healthcare equipment, medicines and basic foodstuffs” to address the Covid-19 emergency in Venezuela.

But the Bank of England (BoE) says it is “caught in the middle” of rival claims to the gold: by the BCV board appointed by Venezuelan president Nicolas Maduro and an “ad hoc” board appointed by opposition leader Juan Guaido, who has asked the BoE not to “act on instructions from the Maduro board”.

A four-day hearing to decide who the UK Government formally recognises as the president of Venezuela will begin on Monday.

Mr Maduro became president of Venezuela following the death of Hugo Chavez in 2013 and was sworn in for a second term last year amid claims of vote-rigging in 2018’s election, which was boycotted by opposition parties.

In February 2019, then Foreign Secretary Jeremy Hunt announced that the Government recognised Mr Guaido, the head of Venezuela’s National Assembly, as “the constitutional interim president of Venezuela until credible presidential elections can be held”.

Lawyers for Mr Guaido – who is recognised by the US and more than 50 other nations – say he is therefore “entitled to assert Venezuela’s claim to the gold” held by the BoE.

Venezuelan opposition leader Juan Guaido (right) meeting Foreign Secretary Dominic Raab meeting at the Foreign Office in London for talks in January Credit: PA/Alberto Pezzali

But, in a statement ahead of the hearing, the BCV’s solicitor Sarosh Zaiwalla accused the BoE of “holding Venezuela’s gold in a politically motivated move” to support US President Donald Trump’s “foreign policy objectives in Venezuela”.

He referred to an upcoming book by former US national security adviser John Bolton which claims Mr Hunt was “delighted to co-operate” with the US on “freezing Venezuelan gold deposits in the Bank of England, so the regime could not sell the gold to keep itself going”.

Mr Bolton’s book – which is due to be published on Tuesday after a US federal judge dismissed the White House’s attempt to block its release – also claims Mr Trump said it would be “cool” to invade Venezuela and that the country was “really part of the United States”.

Mr Zaiwalla said the BCV had negotiated with the UNDP “to ensure all funds raised by the sale of Venezuelan gold will be used in the fight against Covid-19”, but that the BoE’s “continued intransigence is putting lives at risk”.

He added: “This money is now needed to save lives.

“It will not be used by the Maduro regime and will instead go directly to aid efforts to slow the spread of Covid-19 in the country.

“The Bank of England should stop fighting and release this money now, before more lives are lost.”

Before the hearing, Mr Guaido’s chief overseas legal representative Jose Ignacio Hernandez told Reuters that “recognition from the court would be a very important precedent” in relation to other Venezuelan assets, including a reported 5 billion US dollars frozen in foreign bank accounts.

The hearing before Mr Justice Teare, which will be conducted remotely via Skype, will take place over four days and it is expected that the court will reserve its judgment.