Maduro Government Wins U.K. Appeal Over Venezuelan Gold

(Bloomberg) — A British appeals court ruled in favor of the Venezuelan government of Nicolas Maduro, and said the legal fight over the future of $1 billion in gold stored in the vaults of the Bank of England should be reconsidered.

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A selection of gold bars of various weights sit at Gold Investments Ltd. bullion dealers in this arranged photograph in London, U.K., on Wednesday, July 29, 2020. Gold held its ground after a record-setting rally as investors awaited the outcome of a Federal Reserve meeting amid expectations policy makers will remain dovish, potentially spurring more gains.

The judges Monday reversed a lower court ruling that the U.K. had unequivocally recognized opposition leader Juan Guaido as interim president. The government’s statements on Guaido may not have reflected the reality on the ground, the justices led by Judge Stephen Males said.

The U.K.’s recognition “is to my mind ambiguous, or at any rate less than unequivocal,” Males said in the ruling.

Venezuela’s central bank sued the BOE for access to the bullion, which has been in limbo since U.S. officials successfully lobbied their British counterparts last year to block Maduro’s attempt to withdraw the assets.

The U.K. government last year said it recognizes Guaido as Venezuela’s interim president until new, credible elections can be held. But Males said the Foreign Office should be asked to clarify whether it accepts that Maduro exercises power on the ground as president.

“The lower court judgment had led to a completely unrealistic situation,” Sarosh Zaiwalla, a lawyer for the Maduro-appointed central bank, said in a statement. The administration in control of the mint and day-to-day operations of the central bank in Caracas, “were being told that they could no longer deal with very substantial central bank deposits in London.”

© Bloomberg
A selection of gold bars of various weights sit at Gold Investments Ltd. bullion dealers in this arranged photograph in London, U.K., on Wednesday, July 29, 2020. Gold held its ground after a record-setting rally as investors awaited the outcome of a Federal Reserve meeting amid expectations policy makers will remain dovish, potentially spurring more gains.

A lawyer for the rival Guaido administration couldn’t immediately be reached for comment.

(Updates with comment from Maduro lawyer in sixth paragraph.)

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