The Venezuelan government secured a legal victory on Monday in its battle to regain access to gold stored in the Bank of England (BoE).
On Monday, the English Court of Appeal ruled in favor of the Venezuelan Central Bank (BCV) concerning the control over 31 tons of gold stored in London, overturning a previous High Court ruling after a BCV appeal. The BoE has refused to repatriate the Venezuelan gold deposits since late 2018.
In July, Judge Nigel Teare ruled against a Venezuelan legal recourse to regain access to the reserves. Teare claimed that the UK Foreign Office had “unequivocally” recognized Juan Guaido as “interim president,” and thus under the “one voice” doctrine the judiciary was bound to the government’s position.
However, Monday’s decision by Lord Justices Lewison, Males and Phillips called on the UK government to clarify its “recognition” of Guaido.
It will be necessary to determine whether:
(1) HMG [Her Majesty’s government] recognises Mr. Guaido as President of Venezuela for all purposes and therefore does not recognise Mr. Maduro as President for any purpose; or
(2) HMG recognizes Mr. Guaido as entitled to be the President of Venezuela and thus entitled to exercise all the powers of the President but also recognizes Mr. Maduro as the person who does in fact exercise some or all of the powers of the President of Venezuela.
However, the court stopped short of ruling on the BCV attorneys’ claim that No. 10 Downing Street’s backing of Guaido violated international law.
In a statement, the BCV welcomed the Appeal Court’s overturning the “unusual” July ruling.
“The Venezuelan Central Bank will continue carrying out all actions necessary to protect its sovereign international reserves,” the statement read. The BCV reiterated that the reserves, valued at $1.8 billion at current gold prices, will be sold and the funds channeled through the United Nations Development Program (UNDP) to boost the country’s Covid-19 response.
Sarosh Zaiwalla, attorney at the Zaiwalla and Co. law firm representing the BCV, likewise praised the decision as positive for international law, arguing that Guaido is a “virtual prime minister with no real power inside the country.” He had previously warned that a refusal to grant the Venezuelan government control over the deposit would present “a threat to the Bank of England’s reputation abroad as a safe repository for sovereign assets.”
Opposition deputy Juan Guaido proclaimed himself “interim president” in January 2019 and was immediately recognized by the US, the UK and allied countries. In subsequent months, the Venezuelan government saw a host of assets held abroad frozen, including US-based oil subsidiary CITGO.
In a statement, the opposition leader’s office claimed that the ruling had not overturned the UK’s position. For her part, Guaido’s UK representative Vanessa Neumann stated that the decision over control of the gold would now return to a commercial court, which would ask that the Boris Johnson government clarify whether it retains any sort of “implicit recognition” of the Maduro government.
First published in Venezuela Analysis.