Gaby Oraa/Bloomberg

Top court allows Venezuela’s Juan Guaido to assert control of $1 billion gold

– Top judges accept U.K. government recognition of Guaido
– Bank of England is storing Venezuelan bullion in its vaults

By Jonathan Browning / Bloomberg News

LONDON
Petroleumworld 12 21 2021

The U.K.’s top judges ruled in favor of Venezuela’s Juan Guaido, paving the way for the opposition leader to assert control over more than $1 billion of gold stored in the Bank of England’s vaults.

The Supreme Court accepted the U.K.’s “clear and unequivocal recognition” of Guaido as president, in a ruling on Monday. The judges however, said a lower court will still need to consider whether Venezuelan court decisions should also be taken into account in deciding who ultimately controls the gold.

The long-running case has been heard by multiple U.K. courts since Venezuela’s central bank sued the BOE for access to the bullion, saying it was urgently needed in a joint effort with the United Nations Development Fund to fight the Covid-19 pandemic. Meanwhile Guaido has seen his support falter as President Nicolas Maduro continues to hold onto power and the ruling party dominates at the regional elections.

Battle for Venezuelan Gold Starts at U.K.’s Top Court

The international recognition comes at critical time for Guaido in Venezuela, with allies starting to doubt the ongoing viability of his interim government, said Luis Vicente Leon, head of local pollster Datanalisis.

“We have to remember there are only a few concrete things the interim government can control and Venezuela’s resources abroad are one of those few things,” Leon said.

While the lower court was ordered to consider the impact of Venezuelan rulings, the judges said that if such rulings assumed Guaido was not president then “those judicial decisions cannot be recognized or given effect by courts in this jurisdiction because to do so would conflict with the view of the United Kingdom executive.”

Sarosh Zaiwalla, a lawyer for the Maduro-led central bank, warned that foreign governments would think twice about storing assets in the U.K. after the ruling.

“This decision relied on a 19th-century doctrine and it could have the effect of validating a new approach to regime change, which has potentially serious and adverse ramifications for the U.K. as a safe repository for sovereign assets,” Zaiwalla said.

The opposition has said that if it gets control of the bullion, it plans to safeguard the gold for the time being, as part of Guaido’s efforts to secure Venezuela’s financial assets abroad.

“We look forward to the opportunity to demonstrate that the Venezuelan decisions relied upon by the Maduro side deserve no recognition by an English court as they are not the decisions of an independent judiciary respecting the rule of law,” said Jane Wessel, a lawyer for Guaido’s administration at Arnold & Porter.

— With assistance by Nicolle Yapur

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By Jonathan Browning from Bloomberg News

bloomberg.com  12 20 2021

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