Daniel Rey

The High Court should not give up Venezuela’s gold

The High Court should not give up Venezuela's gold
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Britain’s judicial system may be about to give $1 billion (£770 million) to one of the world’s most notorious dictators. Nicolás Maduro, the Venezuelan strongman, wants access to gold reserves held by the Bank of England. The leader, internationally condemned for chronic mismanagement of the economy and facilitating vast corruption, says he’ll use the funds to fight the coronavirus.

The Bank of England holds assets belonging to many countries, and the Venezuelan gold has been with the bank since 2008, when it was deposited by Maduro’s mentor, Hugo Chávez.

The High Court of England and Wales ruled against Maduro’s claim to the gold in July, asserting that in Britain’s view, Maduro is not the legitimate Venezuelan president. He appealed and sued the Bank of England.

On Monday, the Court of Appeal annulled the High Court’s ruling because Britain has retained formal diplomatic relations with Maduro. The judges were unable to make a conclusive ruling and asked the Foreign Office to stipulate whether it acknowledges Maduro as the de facto president. If it does, the case against him would become ‘null and void’.

Britain rarely breaks diplomatic relations – that’s more the United States’s game – and this might be Maduro’s loophole. After the Venezuelan election in 2018 was deemed fraudulent, Britain, along with the US, Canada, and a dozen Latin American countries, acknowledged Juan Guaidó, the president of the National Assembly, as the interim head of state.

In terms of meaningful diplomatic engagement, Britain stands with Guaidó, not Maduro. Indeed, Guaidó met Dominic Raab at the Foreign Office earlier this year, when he highlighted that Maduro’s tenure has created as many refugees as war-torn Syria. However, it’s Maduro’s envoy in London, not Guaidó’s, who has official diplomatic accreditation from the British government.

Maduro (whose lawyer in the Bank of England case represented Saddam Hussein’s regime in 2001) claims the gold would be sold and the proceeds used to fight the coronavirus pandemic. Maduro’s plan is to transfer the money from the Venezuelan Central Bank (BCV) to the United Nations Development Programme.

On these grounds, there might appear to be a humanitarian argument for granting Maduro access to the reserves. However, as Diego Moya-Ocampos, senior political risk analyst for Venezuela at IHS Markit, tells the Spectator: ‘There is no precedent for this type of arrangement and there have been no advanced discussions with the UN on how it would work. It’s part of Maduro’s propagandistic narrative, but it’s not real.’

‘If Maduro wins the case and the funds go to the BCV, there's no guarantee that they'll be transferred to the UN but rather used to repress dissidents.’

Maduro’s regime cannot be trusted. It holds leading opposition figures as political prisoners, employs armed gangs to keep ‘order’ in the streets, and cracks down on opponents with complete impunity. A report published by UN investigators last month affirmed that Maduro’s repressive methods include arbitrary and extrajudicial killings and the systematic use of torture. It maintained that Maduro is likely to be responsible for crimes against humanity.

What’s more, given widespread allegations of embezzlement and the use of bribes to secure the loyalty of Maduro’s key supporters – the military brass – it must be expected that a decent proportion of those billion dollars would be siphoned off for personal gain. Another portion might pay for Maduro’s armed gangs.

It is Maduro who wields the majority of the power on the ground in Venezuela. He exercises many of the roles you would expect of a president. But he holds his position illegally, and with a flagrant disregard for human rights and the rule of law.

This is not to say the reserves should be transferred to Guaidó. His two-year term as interim president ends in December, and what will happen afterwards is unclear. What is clear is that the High Court should only make the reserves accessible upon the return of free and fair elections.

The gold in the Bank of England vault belongs to the people of Venezuela. Should the High Court rule in Maduro’s favour, Britain would be complicit in giving $1bn of the republic’s money to a particularly repressive private citizen.