Bank of England Denies Venezuela Access to Gold Reserves to Fight Covid-19 Pandemic

RIO DE JANEIRO, BRAZIL – The Central Bank of Venezuela (BCV) has filed a lawsuit against the Bank of England (BoE) to force the sale of gold reserves worth approximately US$1.3 billion, to be used to curb the coronavirus pandemic.

In April, the BCV requested that the sale proceeds be transferred to the United Nations Development Programme (UNDP) to be administered by the UN and used to purchase supplies such as medical equipment to fight the coronavirus.

However, according to the law firm Zaiwalla & Co, representing the BCV in the case, the Bank of England rejects this demand as it “does not recognize the authority of the BCV’s current management and the Venezuelan government”. The UK is one of around 50 countries that deny the legitimacy of incumbent President Nicolás Maduro and instead deem the self-proclaimed interim president Juan Guaidó as its legitimate representative.

The BCV and the BoE have been in dispute over Venezuela’s gold reserves since 2018. The BoE rejected the requested repatriation of the gold at the time without providing reasons. The US sanctions imposed in 2017 against trading in Venezuelan gold are presumed to be the reason. However, in the current context of the Coronavirus crisis, which is placing Venezuela in a difficult situation in addition to the ongoing economic crisis, BCV attorney Sarosh Zaiwalla considers this “a moral obligation of the Bank of England”.

According to data from John Hopkins University, Venezuela currently records 1,121 coronavirus infections and ten deaths, which is relatively low compared to other countries in the region. However, infection rates have continued to rise in recent days and the general supply situation remains strained, which places Venezuela at great risk from the global pandemic.