Value of Venezuelan gold withheld by Bank of England likely double amount reported

On 2 July, the BBC reported that the UK High Court had ruled against the Venezuelan government’s request for access “to $1bn (£820m) of gold stored in the Bank of England”. CNN similarly reported that the Venezuelan government had lost access to “$1 billion in gold”.

The Venezuelan government of Nicolás Maduro requested access to the gold in order to fund its response to the coronavirus (Covid-19) pandemic. It now appears likely, however, that the real value of Venezuelan gold held in the Bank of England is over $2bn.

More than $2bn

In August, Reuters reported that the Bank of England currently holds “33 tonnes of [Venezuelan] gold”. The current price of gold is just under $2,000 per ounce. Based on these figures, the value of Venezuelan gold held by the Bank of England amounts to over $2bn. (Using US tons, and taking the value of gold at the time of the court ruling, the value would remain roughly $2bn).

In an interview published in August, Venezuelan opposition figure Juan Guaidó’s representative to the UK Vanessa Neumann also claimed that the real value of the gold held in the Bank of England is over $2bn.

In the interview, Neumann boasted that the amount of Venezuelan gold bullion stored in the Bank of England is “more than 31 tonnes”. This would be worth something like “$2.2bn at the moment”, she said.

During the interview, Neumann also joked that she has “more back-channels into the British government than Gaza has tunnels”.

To put this number into perspective, the Centre for Economic and Policy Research (CEPR) revealed in 2019 that “Imports of food and medicine [to Venezuela] in 2018 were just $2.6 billion. Total imports of goods for 2018 were about $10 billion”.

The British state thus appears to have dispossessed the Venezuelan government of almost its entire budget for food and medical imports. This would be the largest seizure of Venezuelan assets in gold since Portuguese bank Novo Banco’s refusal to transfer $1.7bn in 2019.

As the British state restricts Venezuela’s ability to respond to the coronavirus crisis, foreign secretary Dominic Raab recently announced without irony that the UK would “lead global action to ensure [the] world’s poorest are protected from [the] ravages of coronavirus and famine”.

Political decision

In his recent book, former US National Security Adviser John Bolton claimed that former UK foreign secretary Jeremy Hunt was “delighted” to freeze Venezuelan gold in support of US destabilisation efforts. This reveals an explicit political nature to the current proceedings.

Indeed, the British government’s decision to restrict access to Venezuela’s gold is totally inconsistent with the statements of David Cameron’s former Conservative government.

After a military coup in Egypt in 2013, an official spokesperson for Cameron said: “We recognise states not governments. We will be working with the Egyptian authorities. A strong, stable and democratic Egypt is very important to our interests”. Shortly after, the Egyptian military regime murdered at least 817 protesters in Cairo.

The British government seemingly decided to recognise an illegitimate de facto government in Egypt, while it now refuses to recognise the de facto government of Venezuela.  It seems clear that the British government decides who to recognise based on what coincides with its own interests.

As historian and editor of Declassified UK Mark Curtis wrote in 2018 about Egyptian general Abdel Fattah el-Sisi:

Britain’s policy towards Egypt in the past five years has been remarkable, confirming that Whitehall not only turns a blind eye to, but often has a preference for, repressive systems that help advance its commercial interests

Corruption

Neumann also revealed that Guaidó’s parallel government will acquire “legal custody over that gold” held in the Bank of England. This is concerning given a spate of scandals surrounding Guaidó and his associates.

In June 2019, the Miami-based PanAm Post revealed that funds raised by Guaidó were used in a massive fraud and embezzlement scheme. One year later, the Grayzone reported that “Trump used looted Venezuelan public money to build border wall with Mexico”.

If Guaidó gains access to the Venezuelan wealth stored in the Bank of England, the funds could similarly be used for embezzlement, association with Colombian narco-paramilitaries, or continued violent regime change attempts.

Appeal

The Venezuelan government will launch an appeal against the UK High Court’s decision later this year.

In the slow asphyxiation of Venezuelan society, Britain remains among those countries applying the most pressure.

Responding to a request for comment, the Bank of England stated: “The Bank of England does not comment on individual customer relationships”.

Featured image via screengrab/RT UK