The Venezuelan government has launched a lawsuit against the Bank of England to force it to return ڈالر 820 million worth of gold. The gold was seized following economic sanctions imposed on Venezuela by the United States and Britain.
Officials in Venezuela say they want to sell some of the gold in the Bank of England and use it in an effort to fight the corona virus.
Venezuela says it is ready to send the proceeds from the sale of gold directly to the United Nations to ensure that the money is not used for any other purpose.
What is Venezuela proposing?
Venezuela says the money should be transferred to the United Nations Development Program (UNDP) to buy medical equipment needed to deal with Code 19.
The legal tug-of-war began when Venezuela’s public health system was disrupted and doubts were raised about its ability to deal with the global epidemic.
The Venezuelan central bank has requested that the money be transferred on an emergency basis, according to documents from the case, which was set up in London on May 14.
“When people’s lives are at stake, this is not the time for politics,” said Soroush Zaivala, a lawyer for Venezuela’s central bank.
The United Nations has said in a statement to the BBC that the Venezuelan government has approached the United Nations to consider such a procedure.
The Bank of England was contacted by Reuters but declined to comment.
How is Venezuelan gold in the UK?
The Bank of England is the world’s second largest gold reserve bank. About four lakh gold bricks have been placed here. The Federal Bank of New York is the only bank to have more gold bricks.
Its safe vaults for gold are the largest, and it is proud of the fact that in its 320-year history, there has been no theft.
Many of the world’s central banks deposit their gold here for safekeeping, and Venezuela is one of them.
Why does Venezuela need gold now?
Despite its oil wealth, Venezuela’s economy has been in turmoil for years. Corruption, poor government performance and economic sanctions have exacerbated the situation.
Venezuela produces very little other than oil and is heavily dependent on imports, which requires foreign exchange. Venezuela’s foreign exchange reserves are dwindling sharply due to a sharp drop in oil production.
President Nicolas Maduro’s government has already begun selling the country’s gold to its allies Turkey, Russia and the United Arab Emirates.
But the United States does not recognize Maduro’s government and last year warned banks, investors, traders and facilitators not to trade gold, oil or anything else with the Maduro government because it is Venezuela. Is the trust of the people.
The Venezuelan government has reportedly continued to sell gold to Iran, but according to Venezuela’s central bank, its foreign exchange reserves fell earlier this year to a 30-year low.
He desperately needs foreign exchange and finds it an easy solution to make money by selling his gold deposited in the Bank of England.
What is the position of the Bank of England in this regard?
Venezuela first approached the Bank of England in 2018. Venezuelan Finance Minister Simon Zerpa and Central Bank President Clisto Ortega arrived in London to demand Venezuelan gold.
In January 2019, the Bank of England rejected this demand. The Bank of England said only that it did not comment on its relationship with its account holders.
The decision comes just days after Maduro’s political rival, Eun Guido, claimed the presidency. Yun Guido alleges rigging in the 2018 presidential election.
Eun Guido’s government was immediately recognized by 50 countries, including the United States and the United Kingdom, who asked the Bank of England not to return Venezuela’s gold, accusing it of falling into the hands of corrupt people. ۔
Alan Duncan, the US Secretary of State for the United Kingdom, said the issue was between Venezuela and the Bank of England. At the same time, he said that from the time the Bank of England decides on this, it will keep in mind that many countries do not recognize Maduro’s government and recognize Eun Guido as the head of state.
Meanwhile, US officials, for whom Maduro is like a thorn in the side, were trying to persuade British officials not to give Venezuela’s foreign assets to the Maduro government.
The Bank of England has never said more than that it would not comment on the relationship with its account holders, but it is believed that economic sanctions and money laundering regulations on Venezuela may have influenced its decision. ۔
Venezuela’s proposal to transfer the money to the United Nations is an attempt to circumvent those rules.
