(More Bank) – The Venezuelan regime under siege by Nicolas Maduro, desperate to keep cash abroad, has been blocked in his bid to withdraw $ 1.2 billion in gold from the Bank of England , according to people close to the file.
The Bank of England's decision to reject the Maduro officials' withdrawal request comes after senior US officials, including State Secretary Michael Pompeo and National Security Adviser John Bolton, have lobbied their British counterparts to help them cut the regime of its overseas holdings, people who asked not to be identified.
The United Kingdom followed on Wednesday the United States and other countries in recognizing Juan Guaido, president of the National Assembly, as the legitimate president of Venezuela. Maduro, an authoritarian leader who oversaw the collapse of the country in economic chaos, however, refuses to give up power and enjoys the support of the military. According to a draft statement seen by More Bank, the European Union has threatened to recognize Guaido unless a "credible" presidential election is convened in eight days.
US authorities are trying to transfer Venezuela's resources abroad to Guaido to help boost its chances of effectively taking control of the government. The $ 1.2 billion in gold represents a significant portion of the $ 8 billion in foreign exchange reserves held by the Venezuelan central bank. We do not know where the rest of them are. Turkey, however, has recently emerged as a destination for freshly mined gold from Venezuela.
The United States is leading an international effort to persuade Turkey – a key Maduro donor, alongside Russia and China – to stop being a means of transport for these gold shipments. Europe's changing position clarifies the international battlegrounds over Venezuela and more closely aligns key powers such as Germany, France and Spain with the Trump administration.
"We want democracy and free elections in Venezuela," Spanish Prime Minister Pedro Sanchez said on Saturday. "I want to make it clear that if in Venezuela, fair, free and transparent elections are not convened, Spain will recognize Juan Guaido as president."
Collecting gold at the Bank of England has been a major priority of the Maduro regime for weeks. In mid-December, Calixto Ortega, president of Venezuela's central bank, led a delegation to London seeking access, according to two people familiar with the case.
But these talks were unsuccessful and communications between the two parties have been interrupted since. Officials at the Caracas central bank have been ordered not to attempt to contact the Bank of England. These central bankers learned that Bank of England staff members would not respond to their requests, citing reasons of compliance, said a Venezuelan official, who asked not to be identified.
Inheritance of gold
The Bank of England declined to comment on its management of Venezuelan assets, claiming that it "provides banking services – including gold conservation services – to a large number of clients" and "Do not comment on any of these relationships".
Asked Friday on the fate of Venezuelan assets abroad, Pompeo declined to comment, just like a spokesman for the National Security Council. The Treasury issued a statement stating that the United States "will use its economic and diplomatic tools to ensure that the Venezuelan government's commercial transactions, including those involving its state-owned enterprises and international reserves, are compatible with "his recognition of Juan Guaido acting president of Venezuela.
A Maduro press officer declined to comment.
For years, gold has been an essential part of Venezuela's foreign exchange reserves. Hugo Chávez, Maduro's late socialist leader and mentor, spent much of the country's oil wealth on gold, in part because of his disdain for the US dollar. In 2011, Chavez ordered the repatriation of 11 billion dollars worth of gold bullion from the Bank of England and other foreign institutions. As Venezuela sank more and more into the economic crisis years later, the Maduro regime began selling them for the money it desperately needed to finance imports and to attempt , without success, to avoid defaulting on its external debt.
"The first rule on the agenda is to prevent the Maduro government from liquidating the country's international assets and stealing them," said Ricardo Hausmann, professor of economics at Harvard and critic of long date Maduro, who spoke with Guaido, interview Friday.
The story continues
(Updates with the call of the EU for free elections in the third paragraph, the comment of the Spanish Prime Minister in the sixth.)
– With the help of Eric Martin, Alex Vasquez, Fabiola Zerpa, Nick Wadhams, Jill Ward, Nikos Chrysoloras and Charles Penty.
To contact the reporters on this story: Patricia Laya in Caracas at playa2@More Bank.net, Ethan Bronner in New York at ebronner@More Bank.net, Tim Ross in London at tross54@More Bank.net
To contact the editors in charge of this story: David Papadopoulos at papadopoulos@More Bank.net, Daniel Cancel at dcancel@More Bank.net, Tony Czuczka, Steve Geimann
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