Post by anenro on Jun 2, 2020 19:28:49 GMT 4
The great chaos of Venezuelan gold
Going to the Commercial and Property Courts of the United Kingdom has been the latest strategy of the Nicolás Maduro regime, in serious economic difficulties, to recover 31 tons of gold bars from the coffers of the Central Bank of Venezuela, which has protected the Bank of England. The move has taken an unexpected turn this week amid the prolonged institutional crisis, of recognition and duplication of institutions, that the South American country is experiencing. The Caracas government hired the law firm of British lawyer Sarosh Zaiwalla to represent Venezuela before a London court. The Chavista apparatus requested the transfer to the United Nations Development Program (UNDP) of 930 million euros, equivalent to the Venezuelan gold reserves in the Bank of England, to attend the coronavirus pandemic in the country. On Thursday, however, the court rejected the petition and brought a new trial to determine first what the country’s legitimate authority is. In other words, he will have to decide between Maduro and the opposition leader, Juan Guaidó, still recognized today as interim president by more than 50 countries.
“The Bank of England has a moral obligation to allow Venezuela to sell gold so that UNDP can effectively help the Venezuelan people in the fight against covid-19,” said Zaiwalla, although the government has officially claimed to have flattened the curve. of contagions and prepares to start the de-escalation from next Monday. For decades, Venezuela stored part of its gold reserves in the vaults of foreign financial institutions, including the Bank of England, which provides gold custody services to developing countries. But at the end of 2018 the Maduro Government began to have problems to mobilize those resources, when it tried to repatriate half of the ingots. Maduro’s crisis of legitimacy due to the contested elections of May 20, 2018 was beginning to surround him. US sanctions against Maduro himself and other officials, in some cases for allegations of links to money laundering, corruption and drug trafficking schemes, and as of 2018 the European ones, have also kept the bank alarms on.
Months after attempts were made to repatriate the bullion, Guaidó directly asked then-Prime Minister Theresa May not to return the gold to the Maduro regime. The gesture was supported by British MPs and this year the current Prime Minister, Boris Johnson, warmly supported the tour of the opposition leader in Europe. In addition to the political request, Guaidó appointed a parallel board for the Central Bank of Venezuela in July 2019, as he had already done with the oil company PDVSA and its subsidiary Citgo to control the country’s most important assets, while pushing a government exit from Mature.
Reuters reported that lawyers for Zaiwalla & Co called the court’s decision “a fair and good result.” The special attorney appointed by Guaidó, José Ignacio Hernández, maintains that in the trial that will begin in June, other decisions may be made, “but not what Maduro asked for.” In a statement, he added that the court accepted the arguments of the opposition board of the BCV and that settling the conflict of authority will also allow them to “resolve another case in the same court, in which the Maduro regime intends to appropriate 120 million dollars derived from the termination of a contract swap [permuta] of gold”.
The knot of this institutional conflict is in the evasion of parliamentary controls to the Executive on the budget, the movement of assets abroad, the signing of contracts, credits and international agreements. This is what also makes it inappropriate at the constitutional level to use those resources that the Maduro Government claims to have agreed to deliver to UNDP, without the National Assembly, chaired by Guaidó, approving it. The same requirement has also made the granting of multilateral financing unfeasible, the most recent case being the rejection by the International Monetary Fund (IMF) of a request for help from Maduro for $ 5 billion.
For the past five years, when the opposition won the elections to the National Assembly and Chavismo lost the political control that it had maintained in this instance for 17 years, Maduro has sought alternative ways to overcome this enormous political obstacle. It has done so through the judicial blockades of the Supreme Court and the persecution of members of Parliament, the creation of a parallel one in the figure of the National Constituent Assembly and now with lawsuits in foreign courts. For this reason, the renewal of Parliament scheduled for this year has become Chavismo’s main objective.
Maduro faces the seventh year in an economic recession, amid the global drop in oil prices and reduced production due to the collapse of his main industry, PDVSA. The regime has had to use international reserves to sustain itself, to the point of bringing them to their lowest level in three decades this year.
The gold that has been mined since 2016 without greater transparency controls in the Orinoco Mining Arc, and also the ingots that the BCV protects at its headquarters in Caracas, have been used by Maduro to resist in the narrow margin given by economic sanctions. In a report by the World Gold Council, it is stated that the BCV was the banking institution that sold the most monetary gold in the world during 2017 and 2018. A year ago, 3.6 tons of ingots with BCV labels dated in the decade of the the 40s of the last century were held in Uganda. According to the police of that country, the lot belonged to a larger shipment made from Venezuela and which had landed in the African country to be processed at the African Gold Refinery Limited refinery and later shipped to Turkey, one of Maduro’s business allies.
Going to the Commercial and Property Courts of the United Kingdom has been the latest strategy of the Nicolás Maduro regime, in serious economic difficulties, to recover 31 tons of gold bars from the coffers of the Central Bank of Venezuela, which has protected the Bank of England. The move has taken an unexpected turn this week amid the prolonged institutional crisis, of recognition and duplication of institutions, that the South American country is experiencing. The Caracas government hired the law firm of British lawyer Sarosh Zaiwalla to represent Venezuela before a London court. The Chavista apparatus requested the transfer to the United Nations Development Program (UNDP) of 930 million euros, equivalent to the Venezuelan gold reserves in the Bank of England, to attend the coronavirus pandemic in the country. On Thursday, however, the court rejected the petition and brought a new trial to determine first what the country’s legitimate authority is. In other words, he will have to decide between Maduro and the opposition leader, Juan Guaidó, still recognized today as interim president by more than 50 countries.
“The Bank of England has a moral obligation to allow Venezuela to sell gold so that UNDP can effectively help the Venezuelan people in the fight against covid-19,” said Zaiwalla, although the government has officially claimed to have flattened the curve. of contagions and prepares to start the de-escalation from next Monday. For decades, Venezuela stored part of its gold reserves in the vaults of foreign financial institutions, including the Bank of England, which provides gold custody services to developing countries. But at the end of 2018 the Maduro Government began to have problems to mobilize those resources, when it tried to repatriate half of the ingots. Maduro’s crisis of legitimacy due to the contested elections of May 20, 2018 was beginning to surround him. US sanctions against Maduro himself and other officials, in some cases for allegations of links to money laundering, corruption and drug trafficking schemes, and as of 2018 the European ones, have also kept the bank alarms on.
Months after attempts were made to repatriate the bullion, Guaidó directly asked then-Prime Minister Theresa May not to return the gold to the Maduro regime. The gesture was supported by British MPs and this year the current Prime Minister, Boris Johnson, warmly supported the tour of the opposition leader in Europe. In addition to the political request, Guaidó appointed a parallel board for the Central Bank of Venezuela in July 2019, as he had already done with the oil company PDVSA and its subsidiary Citgo to control the country’s most important assets, while pushing a government exit from Mature.
Reuters reported that lawyers for Zaiwalla & Co called the court’s decision “a fair and good result.” The special attorney appointed by Guaidó, José Ignacio Hernández, maintains that in the trial that will begin in June, other decisions may be made, “but not what Maduro asked for.” In a statement, he added that the court accepted the arguments of the opposition board of the BCV and that settling the conflict of authority will also allow them to “resolve another case in the same court, in which the Maduro regime intends to appropriate 120 million dollars derived from the termination of a contract swap [permuta] of gold”.
The knot of this institutional conflict is in the evasion of parliamentary controls to the Executive on the budget, the movement of assets abroad, the signing of contracts, credits and international agreements. This is what also makes it inappropriate at the constitutional level to use those resources that the Maduro Government claims to have agreed to deliver to UNDP, without the National Assembly, chaired by Guaidó, approving it. The same requirement has also made the granting of multilateral financing unfeasible, the most recent case being the rejection by the International Monetary Fund (IMF) of a request for help from Maduro for $ 5 billion.
For the past five years, when the opposition won the elections to the National Assembly and Chavismo lost the political control that it had maintained in this instance for 17 years, Maduro has sought alternative ways to overcome this enormous political obstacle. It has done so through the judicial blockades of the Supreme Court and the persecution of members of Parliament, the creation of a parallel one in the figure of the National Constituent Assembly and now with lawsuits in foreign courts. For this reason, the renewal of Parliament scheduled for this year has become Chavismo’s main objective.
Maduro faces the seventh year in an economic recession, amid the global drop in oil prices and reduced production due to the collapse of his main industry, PDVSA. The regime has had to use international reserves to sustain itself, to the point of bringing them to their lowest level in three decades this year.
The gold that has been mined since 2016 without greater transparency controls in the Orinoco Mining Arc, and also the ingots that the BCV protects at its headquarters in Caracas, have been used by Maduro to resist in the narrow margin given by economic sanctions. In a report by the World Gold Council, it is stated that the BCV was the banking institution that sold the most monetary gold in the world during 2017 and 2018. A year ago, 3.6 tons of ingots with BCV labels dated in the decade of the the 40s of the last century were held in Uganda. According to the police of that country, the lot belonged to a larger shipment made from Venezuela and which had landed in the African country to be processed at the African Gold Refinery Limited refinery and later shipped to Turkey, one of Maduro’s business allies.