‘Boligarchs’ will steal Venezuela’s gold if it is returned, warn MPS
THE UK is in danger of helping Venezuelan oligarchs “line their own pockets” as the Bank of England may be forced to return 14 tons of gold to Caracas, MPS warned. Last night both Conservative and Labour MPS expressed concerns that returning the gold would help prop up President Nicolás Maduro’s regime, despite widespread condemnation of its human rights abuses.
The Venezuelan government is seeking to repatriate gold bars worth $550million (£422m), as it fears a further crackdown on its international transactions following US sanctions last week.
A weak bolívar and severely depleted stocks of foreign hard currency have left the socialist government with a cash crisis.
Graham Jones, the Labour MP who chairs the all-party parliamentary group on Venezuela, said: “I think the Government has to make every effort to ensure this gold doesn’t find its way into the private bank accounts of senior figures in the Maduro government who are stealing from the nation and accumulating huge personal wealth. While the ‘Boligarchs’ line their own pockets, over a million Venezuelan children have fled the country, many of whom are malnourished and living rough on the streets of Colombia and Peru.”
Bob Seely, the Tory MP who sits on the foreign affairs committee, said: “We should not be supporting the Venezuelan government if they’re trying to get around sanctions.
“We should instead be waiting to help an incoming government when it actually
wants to sort out the country’s problems.”
President Maduro’s government has faced international criticism over a violent crackdown on opposition and its handling of the economy.
The new US executive order threatens to block the property or business interests of anyone who has “any transactions... involving deceptive practices or corruption and the Government of Venezuela”.
It points to any dealings with the country’s gold sector in particular.
In contrast, European Union sanctions only target specific Venezuelan individuals, potentially leaving Caracas able to transfer its gold out of the bloc unless it follows suit on the US measures.
Venezuela recently successfully diverted its gold exports from Switzerland to Turkey. It is thought that if the gold held in the Bank of England were released it would also be sold to a third country.
Roger Matthews, international trade lawyer at Dechert LLP, said: “The EU sanctions on Venezuela are much narrower than those of the US; they are limited to prohibiting dealings with certain named individuals.
“Assuming those individuals aren’t associated with the Venezuelan request to the Bank of England, it doesn’t appear that EU sanctions on Venezuela could offer the Bank with grounds for refusing.”
The Foreign Office, the Treasury and the Bank of England all refused to confirm whether or not the gold would be released to the regime.
The Bank of England’s code of conduct states that it is “committed to high standards of financial crime prevention and must comply with financial sanctions legislation”.
One Venezuelan official told Reuters that the Bank of England had sought to clarify what the gold would be used for.
The move comes after the Maduro regime attempted to offer a gold- backed savings scheme under which citizens were sold certificates of ownership for gold ingots.
The Venezuelan government has also been buying up stocks of gold mined from its southern jungle region in order to boost its central bank’s reserves.
Venezuela is home to the world’s largest oil reserves but severe economic mismanagement by the socialist government has left it in its fifth year of recession.
The bolívar is now set to reach an inflation rate of more than one million per cent by the end of the year, according to the International Monetary Fund.
The high cost of imports means basic goods as well as medicines are unaffordable for ordinary people, causing an exodus of two million people that has triggered refugee crises in neighbouring countries.
Dany Bahar, a Venezuelan economist at the Brookings Institution said: “They [the regime] are trying to find oxygen to stay in power. If they really wanted to fix the situation they would allow in humanitarian aid.”