Venezuela’s $4 billion gold heading to US

Financial Times has reported quoting four people involved in the discussions that the Venezuelan government and opposition have almost finalized an agreement on transferring nearly $4 billion worth of gold reserves of the country’s central bank from the Bank of England to the Federal Reserve Bank in New York.

Under the terms of the deal under discussion, Delcy Rodriguez, head of Venezuela’s interim government, will get legal control over the gold. However, the government will not be able to sell the gold immediately.

Instead, the gold reserves may be used as collateral to take loans. The funds could be used to meet government expenses as well as for reconstruction work after the devastating twin earthquakes in June.

This agreement could be one of the first concrete outcomes of the ongoing talks between the Venezuelan government and opposition under the patronage of the United States. If the deal is finalized, it is expected to end the seven-year dispute over the gold.

The dispute began in 2019 after the United States, the United Kingdom and several other countries recognized then National Assembly president and opposition leader Juan Guaido as the legitimate president of Venezuela. The opposition then claimed control over the Venezuelan central bank’s gold stored in the Bank of England vault. The legal battle eventually reached the UK Supreme Court.

However, the sources have said the agreement has not yet been finalized. Some more time may be needed to settle various technical issues.

An opposition leader involved in the talks said, “The gold will go to the United States, but Delcy will not get direct control over it. It will remain under supervision and restrictions.”

The Venezuelan government and opposition had said last month that they were working together to open the way for using nearly 31 tonnes of gold reserves kept in the Bank of England vault. However, the opposition, which has long accused the socialist government of corruption and economic mismanagement, has demanded strict controls to prevent misuse of the gold reserves.

Meanwhile, amid the discussions on the gold transfer, the United Kingdom and Venezuela have agreed this week to further strengthen diplomatic relations. The United Kingdom will reappoint an ambassador to Caracas. The British government has also welcomed the ongoing talks on holding new elections in Venezuela.

Jorge Rodriguez, current president of Venezuela’s National Assembly, met the UK government in London earlier this week. After the meeting he commented on social media that “good news” is coming for the people of Venezuela.

A spokesperson for the Bank of England has said the bank is not in a position to implement any instruction until a new order is received from the UK court. The concerned parties will have to go to the UK court to resolve the dispute and clarify who has legal authority over the gold account.