Tussle over Venezuelan gold in Bank of England grows more tense after court ruling

UK appeal judges set aside decision granting control of bullion to opposition leader, who claims president’s election win was rigged

Juan Guaido denies Mr Maduro's claim the money would reach patients fighting coronavirus in hospitals (Getty Images)

A British court has thrown into question who controls nearly $2bn (£1.54bn) in Venezuelan gold stowed in a London bank vault amid a power struggle between President Nicolas Maduro and his leading rival.

The appeals court set aside a British judge's earlier decision granting control of the bullion to US-backed opposition leader Juan Guaido. The judges have ordered a deeper investigation before either side is given access to the gold in the Bank of England.

Britain recognises Mr Guaido as Venezuela's legitimate leader, while also holding diplomatic ties with Mr Maduro. 

Mr Maduro's government has demanded the gold, saying it will transfer some proceeds from its sale to the United Nations’ development programme for supplies to battle the coronavirus pandemic.

But the Bank had refused to hand it over to his government, and a judge in July sided with Mr Guaido, who says the government is illegitimate and corrupt. Opposition leaders say the money would never reach patients fighting for life in Venezuela's broken hospitals.

The gold was reportedly removed from the Venezuelan central bank’s vaults by government officials last year, as Mr Maduro sought to raise capital amid tightening sanctions.

Sarosh Zaiwalla, a lawyer who represents Venezuela's Central Bank controlled by Mr Maduro, praised the appeal court decision.

The dispute hinges on the British stance toward Venezuela, a country in economic and political crisis.

The UK, the US and dozens of other countries recognise the claim to the Venezuelan presidency of Mr Guaido, who heads the congress. He proclaimed himself the interim president last year, months after Mr Maduro declared victory in an election that his critics say was rigged.

Mr Maduro, however, maintains the support of Russia, China, Iran, Turkey and Cuba, as well as the Venezuelan military.

Despite its support for Mr Guaido, the British government has not granted diplomatic credentials to Vanessa Neumann, the envoy that he says is ambassador to the UK.

Mr Maduro's ambassador is recognised by the British government and has control of the Venezuelan embassy in London, while the British ambassador remains in Caracas.

Ms Neumann played down the setback, saying the appeals court asked for clarification from the judge who had previously ruled in Mr Guaido's favour.

"What remains clear is that the British court is not yet going to hand over the gold that belongs to Venezuelans to the Maduro regime," she said.

Enthusiasm has been fading at home in Venezuela for Mr Guaido. He has been unable to budge Mr Maduro from power despite pressure that has included stiff US sanctions against Venezuela.

Additional reporting by agencies