The Bank of England (BoE) has refused to send USD $ 550 million in gold bars to the Nicolás Maduro regime in order to prevent money laundering.
According to the British newspaper The Times, the Maduro regime is trying to repatriate at least 14 tons of gold that the BoE has in stock. However, the financial entity will not release them until the use of that gold is clarified.
According to the media, there is concern that the Chavista dictatorship may seize the gold, which is owned by the state, and sell it for personal benefit.
Venezuelan gold stored in the Bank of England was used as collateral until last year, backing international loans.
Recently the United States government announced new sanctions against the Venezuelan dictatorship after the illicit exports of gold with which it has been enriched and kept in power.
The United States has denounced that the sale of gold has become a way for Venezuela to evade US sanctions. “The United States has identified gold as primary means which the Venezuelan government has used to carry out illicit transactions…through this looting not only are they robbing the wealth of their own people, but it is also something that has had serious environmental consequences, evidenced by the rising mercury levels in rivers,” explained National Security Adviser John Bolton.
Currently, it is almost impossible to calculate the amount of gold existing in Venezuela: it is believed that there could be some 8,000 tons, which would be equivalent to 243 billion euros. This does not even take into consideration the lucrative reserves of coltan, bauxite, copper and diamond that are believed to be in the country.
After international sanctions and a shortage of foreign currency from oil sales, the Maduro regime has shifted its focus to gold. This is a change in policy for the Maduro regime which has largely permitted the illicit control of gold-mining by guerrilla groups such as the ELN, a group that has become a kind of “armed arm” of the dictatorship that controls the mining in the gold-rich state of Bolivar.
Venezuela is rapidly losing its gold reserves
In October the Maduro regime lost around 90 tons of gold for not paying debts that it has abroad.
The Venezuelan dictatorship was involved in a swap, in which the German bank Deutsche Bank retained ownership of the gold it had held as collateral. The transaction was agreed upon in 2016 for USD $1.7 billion, and the dictatorship ultimately defaulted on the deal.
“They knew very well that this money was not going to be paid back. Most likely, the gold that is held overseas will be lost for the Venezuelan state treasury in the same way. It’s unfortunate,” said economist Daniel Lahoud in an interview with the PanAm Post.
Illegal mining keeps Maduro in power
In the absence of oil production in Venezuela, the Maduro regime appears to have found another way to “self-finance” in order to stay in power: exporting gold illegally to Turkey.
The US Treasury Department warned that Venezuela is increasingly using the gold trade “without environmental or accounting control” to finance the corruption networks that support the dictatorship.
Marshall Billingslea, assistant secretary of the US Treasury, said that after the abandonment of the state oil company PDVSA, the Maduro regime diverted its attention to the exploitation of gold to stay afloat financially. He also denounced the plundering of gold mines in southern Venezuela and said that the current state of affairs is “approaching a situation similar to that of blood diamonds” in Africa.
According to the official, in recent months it is estimated that “21 metric tons of gold” have been mined in Venezuela, which have gone “mainly to Turkey”; this would be equivalent to USD $840 million.
The gold “is being taken out of the country without any accounting to know where the funds go,” he said.
The representative of the Department of the Treasury denounced that this uncontrolled exploitation of gold will also become a problem for the region:
It is not conventional mining, this is destroying the forests and creating huge amounts of stagnant water that is contaminated with mercury and other chemicals. It will be an environmental catastrophe for decades, with outbreaks of malaria and dengue; and these diseases are going to move around the region with the outflow of millions of refugees.