The regime of Nicolás Maduro once again lost part of the assets that Venezuela once had abroad; this time it is 20 tons of gold for not paying one of its debts overseas. Between non-payment, smuggling and theft of tons, the South American country is left without reserves.
The German bank, Deutsche Bank, seized 20 tons of Venezuelan gold owing to the non-payment of the debt that Maduro contracted with this institution in 2016.
Venezuela recibió en 2016 un préstamo de Deutsche Bank y dio 20 toneladas de oro en garantía. Por no pagar los intereses el Banco puede ejecutar la garantía ($ 750 millones). Guaidó pide al Banco depositar la diferencia ($ 120 millones) una cuenta fuera del alcance del régimen
— Jose Toro Hardy (@josetorohardy) June 5, 2019
Venezuela received a cash loan from the German bank and used the gold as collateral. The contract is due in the year 2021. However, the Venezuelan government faltered on the interest payments, and the bank seized the guarantee. The critical unanswered question is how Maduro spent the loan money.
As 20 tons of gold has been seized, there is a difference in the value of 120 million dollars in favor of Venezuela. The legitimate Attorney General of Venezuela, José Ignacio Hernández, confirmed that they were in conversation with the bank to direct these funds to an account which is outside the reach of the regime.
It is important to remember that in 2017, the National Assembly which has an opposition majority sent an official letter to the board of Deutsche Bank to warn them that their transaction with Nicolás Maduro was illegal and ethically reprehensible; two years later the money has been effectively lost and so are the tons of gold.
Economist Henkel Garcia told PanAm Post that Venezuela has no means of generating confidence in external actors and faces grave difficulties in fulfilling its foreign currency commitments.
“It is difficult to know what happened to this money. A large part of it probably ended in the hands of those who hold positions of power. But we cannot know for sure,” Garcia explained.
“As Venezuela runs out of gold, it runs out of international reserves, the consequences of which are that imports would become even more complicated, and very few suppliers would want to conduct business with the country,” he said.
It is not the first time the dictatorship of Nicolás Maduro has lost tons of gold due to the non-payment of foreign debts.
In October 2018, it was revealed that the Venezuelan dictator oversaw an exchange operation that left the same German Deutsche Bank with 45 tons of gold or a quarter of the total gold that Venezuela has abroad.
According to economist Daniel Lahoud, Venezuela has between 110 and 120 tons left, which is worth about 6500 million USD.
“They knew very well that this money was not going to be paid. Most likely, the gold that is left will be squandered in the same way. It’s unfortunate,” Lahoud told the PanAm Post.
Gold reserves disappear through illegal transactions
Venezuela has lost at least 764 tons of gold in the hands of the regimes of Hugo Chávez and Nicolás Maduro. The majority of the reserves disappeared through illegal transactions.
In April, economist and Member of Parliament, José Guerra, wrote on Twitter, “when Chávez ordered the repatriation of the gold in 2012, 850 tons were brought in. Today there are only 86 tons left. Those are the ones they are taking out.”
Besides the gold that international authorities have already confiscated due to unpaid debts, there is a large quantity of gold that the regime is illegally removing from the vaults of the Central Bank of Venezuela.
According to the economist, only 86 tons of gold is left in the vaults. The rest has been robbed, embezzled, traded, or exchanged for cash to sustain the dictatorship.
The Maduro regime has dedicated the last few months to loot the Central Bank of Venezuela, extracting tons of gold, and selling it abroad to obtain money to stay in power.
At the beginning of April, the dictatorship removed eight tons of gold worth 335 million USD. In February, it extracted a similar amount.
The gold ingots are sold “under the table” without approval from the legitimate National Assembly of Venezuela. It is one of the few different ways the dictatorship has to obtain cash, maintain its power, and pay a part of its internal and foreign debts.
In the absence of foreign currency, illegal mining persists
There is a shortage of oil production in Venezuela, coupled with growing sanctions. The Maduro regime has found a new way to finance itself by exporting gold illegally.
The US Treasury Department warned that Venezuela is resorting to gold trade without “environmental control and accountability” to finance its networks of corruption that sustain the dictatorship.
Assistant Treasury Secretary Marshall Billingslea condemned the plundering of gold mines in southern Venezuela and said it is “approaching a situation similar to that of blood diamonds” in Africa.
According to him, 21 metric tons of gold worth 840 million USD have left Venezuela in recent months. Most of the gold has been sent to Turkey.
In reality, it is impossible to calculate the quantity of gold in the Venezuelan Arch Mines. According to estimates, there is 8000 tons of gold worth 243 million euros. Additionally, there are reserves of coltan, bauxite, copper, and diamond in these mines.
The Times published a report revealing a series of mysteries flights out of Caracas inciting suspicions that Maduro is discretely extracting tons of gold from Venezuela and selling it to traders in Africa and the Middle East.
On 1st March, a Boeing 777 aircraft that belonged to the Russian airline Nordwind and supposedly had no passengers on board was tracked flying from Caracas to Kampala, the capital of Uganda. It stopped there for a few hours before continuing to Zanzibar and returned once again to the Venezuelan capital.
The same aircraft was seen at the end of January at the Maiquetía Simon Bolivar international airport that operates near the Venezuelan capital. It was apparently preparing to fly to the United Arab Emirates with a cargo of 20 tons of gold, valued at 650 million euros.