The U.K. Supreme Court is expected to soon rule on the Bank of England’s right to withhold nearly $2 billion of gold from Venezuelan leader Nicolás Maduro, amid doubts about the legitimacy of his rule.
Britain recognizes opposition leader Juan Guaidó as president of Venezuela, saying he alone has the authority to act as head of state and to decide how to use the country’s gold held by Britain’s central bank.
Lawyers at Zaiwalla & Co. who represent the Maduro-controlled Central Bank of Venezuela argue that the U.K. should not be able to determine the fate of the assets of a sovereign nation.
“If the U.K. can determine the fate of these Venezuelan assets, it will set a precedent in the landscape of international law that legitimizes governments taking assets from foreign sovereign nations and handing them over to opposition parties,” the firm said in a statement to Law.com International.
“This would have a serious impact on emerging markets with international reserves in western countries,” the firm added.
Guaidó, who is represented by Arnold & Porter, has sought to prevent the gold’s release to the Maduro regime, which he contends is illegitimate and corrupt.
Guaidó was the leader of Venezuela’s National Assembly when the country’s last elections were held, in 2018. Those elections, he says, were rigged.
Under provisions of the Venezuelan Constitution, Guaidó says that he, as head of the legislature, should be the country’s interim president until free elections can be held.
Countries including the U.S. and the U.K. have recognized Guaidó as the rightful president of Venezuela, although Maduro effectively holds power in Venezuela.
Guaidó’s attorneys at Arnold & Porter declined to comment ahead of the high court decision.
Maduro and members of his inner circle stand accused in the U.S. of narco-terrorism and money laundering.
Lawyers for the Maduro government argue that the country needs the funds to manage the COVID-19 crisis, noting that traditionally sanctions have humanitarian exemptions.
“The outcome of this case may well impact the attractiveness of the City of London and the Bank of England as a safe location for foreign sovereign assets,” warned Leigh Crestohl, a partner at Zaiwalla & Co. and lawyer for the Central Bank of Venezuela.