Coronavirus: Venezuela in bid to force Bank of England to hand over $1bn of gold

20 May 2020, 07:12 | Updated: 20 May 2020, 16:20

Venezuela's central bank has launched a legal claim in an effort to force the Bank of England to hand over £830m ($1.02bn) of the country's gold it holds.

A document submitted in a London court follows a request Caracas made to the Bank of England in April to sell part of its gold reserves there and send the proceeds to the United Nations.

Venezuela says it wants to use the gold to raise cash to fund its coronavirus response, amid US sanctions.

The collapse in global oil prices and quarantine measures designed to quell the COVID-19 outbreak has further crippled the country's beleaguered economy under the presidency of Nicolas Maduro, whose leadership is not recognised by dozens of nations including the UK and the US.

Submitted in a commercial court and dated 14 May, the claim says the Venezuelan central bank "seeks an order requiring BoE to comply with the proposed instruction".

Once transferred to the United Nations Development Programme, the funds would be used to buy healthcare equipment, medicine and food to address Venezuela's "COVID-19 emergency" the document seen by Reuters news agency said.

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"The foot-dragging by the Bank of England is critically hampering Venezuela and the UN's efforts to combat COVID-19 in the country," Sarosh Zaiwalla, a London-based lawyer representing the country's central bank, said in a statement.

The bank offers gold custodian services to many developing nations.

A total of 749 coronavirus cases and 10 deaths have been registered by Venezuela, but health workers say the country's battered medical system could be overrun if the outbreak worsens there.

The Bank of England has declined to comment on the claim, while the Venezuelan central bank did not respond to a request to comment from Reuters.