Coronavirus: Venezuela in legal battle to access $1bn of Bank of England gold

Lianna Brinded
Head of Yahoo Finance UK
The Bank of England is the custodian of gold for a number of developing nations. (Manaure Quintero/Bloomberg)

Venezuela has launched a legal battle to access $1bn (£815m) of gold stored at the Bank of England (BOE) as it claims it needs the money to tackle the coronavirus pandemic.

The BOE is the custodian of gold for a number of developing nations.

Venezuela's economy has collapsed under the leadership of president Nicholas Maduro in recent years. The UN said late in 2019 that 4.6 million Venezuelans had fled their country amid an economic crisis.

Maduro’s leadership is not recognised by a number of nations, including the UK and US. The economy is also suffering after US sanctions were placed onto the country.

The country was placed under quarantine and a state of emergency by Maduro in March. It has reported 618 coronavirus cases and 10 deaths, so far.

The initial request for the BOE to transfer the value of the gold to the United Nations Development Programme (UNDP) to pass onto the country "as a matter of urgency" to buy supplies like food and medicine, was made weeks ago. However, the legal claim was filed in a London court on 14 May.

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Sarosh Zaiwalla, a London-based lawyer representing the central bank, said in a statement to the press: "With lives on the line, now is not the time to attempt to score political points."

The UN told the BBC that it “only that it had been approached by the Venezuelan bank to explore such mechanisms.”

The Bank of England declined to comment to Reuters when asked about the case.