Bank Of England Refuses To Return 14 Tonnes Of Gold To Venezuela

The Bank of England claims to be one of the largest physical gold custodians in the world, holding gold bars in vault storage on behalf of more than 70 central banks and a number of commercial (bullion) banks.

As a long-standing and well-known gold custodian, it should therefore be a simple matter operationally and logistically for any central bank customer from around the world to withdraw gold bars from the Bank of England and to have those gold bars sent overseas. These types of shipments have been happening at the Bank of England for hundreds of years.

Such an event would normally not generate any media interest nor even be known about in the public domain such is the secrecy and opacity of central bank gold transactions. For these reasons, the current case involving the Bank of England’s refusal to deliver Venezuela’s gold stored in London, and the way its been publicized, raises some questions and deserves comment.

HM Treasury and Fleet Street

So what exactly is the issue? On 5 November, the London headquartered Reuters news agency reported that the Venezuelan state, fearing sanctions, is attempting to repatriate 14 tonnes of gold from the Bank of England in London, but that this gold withdrawal and transport operation has not yet been actioned despite the withdrawal request being made by Venezuela nearly two months ago.

According to Reuters’ sources which were two unnamed “public officials with direct knowledge of the operation“, Venezuela’s gold bar withdrawal delay is being caused by the difficulty and cost in obtaining insurance for the gold shipment, and also because the Bank of England wants to know what Venezuela plans to do with its gold once it receives it.

On 7 November, the establishment ‘The Times’ of London newspaper picked up on the same story, running a report that “British officials” want clarification on what the Venezuelan government intends to do with its gold after it receives it, and that these “officials” are also throwing up hurdles by insisting that for this gold shipment “standard measures to prevent money-laundering be taken“.

Interestingly, in the above reports, both the Bank of England and Venezuela’s central bank, the Banco Centrale de Venezuela (BCV), declined to comment. This means that the entire ‘story’ about Venezuela’s gold that is now in the public domain is based on snippets of information that ‘public officials’, possibly from HM Treasury, fed to both Reuters and The Times.

The timing of the above news items from Reuters and The Times also came a few days after the United States had signed a new executive order on 1 November imposing sanctions on Venezuela’s gold industry (Executive Order 13850), an executive order which pressurizes the global gold industry not to do business with Venezuela or its gold sector.

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