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News > United Kingdom

Italy Fears For Gold Reserves As UK Seizes Venezuelan Gold

  • Gold bullion is displayed at Hatton Garden Metals in London, Britain, Jul. 21, 2015.

    Gold bullion is displayed at Hatton Garden Metals in London, Britain, Jul. 21, 2015. | Photo: Reuters

Published 26 February 2019

Following the law of unintended consquences, Italian lawmakers are taking action in response to the Bank of England's unjustified refusal to return Venezuela's gold.

Reacting to the Bank of England's withholding around US$1.56 billion in gold reserves from Venezuela, the Italian Chamber of Deputies member Claudio Borghi suggested that the Italian state’s ownership of its own gold reserves be more clearly defined in a new law.

Bank of England Refuses to Return $1.2B Venezuelan Gold

Marco Zanni, an Italian representative in the European Union's Parliament, said that Borghi’s legal proposal aims to define the state of ownership of gold reserves held in the Bank of Italy, which currently has 2,400 tons of precious metals, an amount equivalent to approximately US$114 billion. 

In addition Zanni points out that Italy must secure its property over its reserves held in private banks. Accordingly, the EU legislator asked the European Central Bank (ECB) to confirm that their member states gold reserves are only stored in its system and that such reserves are not owned by the ECB or any other bank.

"I asked the ECB to declare, in accordance with what is stipulated in the Treaties, that the gold reserves deposited in the EU banking system ... are not owned by the ECB or the Italian banks," Zanni said as reported to Cuneo, and explained that "the correct thing would be for this huge sum to remain available to the Italian state and its citizens, and not to banks that are private entities, even when they perform public functions."

MEP Zanni stressed that there is no law that currently defining the rights of an entity storing Italian gold reserves, most of which are currently stored in U.S. and British banking institutions. The Bank of Italy only receives an annual certificate from these banks confirming the Italian reserves remain intact.

However, Italy “does not even have the capacity to send an inspection team which can verify if the gold is still there,” Zanni explained, adding that these practices should be changed so the Italian state gains direct control over its gold reserves, which is especially important considering the recent problems faced by Venezuela.

"As an example we have Venezuela, a country which requested to repatriate a small part of its gold reserves and is now facing difficulties because... [the United Kingdom] is presenting several pretexts to avoid returning that gold," Zanni said.

Up to the moment, London has distanced itself from the Bank of England's decision to reject Venezuela's request to repatriate its gold, arguing that the bank is an independent body.

Nevertheless, Venezuelan President Nicolas Maduro expressed his hope that the United Kingdom is not stealing "the gold that legally belongs to the Central Bank of Venezuela."

The freezing of Venezuelan gold occurred in the midst of U.S. attempt to prevent the Venezuelan government from accessing its assets abroad, among which is money from oil exports.

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