by WorldTribune Staff, December 11, 2018
U.S. President Donald Trump last month signed an executive order sanctioning Venezuela’s gold exports and banning American citizens from dealing with anyone involved in “corrupt or deceptive” gold sales from the socialist South American nation.
The move by Trump tightens sanctions that effectively seal almost 16 tons of Venezuelan gold, worth about $550 million, that is being held by the Bank of England, The Washington Times noted.
Venezuelan President Nicolas Maduro, who at times has waved bars of gold during rallies, has turned to gold to deal with a cash crisis precipitated by a decline in the nation’s production of oil.
“As oil production has fallen, the government has become increasingly reliant on gold for quick cash,” said Geoff Ramsey, a Venezuela analyst at the Washington Office on Latin America.
The catch, however, is that “some of that gold has been mined in very questionable circumstances,” relying on elaborate international money laundering schemes to turn the precious metal into cash, Ramsey told the Washington Times.
Marshall Billingslea, assistant secretary for terrorist financing at the U.S. Treasury Department, has drawn specific attention to the dangers of the Maduro government’s dealings in gold.
“This gold is being removed from the country without any of the customary safeguards that would ensure the funds are accounted for and properly cataloged as belonging to the Venezuelan people,” Billingslea told an audience in October at the Brookings Institution.
U.S. national security adviser John Bolton said in a policy speech in Miami last month that “The Maduro regime has used this [gold] sector as a bastion to finance illicit activities, to fill its coffers and to support criminal groups.”
Bolton said Venezuela was among a “Troika of Tyranny” with Cuba and Nicaragua who collectively threaten U.S. interests in the Western Hemisphere in a way that justifies “direct action” by the administration “against all three regimes.”
Socialist strongman Hugo Chavez nationalized Venezuela’s gold industry in 2011. But mismanagement led to production in 2016 of less than 1 ton, according to commodities researchers. Venezuela has the world’s second-highest gold reserves.
Maduro launched a plan to revitalize the gold mining industry by allowing the country’s armed forces wide-ranging security powers over mines, including collecting mining taxes.
Reporter Dan Boylen noted for the Washington Times that “The results have been worse than anyone could have expected, analysts say, with massive environmental damage stemming from large-scale mining and merciless disputes between mafia clans and local gangs unfolding among the tragic backdrop of muddy pits and deadly hand-dug shafts.”
Still, gold production jumped to 8.5 tons last year with projections for 24 tons this year, said Venezuelan Mining Minister Victor Cano.
“Much of the gold is laundered, cleaned and moved through Colombia or countries in the Caribbean,” Ramsey said. “Venezuelan mining companies are also purchasing the gold, in murky conditions, with very few questions asked about where it comes from. These are the companies most affected by the recent gold sanctions.”