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Sanctions caused Deutsche Bank, Citibank to foreclose on Venezuelan gold, Reuters says
Venezuela Loses $1.4 Billion of Gold to Banks for Guarantees, Sources Tell Reuters
By Corina Pons and Mayela Armas
Reuters
Thursday, June 6, 2019
CARACAS, Venezuela -- Citibank and Deutsche Bank have taken control of around $1.4 billion of Venezuelan government gold, which they received as guarantees for loans, as a result of U.S. sanctions on the Venezuelan Central Bank, according to five sources.
Between 2014 and 2016 the central bank used a portion of its foreign gold reserves to guarantee financial operations with banks to boost liquidity, with the intention of repaying the loans to avoid losing the gold.
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Five sources with knowledge of the deals said the BCV had agreed with Citibank and Deutsche Bank to buy back the gold in 2020 and 2021, but since the U.S. government imposed sanctions on the central bank in April, the banks had invoked a condition of the contracts to retain ownership of the bars.
Both banks had resolved that an "event of default" had occurred due to the sanctions, as established in agreements underpinning the gold swap deals, the sources said.
Citibank took control of gold for around $400 million BCV was supposed to repay in 2020. For a separate guarantee Deutsch Bank took $1 billion, the sources said. ...
... For the remainder of the report:
https://www.reuters.com/article/us-venezuela-gold/venezuela-loses-1-4-bi...
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