The Venezuelan government has won a judicial battle to reclaim roughly 1.35 billion Euros (nearly 1.5 billion US dollars) held by Portugal’s Novo Banco since 2019.
On Wednesday, Information Minister Freddy aez published the Central Civil Court of Lisbon’s ruling, dated July 31, ordering the private bank to transfer the funds to accounts held by nine Venezuelan entities, including the state oil company PDVSA, joint oil ventures, and the Venezuelan Economic and Social Development Bank (BANDES).
The Venezuelan Foreign Ministry praised the court’s decision to release the frozen funds in a statement.
“This constitutes a clear victory of the Venezuelan people against the strategy promoted by foreign powers and local politicians to appropriate the country’s resources and cause suffering to the population,” the statement said.
According to the paper, the Venezuelan government does not rule out future legal action against the Portuguese bank “for damages caused to its entities and people.”
Novo Banco, for its part, stated that the court judgment was “expected,” and it reacted to the bank’s plea to the Portuguese courts “to clarify existing doubts regarding the legal representation of Venezuelan public entities,” chosen by the Nicolás Maduro government.
The Novo Banco money were withheld after Venezuelan opposition leader Juan Guaidó declared himself “Interim President” in January 2019, with the backing of more than 50 countries, including Portugal. Since then, $6 billion in Venezuelan assets have been frozen in many European countries. However, the US-backed self-proclaimed “interim government” disintegrated in December 2022, altering the court battle’s direction.
President Maduro declared on national television on Friday that his government “will not give up fighting to rescue all the resources that belong to Venezuelans.” He went on to say that once the funds in Novo Banco are acquired, “it will go directly to guaranteeing people’s social rights and public services.”
Novo Banco’s lawyers have not stated when the transfer will take place, instead noting that they are “analyzing the practical effects of the ruling.” The bank also stated that returning the funds to Venezuela would have no effect on its capital ratios, resolving concerns about the country’s financial problems in recent years.
The judgement by the Lisbon Court, according to Venezuela’s Vice-Minister of Anti-Blockade Policies, William Castillo, was more of a “political victory” because the Maduro government will not be able to access the cash in the foreseeable future.
“This [judicial] decision opens a new stage [but] that money is not going to arrive here tomorrow because […] BANDES is sanctioned and is the owner of the resources,” Castillo added.
BANDES was established in 2001 to support community-led development projects. The US Treasury Department sanctioned the firm in May 2019, alongside the Bank of Venezuela and Bicentenario Bank, two of the Caribbean country’s largest state-owned banks. Venezuela has been subject to extensive US sanctions since 2017.
In September 2021, European Parliament member Mick Wallace stated that the Portuguese government was using Novo Banco “as a front” to expropriate Venezuelan funds at a time “when Portugal was clearly not applying US sanctions.”
The Irish politician also claimed that it was unclear at the time whether the Portuguese bank still had the Venezuelan funds due to the “odd circumstances” surrounding its ownership, which included selling 75 percent of its shares to the US investment fund Lone Star, losing billions of euros, and turning to the state for capital injections to stay afloat.
President Maduro requested in April 2019 that the Portuguese government release the frozen funds in order to purchase food and medications as Venezuela faced food and medicine shortages as a result of an economic crisis aggravated by US sanctions. Soon after, BANDES officials requested that the cash be transferred to the Pan American Health Organization (PAHO) to pay for vaccines and medicines for children, claiming that a judge had approved the operation for humanitarian grounds, but the appeals went unanswered.
According to the Venezuelan government, Novo Banco also refused to send 4.7 million Euros to the Italian Foundation for Bone Marrow Transplantation, resulting in the deaths of Venezuelan children and teens who need treatment or surgery.
