The Central Bank of Venezuela will start refining gold in Turkey to avoid US sanctions – penalties that deter the country from carrying out banking operations in Switzerland, according to the Venezuelan mining minister.

“This is an agreement established with Turkey and the Venezuelan central bank,” Victor Cano told journalists. “It’s being done by allied countries because imagine what would happen if we sent gold to Switzerland and we are told that it has to stay there because of sanctions.”

Venezuela’s central bank has been purchasing gold from small miners in the south of the country and then refining the precious metal to use as monetary gold. So far Caracas has been seeking to shore up its international reserves which have plunged as Venezuela struggles with the country's worst-ever economic crisis.

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Cano didn’t specify which Turkish firms are participating and how much gold would be refined by them. However, the minister said that Venezuela had bought 9.1 tons of gold from small miners in 2018. After being refined in Turkey the gold is taken back to Venezuela to become part of the central bank’s portfolio of assets.

Venezuela is currently the subject to numerous sanctions imposed by Washington, which accuses the Venezuelan government of violating human rights and undermining democracy. US citizens are currently banned from buying newly-issued debt from Venezuela and its state-owned companies. Venezuelan President Nicolas Maduro called the penalties “economic war” against Caracas.

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