The Corfu Incident

During the Cold War, it had been stated many times in the media and elsewhere that mines in the waters in the Corfu Straits that damaged two British destroyers killing 44 Royal Navy sailors had been laid by the communist government of Albania's Enver Hoxha. That was the common, accepted belief, so for that reason, some one and a half tons of gold bullion stolen by the Axis powers from the Albanian Central Bank during the 1939-45 war had been held by the Bank of England. After WWII ended, most of the gold bullion was returned by the UK to Albania.

What I find both intriguing - and puzzling - is that the mines actually "might have been laid by Yugoslav naval forces."

Please read on...

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The Corfu Incident
Britain returns Albania's gold in 1.3 million (Pounds) deal

By Tim Butcher, Defense Correspondent
The Daily Telegraph, 28 October, 1998

A diplomatic impasse dating from the start of the Cold War will end today when one and a half tons of gold worth around 12 million Pounds and held for fifty years in the Bank of England is returned to the government of Albania. Britain blocked the gold's return until Albania accepted responsibility for the death of forty-four Royal Navy sailors killed in 1946 when two destroyers hit mines in the straits between Corfu and Albania.

After lengthy diplomatic negotiations since Albania's communist dictatorship ended in 1991, an agreement was reached to return the gold for payment to Britain of compensation. The bullion, stolen form the Albania Central Bank by the Axis powers during the 1939-45 war, had been held in the Bank of England since 1945.

At a private ceremony scheduled to be held today in the Foreign Office in Whitehall today, representatives of the Albania Central Bank will receive a document giving them title to the gold. The Albanians will hand over to the British government a warrant for 1.3 million Pounds compensation. Veterans of the 'Corfu Incident' criticised the exchange as the compensation was one-tenth of the 13 million Pounds awarded to Britain by the International Court of Justice in 1951.

"The sum sounds pretty paltry when you think of the loss of the two ships, of forty-four lives and fifty years of pursuing the claim," said Sir Donald Golsing, the joint chairman of the National Car Parks who was a seventeen-year old signaller on a cruiser accompanying the two damaged destroyers. "But I suppose fifty years is a long time and honour has been done if only to allow Albania to continue its slow reform towards a democratic country."

A spokesman for the Foreign Office said the principle of liability has been accepted by Albania, which has a weak economy that is developing slowly. "The government has great sympathy with the families of those who suffered in the incident but they did receive compensation from the British government shortly after the incident."

The issue of the Albanian bullion, known as King Zog's gold after the last Albanian monarch, has soured relations between Britain and Albania since the incident involving the two ships, Saumarez and Volage. Albania dismissed British claims that the mines were illegal and there was some evidence that they might have been laid by Yugoslav naval forces. But a hearing at the International Court of Justice in the Hague supported Britain's clams and awarded compensation.

The gold was part of a large cache of Nazi gold held in the Bank of England but administered by a joint commission consisting of Britain, France, and America. While the commission returned vast sums of gold to nine claiment countries such as Austria and Luxenbourg, Britain blocked the Albanian claim until the issue of damages for the Corfu incident were settled.