Russia reels, denounces new U.S. sanctions as illegal, unfriendly

FILE PHOTO: National flags of Russia and the U.S. fly at Vnukovo International Airport in Moscow, Russia April 11, 2017. REUTERS/Maxim Shemetov/File Photo

By Andrew Osborn

MOSCOW (Reuters) – Russia condemned a new round of U.S. sanctions as illegal on Thursday after news of the measures sent the rouble tumbling to two-year lows and sparked a wider asset sell-off over fears that Moscow was locked in a spiral of never-ending curbs by the West.

Moscow has been trying with mixed success to improve battered U.S.-Russia ties since Donald Trump won the White House in 2016, and Russia’s political elite was quick to chalk up a summit last month between Trump and Vladimir Putin as a victory.

But initial triumphalism swiftly turned sour as anger over what some U.S. lawmakers saw as an over deferential performance by Trump and his failure to confront Putin over Moscow’s alleged meddling in U.S. politics galvanized a new sanctions push.

Having bet heavily on improving ties with Washington via Trump, Moscow now finds that Trump is under mounting pressure from U.S. lawmakers to show he is tough on Russia ahead of mid-term elections.

In the latest broadside, the U.S. State Department said on Wednesday it would impose fresh sanctions by the month’s end after determining that Moscow had used a nerve agent against a former Russian double agent, Sergei Skripal, and his daughter, Yulia, in Britain, something Moscow denies.

In an early reaction, the Kremlin said the sanctions were illegal and unfriendly and that the U.S. move was at odds with the “constructive atmosphere” of Trump and Putin’s encounter in Helsinki.

The new sanctions come in two tranches. The first, which targets U.S. exports of sensitive national-security related goods, comes with deep exemptions and many of the items it covers have already been banned by previous restrictions.

However, the second tranche, activated after 90 days if Moscow fails to provide “reliable assurances” it will no longer use chemical weapons and allow on-site inspections by the United Nations or other international observer groups, is more serious.

NBC, citing U.S. officials, said the second tranche could include downgrading diplomatic relations, suspending the state airline Aeroflot’s ability to fly to the United States and cutting off nearly all exports and imports.

The State Department’s announcement fueled already worsening investor sentiment about the possible impact of more sanctions on Russian assets and the rouble at one point slid by over 1 percent against the dollar, hitting a two-year low, before recouping some of its losses.

The U.S. move also triggered a sell-off in Russian government bonds and the dollar-denominated RTS index fell to its lowest since April 11.

“There is local panic on the currency market,” BCS Brokerage said in a note. “At times, the number of those who want to ditch the rouble is becoming so high so there is not enough liquidity.”

ILLEGAL

The Kremlin said the new sanctions were “illegal and do not correspond to international law.”

“…Such decisions taken by the American side are absolutely unfriendly and can hardly be somehow associated with the constructive – not simple but constructive – atmosphere that there was at the last meeting of the two presidents,” Kremlin spokesman Dmitry Peskov said.

Washington had become an unpredictable player on the international stage, Peskov added, saying “anything could be expected” from it and that it was important that Russia’s financial system, which he described as stable, was prepared.

In a sign the Kremlin was not eager to escalate an already difficult situation however, Peskov said it was too early to talk about Russian countermeasures.

He criticized the U.S. decision to link the sanctions to the British nerve agent case, an incident the Kremlin has long cast as a Western plot to damage its reputation and provide a pretext for more sanctions.

Skripal, a former colonel in Russia’s GRU military intelligence service, and his 33-year-old daughter were found slumped unconscious on a bench in the southern English city of Salisbury in March after a liquid form of the Novichok type of nerve agent was applied to his home’s front door.

European countries and the United States expelled 100 Russian diplomats after the attack, in the strongest action by Trump against Russia since he came to office.

Konstantin Kosachyov, head of the upper house of parliament’s international affairs committee, was cited by the Interfax news agency as saying it looked like Washington was now behaving like “a police state.”

Dmitri Trenin, director of the Carnegie Moscow Center and a former colonel in the Russian army, said the State Department’s move looked like the latest salvo in what he called a hybrid war.

“Sanctions are the U.S. weapon of choice,” Trenin wrote on Twitter.

“They are not an instrument, but the policy itself. Russia will have to brace for more to come over the next several years, prepare for the worst and push back where it can.”

At variance with Moscow over Ukraine and Syria, Western sanctions have already drastically reduced Western involvement in Russian energy and commodities projects, including large-scale financing and exploration of hard-to-recover and deep water resources.

Proposed U.S. legislation prepared by several senators calls on Trump to widen the sanctions further to include virtually all Russian energy projects and effectively bar Western companies from any involvement in the country.

Introduced by Republican and Democratic senators last week in draft form, Senator Lindsey Graham, one of the measure’s lead sponsors, has called it “the sanctions bill from hell.”

(Additional reporting by Dmitry Zhdannikov, Tom Balmforth, Denis Pinchuk, Andrey Ostroukh; Editing by Richard Balmforth)

UK has not yet identified Skripal poisoning suspects

FILE PHOTO: Salisbury District Hospital is seen after Yulia Skripal was discharged, in Salisbury, Britain, April 10, 2018. REUTERS/Peter Nicholls

LONDON (Reuters) – Britain has not identified the suspects who carried out the poisoning of former Russian double agent Sergei Skripal but is stepping up protection for other defectors who might also be at risk, the UK’s national security adviser said on Tuesday.

Sergei Skripal and his daughter Yulia were found slumped on a bench in the southern English city of Salisbury on March 4 after a liquid form the Novichok type of nerve agent was applied to the front door of his home.

Britain says Russia was behind the attack but Moscow has denied any involvement. The ensuing fallout led to the biggest Western expulsions of Russian diplomats since the height of the Cold War.

Asked by lawmakers on the British parliament’s defense committee if the suspects behind the poisoning had been identified, Mark Sedwill, the national security adviser to Prime Minister Theresa May, said: “Not yet”.

The attack left both Skripal and his daughter critically ill in hospital for weeks. A British policeman was also treated in hospital.

Yulia Skripal, 33, was discharged last month but her father, a former colonel in Russian military intelligence who betrayed dozens of agents to Britain’s MI6 foreign spy service, remains in hospital.

Other Russian dissidents and defectors have also been killed in Britain in recent years in circumstances that have raised suspicions.

Police said they had launched a murder investigation into the death of Russian businessman Nikolai Glushkov who was found dead at his London home days after Skripal was poisoned, although detectives said there was nothing to link the two events.

Following the Skripals’ poisoning, police and intelligence services were also instructed to look at 14 other deaths which were not originally treated as suspicious by police but where allegations of Russian state involvement had been made.

In a letter to NATO Secretary General Jens Stoltenberg last month, Sedwill said Russia’s intelligence agencies spied Skripal and his daughter for at least five years and regarded some defectors as “legitimate targets for assassination”.

He told the British lawmakers that preventative steps were now being taken.

“The police who are responsible for protective security and the various agencies alongside them are reviewing the security of all people who might be vulnerable in that way,” Sedwill told the committee.

(Reporting by Michael Holden; editing by Guy Faulconbridge)

Inspectors analyze toxin used on Russian spy, EU backs Britain

A police notice is attached to screening surrounding a restaurant which was visited by former Russian intelligence officer Sergei Skripal and his daughter Yulia before they were found on a park bench after being poisoned in Salisbury, Britain, March 19, 2018. REUTERS/Peter Nichol

By Alex Fraser and Peter Nicholls

SALISBURY, England (Reuters) – Inspectors from the world’s chemical weapons watchdog on Monday began examining the poison used to strike down a former Russian double agent in England, in an attack that London blames on Moscow.

Britain says Sergei Skripal and his daughter, who are critically ill in hospital, were targeted with the Soviet-era military-grade nerve agent Novichok. It accuses Moscow of stockpiling the toxin and investigating how to use it in assassinations.

Russian President Vladimir Putin, who easily won another six-year term on Sunday, said the claims were nonsense and that Russia had destroyed all its chemical weapons. While the Kremlin told Britain to back up its assertions or apologize, Britain’s fellow EU members offered it “unqualified solidarity”.

Skripal, a former colonel in Russian military intelligence who betrayed dozens of Russian agents to Britain, was found collapsed along with his daughter on a bench in the small southern city of Salisbury two weeks ago.

The identification of Novichok as the weapon has become the central pillar of Britain’s case for Russia’s culpability. Each has expelled 23 of the other’s diplomats as their relations have sunk to a post-Cold War low.

On Monday, inspectors from the Organization for the Prohibition of Chemical Weapons (OPCW) began running independent tests on samples taken from Salisbury to verify the British analysis, said an OPCW source speaking on condition of anonymity.

“The team from The Hague will meet with officials from the Defence Science and Technology Laboratory and the police to discuss the process for collecting samples, including environmental ones,” Britain’s Foreign Office said.

Britain's Foreign Secretary Boris Johnson arrives at an European Union foreign ministers meeting in Brussels, Belgium, March 19, 2018. REUTERS/Francois Lenoir

Britain’s Foreign Secretary Boris Johnson arrives at an European Union foreign ministers meeting in Brussels, Belgium, March 19, 2018. REUTERS/Francois Lenoir

“ABSURD DENIALS”

British Foreign Secretary Boris Johnson said on Monday, before meeting his European Union counterparts in Brussels, that Russian denials of responsibility were “increasingly absurd”.

“This is a classic Russian strategy of trying to conceal the needle of truth in a haystack of lies and obfuscation. They’re not fooling anybody any more,” Johnson told reporters.

“There is scarcely a country around the table here in Brussels that has not been affected in recent years by some kind of malign or disruptive Russian behavior.”

EU diplomats cautioned there was no immediate prospect of fresh economic sanctions on Russia, but the assembled EU foreign ministers did offer strong verbal support.

“The European Union takes extremely seriously the UK government’s assessment that it is highly likely that the Russian Federation is responsible,” said their statement.

They said using a nerve agent for the first time on European soil for 70 years would be a clear violation of the Chemical Weapons Convention, which the OPCW safeguards, and that it represented a “security threat to us all”.

(Reporting by Anthony Deutsch in Amsterdam and Robin Emmott and Alistair MacDonald in Brussels; Writing by Michael Holden; editing by Guy Faulconbridge and Kevin Liffey)