The Kremlin failed to give an explanation to the U.K. about how a nerve agent was used to attack a former Russian spy and his daughter in Salisbury, a move which could prompt a strong retaliation from the British government.
Prime Minister Theresa May is expected to make a statement to the U.K.'s parliament on Wednesday afternoon, outlining what measures the country intends to take against Russia.
Russia was given until midnight on Tuesday to explain to the U.K. government why a nerve agent — one of the "Novichok" family of deadly chemical weapons developed in Russia — was used to poison former Russian secret service agent Sergei Skripal and his daughter Yulia in Salisbury in early March.
But Moscow has so far not provided any official explanation for the attack although Foreign Minister Sergei Lavrov said Tuesday that Russia was not involved and "had not been given access to materials" related to the case, Reuters reported.
On Wednesday morning, Kremlin spokesman Dmitry Peskov again reiterated that Russia had no involvement in the poisoning and said the accusations were "baseless."
Asked about possible British measures against Russia, he said the Kremlin hoped common sense would prevail and that it was too early to say what Russia's response to any measures might be.
Despite the Kremlin's insistence otherwise, the investigation still points to Russia's involvement — Skripal was a former Russian spy turned double agent for the U.K. — May said Monday that it was "highly likely" that Russia was responsible for the attempted murders. The Skripals remain in a critical condition in hospital.
Asset freezes, travel bans and expulsions
Now, the ball is in the U.K.'s court and it has to decide what retaliatory measures it will take. On Tuesday, May said the government was "ready to take much more extensive measures" against Russia, beyond the commonplace expulsion of diplomats, visa freezes and suspended security cooperation.
Having already predicted correctly that Russia would miss the deadline, experts at research consultancy Eurasia Group believe the U.K. will try to freeze assets of Russian individuals and entities.
"May will … have to show readiness to use the one piece of leverage the U.K. public believes she has over Russia — the ability to freeze the U.K.-based assets of Kremlin-connected Russian elites," analysts Charles Lichfield, Jason Bush, Mujtaba Rahman and Alex Brideau, said in a note Tuesday.
"May will also confirm that there will be no official U.K. government presence at the World Cup and suggest that a fully-fledged U.K. boycott is still possible, depending on what is discovered in the Salisbury investigation. Finally, there will probably be a classical expulsion of Russian diplomats," the analysts said.
Meanwhile, U.K. Finance Minister Philip Hammond suggested at the weekend that the U.K. could create legislation that bans individuals from entering the U.K. and access to its financial system, similar to the "Magnitsky Act" in the U.S. The U.S. has punished Russian officials that it believes are responsible for the death of Russian tax accountant Sergei Magnitsky in a Moscow prison in 2009.
International response
International patience with Russia certainly appears to be wearing thin. On Tuesday, European nations including France and Germany, as well as NATO's General Secretary Jens Stoltenberg and the outgoing U.S. Secretary of State Rex Tillerson, condemned the attack. They also expressed their solidarity with the U.K. and pledged their support.
The U.K. Foreign Office, headed by Boris Johnson, issued a statement calling for a "united response" to Russia.
"If as we suspect is highly likely the Russian state was responsible, this would be further reckless behavior which threatens the international community and requires an international response," the Foreign Office said.
"The Foreign Secretary has emphasized that if this was a direct act by the Russian state then it would not simply be a threat to the U.K., but a clear violation of the chemical weapons convention, a breach of international law and a threat to those who abide by the rules-based international order as a whole," the office concluded.
How far that international support will go is yet to be tested, however.
Timothy Ash, senior sovereign strategist for emerging markets at Bluebay Asset Management, said in a note Tuesday that there was a sense in financial markets that "May will not do anything very substantive, and Russia is durable/able to resist." However, he wondered if that was an "overly sanguine" view.
He was also surprised by the level of support for the U.K.
"I was struck by the strength of the comment from Tillerson, and support from NATO, Macron and various other European leaders … Not sure May has much downside from doing something substantive, given the relationship with Russia is already so poor, and she is struggling in her premiership and needs to show some steel."
Rough justice
The U.K. is no stranger to cases of rough justice allegedly at the hands of Russia. Alexander Litvinenko, a former secret service officer in Russia, was murdered in London in 2006 after his cup of tea was laced with polonium.
The U.K., and London, in particular, has become something of a bolt-hole for wealthy and politically influential Russians, with many fleeing to the capital or country after falling foul of Russian President Vladimir Putin and his regime.
Though there is so far no allegations of foul play, on Tuesday, counter-terrorism police began an investigation into the death of a man in southwest London. This followed reports that he was a close friend of Putin critic and tycoon Boris Berezovsky — an oligarch opposed to Putin that was found hanged in 2013. An open verdict, meaning the death was suspicious, was recorded for his death.
Eurasia Group analysts noted that "the U.K. has more experience dealing with high-profile assassinations of Russians than it would like" and that U.K. leader May "knows that her shaky international and domestic credibility in on the line."
"(Tuesday's) intervention shows that she is ready to reveal information as soon as she is confident in it, without waiting for the investigation to be completed. Nor will she wait to know exactly who organized the attack to take retaliatory measures," they said,