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. Last Updated: 07/27/2016

Russia Holds Back on Lugovoi Reply

In an uncharacteristically restrained reply Tuesday, the Foreign Ministry promised a "targeted and appropriate" response to Britain's decision to expel four Russian diplomats.

Russia, after a series of aggressive foreign policy pronouncements in recent months, had been widely expected to respond immediately and in kind to Britain's declaration.

But the official statement by Deputy Foreign Minister Alexander Grushko was relatively reserved, and analysts downplayed the political and, in particular, economic harm from the standoff over the extradition of Andrei Lugovoi.

"Our reaction will be targeted and appropriate, and the British authorities will be officially informed of this in the nearest future," Grushko said at a news conference.

"They are trying to punish us for following our own Constitution," Grushko said. "This is a direct path to confrontation."

The Constitution prohibits the handing over of Russian citizens to other states.

Britain's Foreign and Commonwealth Office issued a one-line statement in response late Tuesday stating flatly that "no retaliation on Russia's behalf is justified."

British Foreign Minister David Miliband announced the diplomatic expulsions Monday in response to Russia's refusal to extradite Andrei Lugovoi, the former security services officer Britain has charged with murder in the November poisoning of Alexander Litvinenko in London.

Although Russia may still answer the British moves in kind, it chose instead to remind London of its own refusals to comply with past extradition requests by Moscow.

Grushko argued that Britain -- which has turned down 21 requests to hand over people facing charges in Russia, including self-exiled tycoon Boris Berezovsky and Chechen rebel envoy Akhmed Zakayev -- was in no place to make extradition demands of its own.

But many saw Grushko's statement as an admission that Russia's rhetoric had been too tough in the past.

"[Foreign Minister Sergei] Lavrov's deputy spoke in his place because Russia's reaction was too weak," Communist State Duma Deputy Viktor Ilyukhin said Tuesday. "Lavrov would have been uncomfortable coming out with this meaningless declaration."

Ilyukhin added that Russia had already fallen out with too many countries recently, including Moldova, the Baltic states and Georgia.

"It would be unfavorable for Russia to quarrel with even more countries."

Vladimir Ryzhkov, an independent State Duma deputy and Foreign Affairs Committee member, said Tuesday that Russia was in an awkward position.

"It's evident that Britain has serious proof of Lugovoi's guilt, so it looks like Russia is covering up for a murderer," Ryzhkov said. "That's why Russia doesn't feel comfortable making harsh declarations. Russia's reaction is proper and should contribute to reducing tensions."

Bobo Lo, director of the Russia and Eurasia Program at Britain's Chatham House think tank, however, said the Kremlin would do everything it could to cause maximum disruption at the British Embassy while delivering a symmetrical response.

"Russia doesn't just want reciprocity here, it wants reciprocity with a message," Lo said by telephone Tuesday, adding that Moscow was gradually becoming more eager to be seen as a force to be reckoned with.

The big question now is what happens next.

In the event that British diplomats are expelled, Britain is unlikely to raise the ante because it was reluctant to expel the diplomats in the first place, Lo said.

A British Embassy spokesman refused Tuesday to comment on what further measures Britain might take, while a spokeswoman at the Foreign and Commonwealth Office would only hint that the "serious" nature of Miliband's announcement left the possibility for future action.

Meanwhile, British Ambassador Anthony Brenton was echoing businesspeople in downplaying the impact the developments would have on British-Russian trade relations.

"We do not expect our disappointment with the Russian authorities about the Litvinenko case to affect the economic sphere," Brenton said in a statement. "Indeed, we expect British-Russian economic ties to continue to grow."

Richard Lambert, director general of the Confederation of British Industry, said after a meeting with Foreign and Commonwealth Office officials Monday that "economic relationships between the two countries are important and we should separate political disputes from commercial relations."

Neil Cooper, director of the Russo-British Chamber of Commerce in Moscow, described the most recent developments as "a short-term blip," and said they would not have an adverse effect on booming Russian-British trade.

"The interesting thing is that as political relations have taken a downturn over the past year, business and investment relationships have been going in the opposite direction," Cooper said.

According to figures from the State Statistics Service, British companies poured $3.1 billion into Russia during the first quarter of this year, making it the largest investor from the Group of Eight countries and outstripping U.S. investment almost tenfold.

Russian investment into Britain has risen to $1.3 billion over the same period, putting Russia in third place, the service's statistics show.

From January to April, trade between Russia and Britain rose to over $4.6 billion, making Britain Russia's sixth biggest EU trade partner.

A spokesman for U.K. Trade and Investment, a British government advisory body for the development of international trade, said British companies investing in Russia were being told that it was business as usual.

In recent months, two of Britain's biggest investors in Russia, oil giants BP and Shell, have run into difficulties, being forced to cede controlling stakes in major projects to state-run Gazprom.

Both Shell and BP refused to comment on the recent developments, but Natural Resources Minister Yury Trutnev insisted agreements with British firms would not be torn up, Interfax reported.

"We will carry on working as we have been working," Trutnev said. "We don't see any basis for revising our relations with foreign investors in connection with the current events."

But concerns that a further escalation could generate commercial fallout remained.

Alexander Murychev, vice president of the Russian Union of Industrialists and Entrepreneurs, said he hoped to see a line drawn under the matter after Russia had made a proportionate response.

"If the situation develops further it could damage business relations," Murychev said. "Both sides would suffer."

Russia's ambassador to Britain, Yury Fedotov, echoed the sentiment.

"We have to think what can be done to overcome this current state of bilateral relations," Fedotov told reporters Tuesday in London. "The most important thing is to lower emotions."