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. Last Updated: 07/27/2016

Top Trade Official Hit with Expulsion

Moscow has asked the British Embassy's top trade and investment official to leave the country in a move suggesting the ongoing diplomatic dispute between Britain and Russia could spill over into the economic sphere.

Reports that the senior embassy official is responsible for liaising with Russian government officials and British investors indicate that Andrew Levi, counsellor for economic and scientific affairs, is one of the four British Embassy officials who have been told to leave. Multiple sources close to Levi have confirmed that he is one of the four and is due to leave the country Sunday.

The sources close to Levi spoke on condition of anonymity, and a British Embassy spokesman said Wednesday that it was standard practice not to identify staff involved in tit-for-tat expulsions. Levi himself could not be contacted Wednesday.

Analysts were surprised the list of officials being expelled included such a high-ranking official, although they were divided on what effect this would have on the climate for British investment in Russia.

Sources familiar with Levi's case said Wednesday that he had played a significant role in dealing with recent difficulties faced by British firms operating in Russia. They said he acted as the point man during the negotiations over the Sakhalin-2 crisis, where Shell was forced to sell a controlling stake in a $22 billion energy project in the Far East to state-controlled Gazprom.

The dispute started when Russia refused a British request for the extradition of Andrei Lugovoi, the former security services officer charged with fatally poisoning former FSB officer and Kremlin critic Alexander Litvinenko with a radioactive substance in a London hotel last year.

Britain reacted by evicting four embassy officials from the Russian Embassy in London last week. Russia then announced that it would expel four British Embassy officials.

But a report quoting sources among British businesspeople and government officials by Germany's Deutscher Depeschendienst news agency said the Russians evicted from London were fairly low ranking and that the expectation was that the Britons evicted from Moscow would be of similar rank. The unwritten rule that responses of this type have to be symmetric was broken by Moscow in this case, the news agency said.

Neither the Kremlin nor the Foreign Ministry would confirm the report Wednesday. A spokesman for the Foreign Ministry said it had no information on the names of the British officials asked to leave.

Presidential spokesman Dmitry Peskov said neither side would disclose the expelled officials' positions. He also repeated Kremlin statements that Moscow had to respond to the British decision to expel the four Russians.

"We hope that our British colleagues will show due respect for our mutual relationship," Peskov added in a telephone interview.

The news stunned analysts and Western business representatives.

Alfa Bank chief strategist Chris Weafer said he was surprised that Russia was targeting senior economic staff.

"On the one hand, it's not going to cause a great disruption because U.K. businesses have a number of other structures," he said. At the same time, he added, the move was designed to send "a clear warning" to Britain that the problems could spill over in a way that would be detrimental to business.

Neil Cooper, director of the Russo-British Chamber of Commerce in Moscow, would not comment on the effects on British investment, but said the news came as "something of a surprise."

Andrei Soldatov, editor of a security services watchdog web site, said the expulsion of such a high-placed economic official did not mean trouble for bilateral business ties.

"Unfortunately, a diplomat's title tells you nothing," Soldatov said. "Anyone in an embassy can work under any title, but that doesn't mean that it corresponds to their daily business."

A source in one company in Russia with close ties to Britain said Levi had been very capable in helping guide and develop British business, but would certainly be replaced by someone similar. He added that the embassy's help was particularly valuable for smaller companies making their first moves onto the Russian market.

The source also said there had been no discernable change in the business environment since the diplomatic spat broke out.

British investment in Russia totaled $3.1 billion for the first quarter of 2007, according to the State Statistics Service, making Britain the largest investor among Group of Eight countries and topping U.S. investment tenfold.

Russian investment in Britain of $1.3 billion puts the country in third place, the service's statistics show.

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

Meanwhile, Russian prosecutors said Wednesday that Lugovoi might actually have been poisoned by Litvinenko.

"The investigation has found that [Lugovoi associate Dmitry] Kovtun and Lugovoi might have been contaminated via their respiratory systems," Andrei Mayorov of the Prosecutor General's Office's serious crimes department was quoted as saying Wednesday by Interfax.