UK’s response to nerve agent attack

The UK government has revealed that it is highly likely that Kremlin was linked to the nerve agent attack on a former Russian spy. UK Prime Minister Theresa May will be announcing measures as a retaliation to the attack.

If the government were to impose sanctions on Russian businesses, that might ultimately affect UK’s own interests.

Background

Unexplained Wealth Order (UWO)

On 27th April 2017, the UK parliament passed a provision of the Criminal Finance Bill that introduces method to tackle corruption in the region. It was called the Unexplained Wealth Orders. This followed action that was already taken by governments in Australia and Ireland. The UK law enforcement agencies can now use an Unexplained Wealth Orders to investigate the source of that money, and, if it is found to be corrupt money, more easily return it to those from whom it has been stolen.

After the law came to force in 2018, experts noted that it would especially affect Russian oligarchs with assets in the UK. Many oligarchs currently have property across the world and reside in other nations including the United Kingdom. The number of billionaires living in the UK has risen to more than 100 for the first time, according to the 2014 Sunday Times Rich List. There are now 104 billionaires based in the UK with a combined wealth of more than £301 billion.

Russian spy attack

On March 2017, Sergei Viktorovich Skripal, a former Russian military intelligence officer turned spy for Britain′s intelligence services, was attacked. He and his daughter were found unconscious after falling victims to a poison attack. It was later revealed that they were attacked by a nerve agent. Skripal and his daughter, Yulia were poisoned and both were hospitalized while critically ill. In addition, three police officers who responded to the crime scene also required treatment for breathing difficulties.

Analysis

UK Prime Minister Theresa May has stated that since the origin of the nerve agent is from Russia, it is highly likely that Kremlin was behind the attack. She said that the spy had been attacked by a “military-grade nerve agent of a type developed by Russia” and called it a “brazen attempt to murder innocent civilians on our soil”.

May said the government would consider Russia’s response on Wednesday. “Should there be no credible response, we will conclude that this action amounts to an unlawful use of force by the Russian state against the United Kingdom,” she said, promising to return to the house with a full range of retaliatory measures.

“This attempted murder, using a weapons-grade nerve agent in a British town, was not just a crime against the Skripals. It was an indiscriminate and reckless act against the United Kingdom, putting the lives of innocent civilians at risk. And we will not tolerate such a brazen attempt to murder innocent civilians on our soil.”

Foreign Secretary Boris Johnson said if the attack was shown to be a "direct act" by the Russian state it would be 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".

Even though measures have yet to be revealed, experts believe that UK is likely to expel some Russian diplomats and it will elicit a similar response from Kremlin as well. In addition, if UK authorities prove a direct link between Kremlin and the attack, then the government could also impose sanctions. The government could also impose measures on Russian organizations. Some believe that this would ultimately also affect UK companies and their vested interests in the region. For instance, BP's 20% stake in Russian oil and gas giant Rosneft. It also remains to be seen if any sanctions will be imposed on powerful oligarchs residing in the UK. Interestingly, this might even affect Premier League. Oligarchs Usmanov and Abramovich own a substantial stake in football clubs – Arsenal and Chelsea.  Even then they have operated legally in Britain, would sanctions affect their shares and therefore the functioning of these clubs?

Russia meanwhile has maintained its innocence in the developments. Maria Zakharova, the spokeswoman for the Russian foreign minister, called May’s remarks “a provocation” and described the event as a “circus show in the British parliament”.

Assessment

Our assessment is that it is clear that UK and Russia are headed towards a diplomatic row that could undermine the ties between the countries for years to come. Any sanctions against Russian businesses will also ultimately affect other European organizations that have made monetary investments in Russia and this includes British companies.