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Brits espionage in russia through ouncil offices { January 14 2008 }

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Fresh cloud cast over UK-Russia ties
By Catherine Belton in Moscow
Published: January 14 2008 13:52 | Last updated: January 14 2008 18:33

Russo-British relations looked set to hit a new low on Monday after Moscow said it would suspend visa issuance for employees of the British Council in St Petersburg and Ekaterinburg.

Russia’s foreign ministry said it would halt the issuance of visas for the offices outside Moscow and levy undisclosed tax charges against the British Council in St Petersburg after the UK organisation defied an order by Moscow to close down its regional branches.

The ministry summoned Tony Brenton, British ambassador to Moscow, on Monday and soon after issued a statement blasting Britain for defying the order and keeping its offices open.

The ministry said Monday’s reopening of the British Council’s St Petersburg office after the prolonged Russian New Year holidays was a “planned provocation aimed at escalating the tension in Russo-British relations”.

Last month the ministry ordered the UK to close down its offices outside Moscow by the end of the year, upping the stakes in a standoff both sides link to the diplomatic dispute over the killing of Alexander Litvinenko. It claimed the British Council had no legal basis to operate in Russia, had broken tax laws and was in breach of the Vienna Convention on consular relations by unlawfully operating from diplomatic buildings.

The British Council has insisted its operations are legal under a 1994 agreement. Mr Brenton was defiant on Monday. “I told them the British Council will continue its work in Russia and its closure would be illegal,” he told reporters.

But the foreign ministry said the 1994 accord was only temporary and work to reach a new one had been halted “by the unfriendly steps the British side took toward our country in July last year”, a clear reference to the UK’s request to extradite a suspect in the Litvinenko case.

The stand-off casts a new pall over UK-Russia relations, already at their worst in two decades following Moscow’s refusal to extradite Andrei Lugovoi, the former KGB agent wanted by Britain on suspicion of poisoning Litvinenko with the radioactive isotope polonium.

The dispute over the British Council’s status had broken out in 2006 when Russian officials reopened a tax probe just days after the Federal Security Service, or FSB, the KGB’s successor, alleged it had caught British diplomats involved in espionage and the financing of non-governmental organisations in Russia.

James Kennedy, the British Council’s Russia director, who was present at the St Petersburg office for its reopening, said Russia had made the stand-off increasingly political. “There have been clear statements by the Russian foreign ministry in recent months linking the events around the British Council with the Litvinenko case. Our view is that the British Council is a cultural organisation and should not be involved in political disputes,” he said.

Mr Kennedy said it was too early to say what impact the sanctions would have on the offices’ work.

“It’s a lengthy statement and we’re studying it closely,” he said. “It remains the case that we do not wish to put our staff at any risk.”

He said the Russian authorities had launched a new tax inspection of the British Council offices last year after it settled earlier claims of £1.4m ($2.7m, €1.8m) in 2005 and registered as a regular Russian taxpayer.

Copyright The Financial Times Limited 2008

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