When former KGB agent and Russian dissident Alexander Litvinenko died after being poisoned with radioactive polonium in November 2006, everyone suspected foul play. But the murder turned political when1 British investigators found substantial evidence that Andrei Lugovoi, a former KGB operative, was responsible for Litvinenko’s death. In May 2007, Britain submitted a request to the Russian government for Lugovoi’s extradition. Russian officials not only refused to remove Lugovoi, but they also appointed him deputy of the State Duma of the Russian Federation. He was thereby granted parliamentary immunity. As dramatic as this case was, however, Litvinenko’s assassination and the subsequent diplomatic fallout was just one in a chain of events that have recently heightened tensions between Russia and Britain. Even as the two countries look to deepen economic relations in the coming years, political divisions between the two are likely to widen. Further diplomatic confrontations may prove damaging to the codependent relationship between the two nations.

Russo-British relations had been weakening long before the Litvinenko murder. Tensions originally surfaced when Britain granted political asylum to Boris Berezovsky, an anti-Putin Russian businessman, and Akhmad Zakhaev, a Chechnyan political leader. When Britain refused Russia’s request for their extradition, both countries were implicated in a series of small spy scandals. After the Litvinenko affair, a full-blown diplomatic war emerged. Both countries expelled the other’s diplomats, and Britain began restricting visas to Russian officials. In retaliation, the Russian government announced in December 2007 that certain Russian offices of the British Council, the non-departmental arm of the British government that promotes cultural exchange with other nations would be shut down for tax violations. When the British Council protested, the Russian Minister of Foreign Affairs Sergey Lavrov admitted that mounting political tensions had spurred the demand for the offices? Closure, and that tax violations were merely a pretext to staunch criticism. The offices were eventually shut down in light of allegations that Russian security service agents were harassing and intimidating Council workers.

These combative political events have occurred, somewhat paradoxically, as economic and social ties have increased. Despite diplomatic problems, the British Foreign and Commonwealth Office reported a 25 percent yearly growth in bilateral trade between Britain and Russia. In fact, the United Kingdom was the single largest investor in Russia in 2006 and 2007, and Russian companies are strong performers on the London Stock Exchange. Furthermore, British petroleum companies, eager to exploit Russian supplies of oil and natural gas, have invested heavily in Russia.

In parallel with economic cooperation, Russia and Britain have seen greater cross-cultural awareness and appreciation. The British Council in Russia has spearheaded efforts to promote cultural exchange as well as mutual understanding and respect. Partly as a result of the Council’s work, members of the Russian elite are increasingly adapting Western habits and lifestyles. London has become the adopted home of choice for many wealthy Russians who own houses in the city and send their children to London schools. Political tensions have not yet prevented wealthy Russians from associating with Britain, though many Britons have come to resent the Russian émigrés for driving up property prices and supposedly parading their new-found wealth.

The future of Russo-British diplomatic relations does not look promising, despite the nations? closer economic and cultural ties. Gordon Brown’s appointment of David Miliband, a strong human rights advocate, as Foreign and Commonwealth Secretary signaled that Brown’s government would take a much stronger stand against Russia’s suspected rights violations. The British Daily Mail reported that one Russian official already accused Miliband of anti-Russian racism. Meanwhile, Britain’s hope that Russia would elect a pro-Britain president to succeed Vladimir Putin was squashed when Dmitri Medvedev entered the 2008 race. As the handpicked successor to Putin, Medvedev was almost guaranteed to win the presidency, and he is likely to continue to carry out his predecessor’s foreign policy. Indeed, Medvedev has already accused the British Council of using its offices to spy on Russian government activities.

Recent events suggest that escalating tensions may have spillover effects to the economic sphere. In 2007, British Petroleum was forced to sell its Russian holdings to Gazprom, the Russian state oil company. Further controversies could prompt Russia to nationalize more assets, jeopardizing business relations between the two countries. Moreover, British officials have enlisted the support of EU member countries, voicing concern over a prospective free trade deal with Russia. Britain also advised Europeans to review Russia’s candidacy for the Organization of Economically Developed Countries and World Trade Organization.

Russo-British economic ties do remain strong, and recent disputes are unlikely to fundamentally alter the increasing bilateral trade. Smaller skirmishes may not lead to officially acknowledged policy shifts: Milibank himself said there would be no tit-for-tat response to Russian actions, and the British ambassador to Russia emphasizes that relations remain positive. Yet if political tensions between the two countries are not resolved in the near future, even economic cooperation may suffer the consequences of increased hostilities.