By Guy Faulconbridge and Dmitry Antonov

LONDON/MOSCOW (Reuters) – Britain urged Russian President Vladimir Putin on Monday to “step back from the brink” over Ukraine, warning that any incursion would trigger sanctions against companies and people with close links to the Kremlin.

The United States and Britain are trying to signal to Putin that Russia’s richest men, who have huge assets abroad, will face punishment if he orders troops to invade Ukraine, though Moscow has repeatedly denied that it wants a war with its fellow former Soviet neighbour.

The United States and its allies have prepared a list of Russian elites in or near Putin’s inner circle to hit with economic sanctions should Russia invade Ukraine, a senior administration official said on Monday.

Kremlin spokesman Dmitry Peskov said the threat of such measures would amount to an attack on Russian businesses that would backfire because it would end up hurting British companies and Western shareholders.

“It’s not often you see or hear such direct threats to attack business,” Peskov said. “An attack by a given country on Russian business implies retaliatory measures, and these measures will be formulated based on our interests if necessary.”

Since the break-up of the Soviet Union in 1991, London has become the pre-eminent global centre for a vast outflow of money from former Soviet republics.

Opponents of Putin have repeatedly called on the West to get tough How Western economic sanctions might target Russia on Russian money, though oligarchs and Russian officials continue to flaunt their wealth at Europe’s most luxurious destinations.

Ukraine welcomed Britain’s tough talk on sanctions, saying it was an important way of deterring rash decisions by Russia’s elite.

“When Russian dignitaries realize that they are talking about their assets, real estate and money abroad, where they – the patriots of Russia – keep them, the hotheads in the Kremlin will cool down,” Ukrainian Foreign Minister Dmytro Kuleba said.

Still, sanctions lists show that Europe’s biggest military powers, Britain and France, continue to take a softer line on Russia’s business elite than the United States.

In 2014, for example, the United States slapped sanctions on Igor Sechin, CEO of Rosneft, Russia’s largest oil producer. The EU and Britain have not sanctioned Sechin, one of the most powerful men in Putin’s Russia.

‘STEP BACK’

British Prime Minister Boris Johnson, who is grappling with a domestic outcry over Downing Street parties during COVID lockdowns, is due to travel to Ukraine this week and will also speak to Putin by telephone later on Monday.

“What I will say to President Putin, as I’ve said before, is that I think we really all need to step back from the brink, and I think Russia needs to step back from the brink,” Johnson told reporters.

The United States, the European Union and Britain have said Russia may try to attack Ukraine after gathering tens of thousands of troops near the border.

Russia denies any such plan and is demanding security guarantees including a promise by NATO never to let Kyiv join the alliance. Russian officials say the West is gripped by Russophobia and has no right to lecture Moscow on how to act after NATO’s intake of central and eastern European countries as members, closer to Russia, since the Cold War ended.

The United States has developed specific sanctions packages for both Russian elites who meet the criteria and their family members, and these efforts are being pursued in coordination with U.S. allies and partners, the senior U.S. official said.

“The individuals we have identified are in or near the inner circles of the Kremlin and play a role in government decision making or are at a minimum complicit in the Kremlin’s destabilizing behavior,” said the senior administration official, also speaking on condition of anonymity.

The British government will change sanctions regulations to broaden the scope of measures it can apply to Russia to try to deter aggression towards Ukraine, Foreign Secretary Liz Truss said on Sunday.

She said London should be able to target “any company of interest to the Kremlin and the regime in Russia” and that “there would be nowhere to hide for Putin’s oligarchs”. Truss will outline her approach later on Monday.

Britain has imposed sanctions on about 180 people and 48 entities since Russia annexed Crimea form Ukraine in 2014. https://www.gov.uk/government/publications/the-uk-sanctions-list

On the sanctions list are six people Britain says are close to Putin: businessmen Yuri Kovalchuk, Arkady Rotenberg and Nikolai Shamalov, former KGB officer Sergei Chemezov, Russian Security Council Secretary Nikolai Patrushev and Federal Security Service (FSB) chief Alexander Bortnikov.

The sanctions allow Britain to freeze individual assets and ban individual from entering the United Kingdom.

(Reporting by Guy Faulconbridge, William James and Dmitry Antonov; editing by Michael Holden, Timothy Heritage and Mark Heinrich)

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