U.S., UK threaten sanctions for Moscow elite if Russia invades Ukraine

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  • Russia has massed troops near Ukraine's borders
  • Johnson will tell Putin to 'step back from the brink'
  • Moscow responds to U.S. proposal

WASHINGTON/LONDON/MOSCOW, Jan 31 (Reuters) - The United States and Britain are prepared to punish Russian elites close to President Vladimir Putin with asset freezes and travel bans if Russia enters Ukraine, Washington and London said on Monday as tensions also spilled over at the United Nations.

Britain urged Putin to "step back from the brink" after the Russian build-up of troops near Ukraine stoked fears of war, and warned any incursion would trigger sanctions against companies and people close to the Kremlin.

"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," White House spokesperson Jen Psaki told reporters.

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British Foreign Secretary Liz Truss said planned legislation will give London new powers to target companies linked to the Russian state.

Kremlin spokesperson Dmitry Peskov called the British warning "very disturbing," saying it made Britain less attractive to investors and would hurt British companies.

"An attack by a given country on Russian business implies retaliatory measures, and these measures will be formulated based on our interests if necessary," Peskov said.

Since the fall of the Soviet Union in 1991, London has become the haven of choice for a river of money from Russia and other former Soviet republics. Transparency advocates have long called on Britain to be tougher about illicit financial flows.

PUBLIC FACE-OFF

Tensions between Russia and the United States were on display at the United Nations Security Council on Monday where the U.S.-requested meeting on Moscow's troop build-up allowed for a public face-off over the crisis.

Russia's U.N. ambassador said there was "no proof" Moscow was planning military action and that Russia had never confirmed the West's assertion that it had amassed 100,000 troops near its neighbor.

Vassily Nebenzia said U.S. talk of war was "provocative," that Russia frequently deployed troops in its own territory, and that Ukraine's crisis was a domestic issue.

"The provocation's from Russia, not from us or other members of this council," U.S. Ambassador to the U.N. Linda Thomas-Greenfield said.

China urged all parties to not aggravate the situation and said it did not view Russia's troops near the border as a threat.

Although Russia, which seized Crimea from Ukraine in 2014 and backs pro-Russian rebels fighting government forces in eastern Ukraine, denies planning further incursion, it is demanding sweeping security guarantees including a promise NATO never admit Ukraine.

It sent a follow-up to a written proposal made by the United States last week, according to the State Department. Washington did not comment on Monday on the content of the response, saying "it would be unproductive to negotiate in public."

Meanwhile, leaders are continuing their diplomatic push with phone calls and meetings to try to defuse the situation.

British Prime Minister Boris Johnson is set travel to Ukraine on Tuesday to meet with Ukraine's President Volodymyr Zelenskiy.

On a call between French President Emmanuel Macron and Putin, the pair said they wanted to maintain a dialogue on implementing the Minsk agreements regarding Donbass, a region of eastern Ukraine where Moscow has backed separatist fighters.

Russian Foreign Minister Sergei Lavrov is expected to speak by phone with U.S. Secretary of State Antony Blinken on Tuesday, a State Department spokesperson said.

RUSSIAN MONEY ABROAD

Opponents of Putin have long urged the West to clamp down on Russian money, though oligarchs and Russian officials continue to flaunt wealth at Europe's most luxurious destinations.

"Putin's cronies will no longer be able to use their spouses or other family members as proxies to evade sanctions," said a senior Biden administration official, speaking on condition of anonymity.

"Sanctions would cut them off from the international financial system and ensure that they and their family members will no longer able to enjoy the perks of parking their money in the West and attending elite Western universities."

Britain has already imposed sanctions on about 180 people and 48 entities since Russia annexed Crimea, including six people it says are close to Putin. The sanctions allow Britain to bar people from entering and to freeze their assets.

The European Union, many of whose members are in NATO, has also threatened "strong political consequences and massive economic costs" for Russia over any new incursion into Ukraine.

Some NATO countries, including the United States and Britain, have sent arms to Ukraine, although they have ruled out sending troops there to fight.

Poland said it had offered neighboring Ukraine tens of thousands of munitions, and was awaiting a reply. The White House on Monday accused Russia of surging troops into Belarus, which is hosting Russian drills and borders both Poland and Ukraine.

Europe's dependence on Russian energy supplies weakens the West's hand, and the United States has asked top gas producer Qatar and other major exporters to study whether they can supply more to Europe.

U.S. President Joe Biden met with Qatar's Emir Sheikh Tamim bin Hamad al-Thani on Monday at the Oval Office and said he planned to designate the Middle Eastern nation a major non-NATO ally.

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Reporting by Steve Holland in Washington, Guy Faulconbridge in London and Dmitry Antonov in Moscow; Additional reporting by William James in London, Michelle Nichols at the UN and Jeff Mason, Humeyra Pamuk and Rami Ayyub in Washington; Writing by Kevin Liffey, Frank Jack Daniel and Costas Pitas; Editing by Toby Chopra, Rosalba O'Brien and Grant McCool

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