The Kremlin on Thursday vowed to retaliate against "unacceptable" new U.S. sanctions against Russia over its alleged role in a nerve agent attack on a former spy in Britain, which prompted the ruble and Russian stocks to tumble.
In contrast, the United States move was warmly welcomed by Downing Street which has consistently blamed Moscow for the attack in March on former Russian spy Sergei Skripal and his daughter Yulia with a military-grade Novichok nerve agent developed by the former Soviet Union.
The State Department's announcement fuelled already worsening investor sentiment about the possible impact of more sanctions on Russian assets and the rouble at one point slid by over one per cent against the dollar, hitting a two-year low, before recouping some of its losses.
In March, former Russian spy Sergei Skripal and his daughter Yulia were found unconscious on a bench in Salisbury, where they lived.
If Moscow does not comply, a second round of sanctions could further downgrade diplomatic relations with Russian Federation. The U.S. said at the time it was the largest expulsion of Russian spies in American history.
The Washington administration earlier said it was imposing sanctions on Russia as of August 22 over Moscow's alleged involvement in the poisoning of former Russian intelligence officer Sergei Skripal and his daughter Yulia in British Salisbury, on March 4.
"On August 8, 2018 our Deputy Chief of Mission was informed in the State Department of new "draconian" sanctions against Russian Federation for far-fetched accusations of using the "Novichok" nerve agent against a United Kingdom citizen", the embassy said in a statement.
Peskov said the sanctions were contrary to the "constructive atmosphere" established during U.S. President Donald Trump's July summit with Putin in Helsinki.
But Congress has been pushing for such a decision and now the state department has confirmed Russia's actions contravened 1991 USA legislation on the use of chemical weapons.
A specialist team member in a police protective suit in Salisbury, England, last month.
The Associated Press also reported that U.S.is going to impose fresh sanctions against Russian Federation.
"Making a linking to these events is for us unacceptable and such restrictions like those passed by the American side earlier. are absolutely illegal and do not correspond to worldwide law", said Peskov. The first, which targets United States exports of sensitive national-security related goods, comes with deep exemptions and numerous items it covers have already been banned by previous restrictions.
A senior State Department official said Wednesday that there could be exceptions.
The UK blames Russia, but the Russian government strongly denies any involvement.
Even as rumors of impending new sanctions swirled in the media, Kentucky Senator Rand Paul - a supporter of Trump's efforts to engage Russia - announced he had delivered a letter from President Trump to Putin during meetings with Russian officials in Moscow earlier this week.
Speaking after the State Department announcement, Royce said the administration was "rightly acting to uphold worldwide bans on the use of chemical weapons".
The UK has consistently blamed Moscow for the attack on the Skripals.
After pressure from Republican members of Congress, the state department has determined Moscow broke worldwide law by using a military-grade chemical weapon on the Skripals.