It is third time the country has blocked the Joint Investigative Mechanism (JIM) - a joint investigative body by the United Nations and the Organisation for the Prohibition of Chemical Weapons (OPCW) - in a month.
Created in 2015, JIM is responsible for identifying who is responsible for chemical attacks in Syria.
The resolution was brought forward by Japan and would have extended JIM's mandate for 30 days. It was supported by 12 of the 15 council members with Bolivia joining Russia and China abstaining.
The veto also provides an indicator of the continuing decline of US and Russian relations as this is the first Russian veto on a US sponsored bill reflecting the deterioration in US and Russia’s relations.
Britain's UN Ambassador Matthew Rycroft told the council: "We will keep going, not only to bring justice to those who have suffered from the use of these despicable weapons, but also to deter those who might think of doing so in the future."
Russia claims that JIM is biased and has argued that major changes need to be made in order for it to continue while other countries remain adamant that JIM’s independence is paramount.
Russia's UN Ambassador Vassily Nebenzia retorted that the JIM for two years "has rubber-stamped baseless accusations against Syria," stressing that the failure to eradicate its "fundamental flaws" brought about its downfall.
He added: "What is taking place here is akin to a bad theatre production."
US Ambassador Nikki Haley told the council after the vote the veto "shows us that Russia has no interest in finding common ground with the rest of this council to save the JIM."
She added: "Russia will not agree to any mechanism that might shine a spotlight on the use of chemical weapons by its ally, the Syrian regime," she said. "It's as simple and sinful as that."
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