War Without End: Russia’s Shadow Warfare

A CEPA study by Andrei Soldatov and Irina Borogan argues that Russia’s use of sabotage, cyber operations, assassinations, trans‑national repression and hostage diplomacy constitutes a systemic “shadow warfare” rooted in a neo‑Stalinist doctrine that fuses domestic repression with global coercion, rewards risk‑taking, and treats exposure as strategic proof of reach rather than failure. The authors warn this governance structure lacks empirical discipline and therefore naturally favors escalation, meaning persistent low‑intensity attacks across Europe—on infrastructure, industry (including confirmed plots against defense contractors), political bodies and exile communities—are likely to continue. Western naming‑and‑shaming has limited deterrent value unless paired with concrete measures that raise logistical, financial and legal costs; absent such a response the paper sees heightened geopolitical tail‑risk for European stability, supply chains and corporate assets, and a likely sustained uplift in defense spending and targeted security exposures that investors should price in. Effective mitigation, the authors argue, will require coercive deterrence that imposes strategic costs on the Kremlin rather than solely public attribution.

Analysis

CEPA researchers Andrei Soldatov and Irina Borogan document that Russia’s ‘‘shadow warfare’’ is a systemic, ideologically driven instrument of statecraft rather than ad‑hoc operations, combining sabotage, cyber and information operations, transnational repression, assassinations and hostage diplomacy. The report cites concrete manifestations: sabotage linked to Russia in 15 countries, a foiled spring‑2024 plot against Rheinmetall, the February‑2024 assassination of defector Maxim Kuzminov in Spain, and an expanded GRU sabotage apparatus (SSD and unit 29155) coordinated with FSB Fifth Service activity.

Operationally, Moscow rewards risk‑taking, treats exposure as a political signal, and has shifted recruitment toward veterans, proxies and local recruits to increase deniability; the paper argues Western “naming and shaming” deters only when paired with measures that raise logistics, finance and legal costs (export controls, visa frictions, asset seizures). The authors also highlight institutional continuity at the top and the normalization of hostage trading (citing Brittney Griner, Marc Fogel and Evan Gershkovich swaps) as leverage.

Investment implications are heightened tail risk for European infrastructure, defense supply chains and corporate assets, a structural uplift in demand for defense and cybersecurity products, and potential volatility tied to Western deterrence policies; market moves will be sensitive to confirmed sabotage incidents, sanctions/controls and major prisoner‑swap or escalation events.

Key Decisions for Investors

• Reprice tail risk for European industrials, logistics and infrastructure operators (Germany, Poland, UK) and increase scenario stress tests for sabotage and supply‑chain outages
• Increase selective exposure to defense primes, cybersecurity vendors and security services likely to benefit from sustained defense spending and corporate resilience budgets, subject to due diligence on contract pipelines
• Avoid or hedge material single‑site or single‑supplier exposures in high‑target jurisdictions unless robust mitigation and political‑risk insurance are in place
• Monitor policy catalysts — export controls, targeted sanctions, asset seizures, visa restrictions and prisoner‑swap developments — and trim positions on concrete deterrence escalations that raise operating costs
• Implement political‑risk hedges and operational mitigants (options, insurance, shorten inventory lead times) for assets with outsized disruption risk
• Maintain conservative position sizing and pre‑defined exit or hedge triggers tied to confirmed state‑attributed sabotage events, major foiled assassination plots or rapid broadening of sanctions