A great example of the combined arms effects of kinetic and cyber conflict, aka, war, is that we now see Western corporations with a presence in Russia dealing with the increased risk of having their assets taken over or nationalized.

This heightened risk arises from the mounting geopolitical discord between Moscow and Western nations, notably due to Russia’s aggressive stance towards Ukraine. As a countermeasure to Western sanctions that have immobilized Russian assets in Western banks, Russia is crafting laws to target specific Western businesses.

These businesses are labeled either as “unfriendly” or “naughty,” though Moscow hasn’t outlined clear guidelines for these classifications. Moscow’s objective is to exert financial leverage over the West, especially since it cannot directly access or take control of Western governmental assets. Russia’s strategy capitalizes on the tough choice faced by Western companies: remain and face possible sanctions or leave, which might earn commendations from the West but result in financial losses.

While seeking legal remedies might seem viable for Western businesses, the process is both expensive and unpredictable. These corporations might contemplate negotiating with their home governments to gain reimbursements from the immobilized Russian assets or the assets that were confiscated. Russia’s tactics could, over time, discourage Western enterprises from channeling investments into Russia, leading to potential economic isolationism. To shield themselves from economic disturbances, nations wary of Western sanctions might consider limiting the entry of Western businesses.

The escalating geopolitical friction makes it likelier for Russia to single out Western businesses for repercussions. Moscow’s legislative moves highlight its expectations of these companies retracting from the Russian landscape and the consequential requirement for legal mechanisms to cushion its economy. Moscow’s stance suggests they’ll be willing to label businesses as “unfriendly” or “naughty” based on their support for Ukraine or criticism of Russia.

This strategic move by Russia places Western corporations in a quandary. Moscow bets that these companies will prioritize the lucrative Russian market over aligning with Western geopolitical views on Russia. For those choosing to stay, their recourses against asset seizures are limited and might require intervention from Western states to mitigate financial losses. A move, no Western state perhaps outside the U.S. would be willing to make due to poor optics and tail-wagging-dog positioning.

The economic tug-of-war between the two sides could further polarize the global market, pressuring companies to take sides based on their stances towards Ukraine or Russia. Inviting further participation by more proxies in a war perceived to be against Russia will be damaging for all who participate.

Despite excessive reporting of Ukrainian victories by biased global media, it is clear that only Russia has been claiming victories in this drama, most of which are psychological.