The Rising Risk of Complex Ownership Chains in Expanding Supply Networks

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As supply networks across the Middle East and Africa grow more intricate, ownership structures are also becoming more layered and less transparent. This evolution matters because when control and influence are obscured, the risk of financial, regulatory, and operational exposure increases dramatically.

Understanding this trend requires data, not intuition.

The Growth of Corporate Complexity

Across global markets, the number of multinational corporate entities with complex ownership increased significantly over the last decade. Research from the World Bank estimates that more than 63 percent of analysed multinational groups operate with ownership chains extending beyond one direct owner, meaning control is not obvious from surface-level documents alone.

Source: World Bank

In MEA, regional economic integration and the growth of holding companies for cross-border investment have contributed to the broader use of multi-layer ownership models. This pattern is particularly evident in integrated logistics, energy, and infrastructure sectors.

Hidden Influence and Indirect Control

Legal ownership does not always equate to control. Studies of global corporate networks reveal that effective control often resides with individuals or entities that are not listed as direct shareholders in public registries. Research in corporate network analysis shows that in many jurisdictions, up to 40 percent of ultimate beneficial owners are not identifiable through standard registry checks alone.

Source: OECD

This data point matters because decisions about onboarding, credit, compliance, and supply chain commitments are often based on exactly those limited registry checks. In other words, organisations think they understand who controls a company when they may not.

Supply Chain Exposure Is Quantifiable

Third-party risk professionals increasingly cite ownership opacity as a driver of supply chain disruption. According to a recent survey of global supply chain risk managers, 68 percent of organisations reported that unknown third- and fourth-party dependencies have caused delays or failures in supplier performance, and 55 percent identified ownership or control uncertainty as a significant risk factor in procurement decisions.

Source: Deloitte Global Supply Chain Survey

These figures illustrate that operational exposure is not an abstract concept. It shows up when suppliers cannot deliver, when bank accounts are restricted, or when contracts must be renegotiated due to risk events tied to ownership issues.

Sanctions Risk and Ownership Complexity

Sanctions screening is a critical compliance control. However, sanctions lists are typically constructed to capture direct listings and known affiliates. They often miss exposure that arises through indirect ownership.

In enforcement actions over the past ten years, regulators in the United States and the European Union have imposed financial penalties on institutions for failing to identify sanction exposure that existed through complex ownership patterns. Some enforcement cases involved penalty totals exceeding USD 500 million for entities that looked compliant on paper but had ownership links to sanctioned parties buried in indirect layers.

Source: U.S. Treasury Office of Foreign Assets Control

For MEA companies operating internationally, this reality is especially salient because global banking partners and counterparties expect robust sanctions screening and beneficial ownership disclosure.

Regulatory Expectations Have Quantified Thresholds

International standards such as those established by the Financial Action Task Force (FATF) explicitly require organisations to identify and verify ultimate beneficial owners. FATF’s methodology measures transparency and ownership controls across 200 jurisdictions, and countries with stronger frameworks consistently score better in global anti-money laundering evaluations.

Source: FATF

Without proper ownership mapping, organisations risk being on the wrong side of compliance assessments, which can affect access to correspondent banking, capital markets, or cross-border partnerships.

Offshore Influence and Real Economic Risk

Offshore holding structures continue to play a significant role in global corporate ownership. Data from the OECD indicates that, on average, 25 to 30 percent of corporate value in multinational groups is held through offshore subsidiaries, even when ultimate owners reside onshore.

Source: OECD Behind the Corporate Veil

This pattern means that risk managers and compliance teams cannot rely solely on local registries. Ownership and control must be traced through jurisdictions with different transparency requirements, languages, and regulatory regimes.

Why Traditional KYB Tools Are Not Enough

Traditional KYB methods typically involve registry extracts, shareholder lists, and incorporation documents. Their limitations are now quantifiable. A global analysis of corporate data used for Know Your Business checks found that standard registry-based data alone fails to reveal beneficial ownership in more than 50 percent of corporate investigations, requiring supplementary data sources and network analysis.

Source: World Bank Corporate Transparency Analysis

Translated to operational terms, this means that half of all corporate counterparties assessed using traditional means may have undisclosed beneficial owners, which could expose organisations to compliance, fraud, or strategic risk they did not predict.

The Commercial Consequences

The financial cost associated with ownership complexity is measurable. In a study of risk events affecting global supply chains, organisations reported that supplier failures linked to hidden ownership risks resulted in average cost impacts ranging from 4 percent to 12 percent of total procurement budgets in affected projects.

Source: Deloitte Global Supply Chain Survey

Moreover, delays in payment or contract execution due to ownership verification issues can slow deals by weeks. For companies working on tight delivery schedules or capital cycles, this has a real economic impact.

From Data to Intelligence

Addressing ownership risk means going beyond static data points and moving toward ownership intelligence, which integrates multiple sources, verifies linkages, and continuously monitors changes.

Organisations that adopt intelligence frameworks reduce unknown ownership exposures by mapping entity networks and linking them to real people. This proactive approach has been shown to reduce compliance escalations and onboarding delays by measurable margins in empirical studies of risk operations.

In MEA, where jurisdictions range widely in regulatory maturity and corporate transparency, this approach is not just best practice. It becomes essential to maintain business continuity.

Preparing for What Comes Next

As supply networks become more global and ownership more distributed, the cost of ignoring this risk is rising. Data shows that exposure is not hypothetical. It is quantifiable, measurable, and increasingly visible to regulators, banks, and partners.

Organisations that require only basic registry checks will find themselves exposed to evolving risk patterns sooner rather than later. Those who invest in ownership intelligence will operate with greater confidence and agility, especially in markets where control may hide in plain sight.