Ownership-Based Exposure
When a supplier isn't on a list, but their owner is — walking the ownership chain to find indirect risk.
List-based exposure catches the named entity. But sanctions and trade-control regimes routinely reach further: a clean-looking supplier can still be controlled, owned, or financed by a party that isn't. Ownership-based exposure is the family of exposures Altana surfaces by walking the ownership chain of the companies in your supply chain. The starting point is the canonical company; the engine is the chain of parents and ultimate owners above it.
Direct and indirect risk
Direct risk is when the supplier itself appears on a list or in a flagged location. Indirect risk is when the supplier is connected to a flagged entity through ownership, subsidiary, or upstream relationships. A 100% subsidiary of a sanctioned parent inherits the sanction; a joint venture with a 60% sanctioned owner inherits it under the OFAC 50% Rule. The supplier may not appear on any list of its own.
Indirect risk is the reason ownership chains matter for compliance. A supplier that looks fine on a one-line review can carry indirect risk that only becomes visible by tracing parents up to the Global Ultimate Owner.
The OFAC 50% Rule
The OFAC 50% Rule is the load-bearing example. Under the rule, any entity owned 50% or more — directly, indirectly, individually, or in aggregate — by one or more sanctioned parties is itself blocked, even if the entity is not named on a list. The aggregate piece is critical: two 30% stakes by two different sanctioned parties combine to a 60% blocking interest. Altana applies the 50% Rule against the supplier's ownership chain, surfaces the matching parents, and shows the aggregate calculation that produced the flag.
FEOC and other ownership-driven regimes
A Foreign Entity of Concern (FEOC) is a status from the U.S. Inflation Reduction Act's 45X program: tax credits are disallowed if a supplier is owned or controlled by a designated foreign entity of concern, even when the supplier itself appears clean. Similar control thresholds drive foreign-investment review regimes, defense-procurement rules, and an expanding set of national-security designations across the U.S., EU, UK, and Canada.
Each regime sets its own ownership threshold — 25% for many foreign-influenced-entity rules, 50% for OFAC blocking, custom values for sector-specific designations. Altana lets you set the threshold per overlay so the same ownership data can drive different regulatory questions without you re-modeling the chain each time.
Walking the ownership chain
Altana traces ownership up to nine tiers above a canonical company (an ownership tier being one hop in the parent-of-parent chain, distinct from the supply-chain tier you'd use to describe a tier 1 vs. tier 2 supplier). At each hop, you see the percentage stake, whether the relationship is direct or indirect, and whether the source data enumerates the full chain. Beneficial ownership rolls these up into the people or entities that ultimately benefit from or control the supplier, surfaced alongside named owners and ownership groups.
State-owned entities and adjacent flags
A state-owned entity (SOE) flag attaches to an owner that is wholly or majority-owned by a government. SOE filters are a common starting point for FEOC reviews and for foreign-investment-screening questions: you scan for suppliers whose ownership chains terminate in, or pass through, a state of concern. SOE is one of several ownership-derived flags Altana surfaces alongside the named-party matches.
How you'll see this in Altana
- Open a supplier in Company profile and walk the ownership chain in the ownership view. Direct stakes, aggregate indirect stakes, and SOE flags are surfaced at each tier.
- Set ownership thresholds per overlay or per regulatory regime in Settings — 25% for FEOC, 50% for OFAC blocking, or any value your compliance program requires.
- Ownership-based exposures appear on the same exposure status workflow as list-based exposures: Unassessed → In review → Of concern → Cleared.
- Sub-tier exposure runs the same engine on your value chain. When a tier 3 supplier is indirectly owned by a sanctioned party, Altana surfaces the exposure on the affected product's value chain — not only on the supplier in isolation.
Key terms
- Direct risk
- The supplier itself appears on a list or in a flagged location.
- Indirect risk
- The supplier is connected to a flagged entity through ownership, subsidiary, or upstream-supply relationships.
- OFAC 50% Rule
- The U.S. Office of Foreign Assets Control rule that blocks any entity owned 50% or more — directly, indirectly, individually, or in aggregate — by one or more sanctioned parties, even when the entity is not named on a list.
- Foreign Entity of Concern (FEOC)
- A status from the U.S. Inflation Reduction Act's 45X program disqualifying tax credits when a supplier is owned or controlled by a designated foreign entity of concern.
- Ownership threshold
- The percentage of ownership at which a relationship becomes material to a regulatory question — 25% for many foreign-influenced-entity rules, 50% for OFAC blocking, custom values for sector-specific designations.
- Ownership tier
- One hop in a company's parent-of-parent chain. Distinct from supply-chain tier. Altana traces up to nine tiers.
- Beneficial ownership
- The people or entities that ultimately benefit from or exercise control over a company, surfaced alongside named owners and ownership groups.
- State-owned entity (SOE)
- A company wholly or majority-owned by a government. A common starting point for foreign-entity-of-concern and foreign-investment reviews.