Cross-Border Registration and Continued Due Diligence: The Case of Chen Mingfu

Written by Alex Bate

May 22, 2020

In January 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Chen Mingfu, a Chinese national, and his Hong Kong-based company, Anhui Land Group Co. Ltd for allegedly supporting Iran’s ballistic missile program. A year later, we found that Chen Mingfu’s network, which spanned Iran, the United Arab Emirates, Hong Kong, and China, remained active and potentially involved in sanctions evasion.

But even after sanctions are put in place, individuals can transfer assets and appoint associates, highlighting the importance of continued due diligence. We took another look at Chen’s network and found that although Anhui Land Group closed in February 2016, public records reveal that Chen Mingfu and his associates are still active through related companies operating in the IT industry.

 

Chen Mingfu and Tianchang Ocean

Public records show that Chen Mingfu is still a shareholder of a mainland Chinese company which shares a name previously associated with Anhui Land Group. The mainland company has, in the past, transported goods to Iran.

From 2012 to 2013, sanctioned entity Anhui Land Group was registered under the English name “China Mabrooka Trading Co., Limited” and the Chinese name 天長遠洋貿易有限公司, which translates to “Tianchang Ocean Trading Co. Ltd.” Anhui Land Group shared its former Chinese name—in simplified characters—with an active company based in Tianchang, Anhui Province, China that has not been sanctioned. An individual named Chen Mingfu is currently a 40 percent shareholder and supervisor of this company. Additionally, commercial trade records indicate that in 2015, this company transported goods to Iran from Anhui Province related to machinery and mechanical appliances or parts for pumps.

Through their name match, association with Iran, and common ownership, the now-defunct Hong Kong-registered Anhui Land Group and the currently active, China-registered Tianchang Ocean Trading appear to be associated companies.

But beyond these companies, Chen Mingfu is also associated with an international IT and telecommunications company registered in both Hong Kong and China.

 

A Pattern of Dual Registration Across Hong Kong and China

Following leads of shared identifiers, we found two other companies—both called Tianchang Advance Telecommunication Co.—registered in Hong Kong and mainland China with ties to Chen Mingfu. The Hong Kong entity is now closed, while the other in Tianchang is still active.

First, the China-based Tianchang Ocean—of which Chen Mingfu is a 40 percent shareholder— lists an email address on its annual return: tc_ocean@163.com.

 

Fig 1. A 2018 annual return for Tianchang Ocean Trading Co. Ltd. filed with China’s National Enterprise Credit Information Publicity System (NECIPS), listing tc_ocean@163.com as the company’s email address.

 

This email address is also listed as the contact email for two China-based IT services companies: Data Flux and Tian Telecom.

Fig 2. Left: A snapshot of Dataflux’s website listing tc.ocean@163.com as the company’s email address. Right: A snapshot of Tian Telecom’s website listing tc_ocean@163.com as the company’s email address.

 

On its contact page, Data Flux lists the name “Tianchang Advance Telecommunication Co. Ltd.,” indicating that perhaps Data Flux is a trade name for Tianchang Advance Telecommunication.

A company named Tianchang Advance Telecommunication was registered in Hong Kong until it closed in 2019. However, a company by the same Chinese name remains active in mainland China.

 

Fig 3. Left: Application for Deregistration filed with Hong Kong’s Companies Registry for Tianchang Advance Telecommunication Co., Limited. Right: An annual return from 2017 filed with NECIPS for Tianchang Advanced Telecommunication Co., Ltd in China. Both companies share the exact same name in simplified Chinese characters.

 

Additionally, the address listed for Tianchang Advance Telecommunication in mainland China matches the address on the Tian Telecom and Dataflux websites. Chen Songlin, who is a co-shareholder along with Chen Mingfu of the still-active mainland China company, Tianchang Ocean, is also the supervisor of Tianchang Advance Telecommunication in Tianchang, China.

Both Tianchang Advance Telecommunication and Tianchang Ocean had related companies registered in Hong Kong that have closed—but their mainland Chinese counterparts continue to operate.

 

Conclusion

Four years have passed since OFAC sanctioned Chen Mingfu and his company, Anhui Land Group. However, as public records demonstrate, his network is still very much active. While it is unclear if Chen Mingfu’s network maintains direct ties to Iran, other companies and individuals associated with him—such as those identified in this investigation—could be at high risk for sanctions evasion. As this case demonstrates, sanctions investigators and due diligence professionals should use public records to periodically review sanctioned entities in order to uncover other lesser-known avenues of potential risk.

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