People’s Bank removed from China’s blacklist over fertilizer issue

January 11, 2022 at 12:54 PM

The People’s Bank of Sri Lanka has been removed from the blacklist of the Economic and Commercial Office of the Chinese Embassy in Colombo.

The bank was blacklisted in October 2021 after the Government had suspended the importation of organic fertilizer from China-based Qingdao Seawin Biotech Group Co., Ltd in September. 

Announcing the suspension, Minister of Agriculture Mahindananda Aluthgamage said the decision had been taken after tests on samples of the fertilizer had identified harmful bacteria.

At the time the Government had also rejected a new consignment of the fertilizer that was en route from China, denying entry for the transporting vessel to Sri Lanka.

As a result, the People’s Bank of Sri Lanka was blacklisted by the Economic and Commercial Office of the Chinese Embassy in Colombo.

The Embassy said the bank was blacklisted for failing to make the payment according to the Letter of Credit (LOC) and contracts between the two parties causing huge losses to Chinese companies in international trade in Sri Lanka.

Thereafter in December, the Government announced that it has decided to pay US$ 6.7 million to Qingdao Seawin Biotech Group Co., Ltd for its rejected products.

Minister of Agriculture Mahindananda Aluthgamage said the payment includes the deposit of US$ 5 million that was placed by the Chinese firm, while it has been requested to remanufacture the fertilizer to comply with the required standards of the Sri Lanka Standards Institute (SLSI).

On 7th January 2022, the People’s Bank of Sri Lanka announced that it had paid USD 6.9 million to the China-based fertilizer company, Qingdao Seawin Biotech Group Co., Ltd for the losses caused due to Sri Lanka rejecting two of its shipments.

The bank said the payment was made after the Colombo Commercial High Court dissolved the enjoining order preventing the payment on Letter of Credit to Qingdao Seawin Biotech Group Co., Ltd.

The enjoining order in question was dismissed as all parties had agreed for a settlement to ship a new stock of standardized fertilizer despite two previous shipments being rejected by Sri Lanka. (NewsWire)