This was confirmed exclusively to News 1st by the Chinese Embassy in Sri Lanka on Friday (29).
The decision has also been submitted to the Ministry of Commerce of China.
All Chinese enterprises are reminded to tighten risk control and avoid accepting L/C issued by the People’s Bank of Sri Lanka in international trade with Sri Lanka, said the Embassy.
Recently, the Chinese fertilizer enterprise Qingdao Seawin Biotech Group Co., Ltd requested to get the payment of L/C by People’s Bank of Sri Lanka according to the contracts.
Disregarding the contract obligation, the business rules and international trade customs, the People’s Bank of Sri Lanka defaulted the payment of L/C and caused huge losses to the Chinese enterprise, said the Chinese Embassy.
According to the terms of the contract, payment shall be made by means of an Irrevocable and non-transferable Letter of Credit established through the People’s Bank of Sri Lanka upon submission of all the required documents: 75% of the contract value based on the quantity shipped as per the Bill of Lading and the quantity stated in the Commercial Invoice, and the remaining 25% on a final acceptance certificate issued by the purchaser to the Bank confirming delivery of the quantity of fertilizers in complete conformity with the specifications.
However, Organic Fertilizer samples from China’s Qingdao Seawin Biotech Group Co., Ltd. tested for the presence of harmful pathogens, not once, by twice in tests carried out by Sri Lanka’s National Plant Quarantine Service.
Sri Lanka’s Agriculture Minister Mahindananda Aluthgamage on Wednesday (27) stressed that the Chinese Organic Fertilizer, already en-route to Sri Lanka, will NOT be re-tested under any circumstance.
Sri Lanka’s Agriculture Ministry not only rejected the Chinese Fertilizer, but also went to the extent of issuing an order to deny entry to the ship carrying the consignment from entering Sri Lankan ports.
Against this backdrop, the Sri Lanka’s State Fertilizer Companies obtained an Enjoining Order against the Chinese company, Qingdao Seawin Biotech, its local agent and the People’s Bank.
The order has prevented the People’s Bank from making any payment under a Letter of Credit opened in favour of the Qingdao Seawin Biotech Group Company Ltd.
On the 17th of September Sri Lanka’s Minister of Agriculture confirmed for the first time that a microorganism identified as ‘Erwinia’ was discovered in samples brought down to Sri Lanka from Qingdao Seawin Biotech Group Co., Ltd.
On September 29th, Sri Lanka’s Agriculture Minister Mahindananda Aluthgamage announced the suspension of organic fertilizer imports from China.
This was after Director-General of Agriculture Dr. Ajantha De Silva on 28th September confirmed that Harmful Bacteria was detected in a fresh sample (2nd batch) of Chinese Organic Fertilizer.
It was after these developments that the Ceylon Fertilizer Company Limited had got a court order to block payment to Qingdao Seawin Biotech over the shipment of organic fertilizer which was contaminated.