The People’s Bank of Sri Lanka has been blacklisted by the Economic and Commercial Office of the Chinese Embassy in Sri Lanka for failing to make the payment according to the Letter of Credit.
This information has 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 People’s Bank of Sri Lanka in international trade with Sri Lanka.
In recent weeks, 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.
Ignoring the contract, 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, sources said.
According to the contracts terms, payment should be made by means of a Letter of Credit established through the People’s Bank of Sri Lanka upon submission of all the required documents.
There is a dispute about the organic fertiliser import between Sri Lanka and China. This week, Sri Lankan Prime Minister Mahinda Rajapaksa informed the Chinese Ambassador in Sri Lanka that the organic fertilizer shipment sent by the Qingdao Seawin Biotech Group will not be accepted.
This was conveyed during a meeting with the Prime Minister and the Chinese Ambassador.
The Chinese authorities were informed that the shipment would be accepted only after it was taken back to China and reproduced to meet specifications required by Sri Lanka.