People’s Bank To Chinese Embassy Blacklist
Posted 31,October

By Chaveendra Dunuwille

In Local News

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On the 29th of October, 2021, the Chinese Embassy in Sri Lanka stated that due to the disregard of business rules and international trade customs, the People’s Bank of Sri Lanka was blacklisted by the Economic & Commercial Office of China. The move by the Chinese authorities was the result of the bank failing to make a payment per the Letter of Credit signed between the two parties. 

Following the outcry of local farmers against the ban of chemical fertilizer, the government began to once again import limited amounts of chemical fertilizer as a temporary solution. One such instance was the import agreement with Chinese Fertilizer Enterprise Qingdao Seawin Biotech Group Co Ltd. 

The agreement stated that 75% of the contract value would be based on the quantity shipped per Bill of Landing, and the remaining 25% was from the final acceptance certificate issued by the purchaser to the bank. Accordingly, the payment was to be made by an irrevocable & non-transferable letter of credit. 

The Sri Lanka National Plant Quarantine Service conducted two tests on the imported fertilizer, which showed that the fertilizer contained harmful pathogens. The Ministry of Agriculture went so far as to issue an order denying the ship carrying the consignment entry into Sri Lankan ports. This resulted in the bank being unable to make the payment which resulted in the subsequent blacklisting. 

However, Minister of Agriculture Mahindananda Aluthgamage stated on the 27th that the shipment is en route and no further tests will be conducted.