Two Chinese companies have filed a lawsuit demanding that a Yonkers-based dietary supplements company pay nearly $500,000 for shipments of ginkgo biloba powder.
Yonkers-based API International Group imports ingredients and resells them to an affiliated company that manufactures dietary supplements for international sales.
On June 28th, China Export and Credit Insurance Corp. (aka Sinosure) and Hefei Reachever Import and Export Ltd., filed a petition in the U.S. District Court, White Plains claiming that API International Group breached a 2019 supply agreement. According to the petition, Sinosure had paid out an insurance claim to Hefei, the company exporting powdered ginkgo extract to API. However, API failed to pay for two shipments, leading an arbitration ruling against the company.
Ginkgo biloba is a herbal supplement believed to provide various health benefits like improved cognitive performance and enhanced blood circulation. Importers of dietary supplements must comply with the purity, strength, and composition requirements set by the U.S. Food and Drug Administration (FDA). The FDA samples imports at U.S. ports to ensure compliance with its standards, although FDA-registered exporters face fewer inspections.
Hefei was unable to meet the FDA’s standards. Despite this, API proceeded with the imports; instructing Hefei to use the name of another FDA-registered exporter to minimize the risk of a spot inspection.
After receiving multiple shipments, API claimed the ginkgo biloba powder was unusable and declined to pay for the imported merchandise. Hefei disputes this claim and a subsequent arbitration ruling sided with Hefei.
The ruling declared that API must pay $473,855 for unpaid shipments, legal fees, and additional expenses. API had then reportedly refused to honor the arbitration ruling. This prompted Hefei and its insurer, Sinosure, to request that the federal court enforce the payment.
The Westchester Business Journal attempted to reach API for comment, but received no reply.
