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[NB: Error code "-226" is also related to this error (SAP 9.2 Version)]
What is the reason for this error?
Your DI-API installation has a misconfiguration in its 'b1-local-machine.xml' file on the machine that runs the Server-component/B1 Client, or you have not opened ports in the firewall(s).
How to fix it?
First, in the firewall that hosts the 'SAP Server Tools', open inbound firewall ports 30000, 30010, and 40000 [Boyum cannot help with firewall-related issues beyond this text]. If this happens on a workstation, you need to make sure that the ports are open both on the server and the workstation.
Second, log into the System Landscape Directory (SLD), and once logged in, notice the URL (Example: https://myServer:40000/ControlCenter/).
Now go to folder 'C:\Program Files (x86)\SAP\SAP Business One DI API\Conf' (32bit) or 'C:\Program Files\SAP\SAP Business One DI API\Conf'(64bit) and edit 'b1-local-machine.xml' to have the same server and port as the previous noticed URL (Example: https://myServer:40000).
[NB: SLD in some setups use port 40000 instead of 30010]:
If that doesn't help, please check the SAP note https://launchpad.support.sap.com/#/notes/2029714 that mentions the error code, and troubleshoot the steps they have in the list:
Lastly, you can try and clean folders SM_OBS_DLL and SM_OBS_DLL_64 in the following two locations:
And see if that fixes the problem.
Videos how to fix (Part 1 and 2):