Pre-Shipment
Inspection
You've just
received notification that an
inspection of your pending
shipment will be required.
What is going on? Why
me? This article deals
with what can be a difficult
and perplexing problem.
Over the year's, the stories
of Inspection Services have
been varied. Countless
inspections have been
undertaken without problems.
However, a client of the
Ypsilanti U. S. Export
Assistance Center actually had
their invoice value increased
with the inspection service
insinuating that they were
dumping. The increase in
value resulted in their losing
the sale to the in-country
competition in Indonesia who
was now able to undercut their
competitive price advantage
gained by economy of scale in
manufacturing.
When is pre-shipment
inspection required?
Pre-shipment inspections
are required when mandated by
the government of the
importing country. These
governments argue that
pre-shipment inspections are
necessary in order to ensure
that the price charged by the
exporter reflects the true
value of the goods, to prevent
substandard goods from
entering their country and to
deflect attempts to avoid the
payment of customs duties.
The following countries
currently require or request
pre-shipment inspections:
|
Argentina
|
Ethiopia |
Paraguay |
|
Bangladesh
|
Ghana
|
Peru |
|
Benin
|
Guinea
|
Philippines
|
|
Bolivia
|
Ivory
Coast
|
Rwanda
|
|
Burkina
Faso
|
India
|
Senegal
|
|
Bumndi
|
Indonesia
|
Sierra
Leone
|
|
Cambodia
|
Kenya
|
Somalia
|
|
Cameroon
|
Liberia
|
Suriname
|
|
Central
African Republic
|
Madagascar
|
Tanzania
|
|
Colombia
|
Malawi
|
Togo
|
|
Comoros
|
Mali
|
Uganda
|
|
Republic
of Congo
|
Mauritania
|
Uzbekistan
|
|
Democratic
Republic of Congo
|
Mexico
|
Zambia
|
|
Fauador
|
Mozambique |
Zanzibar
|
|
Equatorial
Guinea
|
Nigeria |
Zimbabwe
|
Zanzibar, although a region
within Tanzania, requires a
pre-shipment inspection
separate from Tanzania. PSIs
for Zanzibar are performed by
SGS.
Mexico does require a PSI for
a variety of goods that do not
qualify for NAFTA such as
shoes, textiles, steel, and
bicycles. Goods of a certain
origin for example, from many
Southeast Asian countries-
also require the preshipment
inspection.
Saudi Arabia does require a
"certificate of
conformity" for some very
specific products. The
process, however, is not
called a pre-shipment
inspection, although the
products are tested by the
company Intertek. Equatorial
Guinea requires an inspection,
but not a pre-shipment
inspection in the U.S.
Most countries on this list
request inspections for all
imported products, regardless
of value. In some instances,
however, inspections are only
necessary for shipments over a
certain value.
Who carries out the
inspection and who pays?
- Pre-shipment inspections
are performed by
contracted private
organizations. In most
cases, importers can
select from a short list
of organizations when
planning inspections.
However, it is important
to note that in certain
cases only one company is
sanctioned to carry out
inspections for that
country. The following is
a list of the most widely
used private inspection
companies:
Bureau Veritas, Miami, FL
Tel: (305) 593-7878
Countries: Paraguay,
Benin, Ghana, Madagascar,
Nigeria, Sierra Leone,
& Argentina
SGS, New York, NY
- Tel: (212) 482-8700
Countries: Senegal,
Cambodia, Ethiopia,
Mauritania, Burkina Faso
& Philippines
Intertek, Miami FL
Tel: (305) 513-3000
Countries: Uganda, Ghana,
Mozambique & Nigeria
Cotecna, Miami, FL
Tel: (305) 828-8141
Countries: Tanzania,
Comoros & Niger
The exporter is not
required to pay for
inspections. In some
countries, such as Ecuador
and Peru, the importer
pays, while in other
markets, such as
Argentina, the government
absorbs all costs.
Who is responsible for
arranging the inspection and
what is the process?
the importer is responsible
for arranging the pre-shipment
inspection, the exporter must
make the goods available for
inspection in the country of
origin. Delays in the process
can lead to problems with the
shipment and/or increased
costs for the exporter.
Therefore, it is in the best
interest of the exporter to
work with their freight
forwarder to ensure that all
information is accurate and is
provided to the inspection
company immediately after
notification of the requested
inspection. Requirements for
pre-shipment inspections are
sometimes spelled out in
Letters of Credit or other
documents.
Generally, the inspection
company starts the inspection
process once it receives a
copy of the inspection order
from the importing country. An
inspection order states the
value of goods, the name and
address of the importer and
the exporter, the country of
supply and the importer's
declaration of customs code.
The inspection company then
contacts the exporter to
arrange an inspection site and
time.
The steps of the inspection
process are usually as
follows:
- The importer opens an
import license.
- The importer informs the
inspection service in the
country of import of a
pending shipment, and then
either pays for the
inspection up front or
pays a percentage based on
the value of the
commercial invoice,
depending on the terms of
the importing country's
inspection contract.
- An inspection order is
forwarded to the
inspection company office
in the country of export.
- The inspection company
contacts the exporter to
arrange date, time and
location for inspection.
- The inspection is
carried out, and a
"Clean Report of
Findings," is issued
confirming the shipment's
value, customs
classification and that it
can be cleared.
The goods are shipped
onward to the importing
country, and the importer uses
the inspection report to get
goods released from customs.
If the goods should reach the
border of the importing
country without inspection,
they usually have to be
re-exported to a nearby
country where the inspection
takes place prior to re-entry.
What should I do if a
problem or disagreement arises
with the pre-shipment
inspection?
If a disagreement arises on
the findings of the
pre-shipment inspection,
discuss the discrepancy with
the inspection company. If
exporting to a World Trade
Organization (WTO) member
country, the WTO Agreement on
Pre-shipment Inspection spells
out the responsibilities of
the exporter and the conduct
of the inspection company. The
Agreement requires the
inspection company to appoint
an appeals official and comply
with the Agreement guidelines
when carrying out their
pre-shipment inspection
services for signatory
countries Detailed
information on the Agreement
is available online (www.mac.doc.gov/tcc)
or by contacting the Office of
Multilateral Affairs at Tel:
(202) 482-0603.
Are there additional
certification inspections that
deal with agricultural and
food products?
Several agencies within the
U.S. Department of Agriculture
provide inspection services
when certificates are required
to clear imported agricultural
and food products through
overseas customs. Sanitary and
phyto-sanitary certificates
for animal, plant and food
products, which are normally
issued to protect U.S.
consumers, can be used for
international trade purposes.
The Federal Grain Inspection
Service (FGIS) conducts
mandatory inspections of rice,
peas, beans, lentils, all
grains, and grain-based
processed products. Please
note that inspections are
mandatory for all exported
grain products. For more
information, please contact
FGIS at Tel: (301) 734-8537 or
view their URL: http://www.usda.gov/gipsa/.
The Animal and Plant Health
Inspection Service (APHIS)
conducts inspections to
certify that no pests or mites
are present in certain
products, such as fruits,
vegetables, plants, seeds,
lumber and logs. For
additional information or
questions, APHIS can be
reached at Tel: (202) 720-0252
or view their URL: http://www.aphis.usda.gov/.
Where can I go for more
information on pre-shipment
inspections?
For updated information on
the pre-inspection
requirements by country,
contact the Trade Information
Center at 1-800-USA-TRAD(E) or
visit the TIC's website (http://tradeinfo.doc.gov.)
More specific information
about the pre-shipment
inspection companies and their
procedures is available
online:
You may also contact any
office of the US
Commercial Service.
Date Updated: March 27, 2007
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