WHAT A PRE-SHIPMENT INSPECTION?

Pre-shipment inspections (PSI) are required when mandated by the government of the importing country. Pre-shipment inspections ensure that the price charged by the exporter reflects the true value of the goods, and therefore prevent substandard goods from entering their country, and mitigate attempts to avoid the payment of customs duties.

WHO CONDUCTS THE PRE-SHIPMENT INSPECTION AND WHO PAYS?

Pre-shipment inspections are typically performed by contracted private organisations. In most cases, importers can select from a short list of these organizations when planning inspections. However, sometimes one firm is appointed to carry out inspections for a given country on an exclusive basis.

Inspection costs are generally paid by the importer, however in some cases, the inspection agency may invoice the seller in the event of supplementary inspection visits.

WHO IS RESPONSIBLE FOR ARRANGING THE PRE-SHIPMENT INSPECTION AND WHAT IS THE PROCESS?

Although the importer is generally 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. It is in the best interest of exporters 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.

The inspection company will only start the inspection process as soon as it receives an inspection notice 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.