When is Pre-Shipment Inspection Required?
Pre-shipment inspections (PSI) are required when mandated by the government of the importing country. Governments assert that pre-shipment inspections ensure that the price charged by the exporter reflects the true value of the goods, prevent substandard goods from entering their country, and mitigate attempts to avoid the payment of customs duties.
The following countries currently require or request pre-shipment inspections:
Angola, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Cameroon, Central African Republic, Comoros, Republic of Congo (Brazzaville), Democratic Republic of Congo (Kinshasa), Cote d’Ivoire, Ecuador, Ethiopia, Guinea, India (see note below), Indonesia (see note below), Iran, Kenya (under review), Kingdom of Saudi Arabia, Kuwait (see note below), Liberia, Madagascar, Malawi, Mali, Mauritania, Mexico (see note below), Mozambique, Niger, Senegal, Sierra Leone, Togo, Uzbekistan.
Most countries on the list above request inspections for shipments above a certain value. However, in some instances inspections are necessary for all imported products, regardless of value.
In some cases, a country may require PSIs only for certain types of goods. For example, Kuwait requires PSI for regulated products valued at more than $3,000. Mexico requires a PSI for a variety of goods such as shoes, textiles, steel, and bicycles only if they do not qualify for NAFTA. Shipments to Saudi Arabia and Kuwait must contain a "certificate of conformity" for a small number of products. Though not referred to as a pre-shipment inspection, this certification verifies that the product conforms to the relevant standard by testing and inspecting prior to shipment from the exporting county.
PSI regulations change often and contracts for pre-shipment inspections are reviewed periodically. Exporters can contact the Commerce Department’s Trade Information Center at 1-800-USA-TRAD (E), inspection companies for more information on current regulations.
Who Conducts the Pre-Shipment Inspection
And Who Is Responsible For The Payment?
Pre-shipment inspections are typically performed by conducted government appointed organizations. However, sometimes one firm is appointed to carry out inspections for a given country on an exclusive basis. We can help you to find the appropriate organization for your inspection. Please contact us directly for further questions.
Inspection costs are generally paid either by the importer or exporter based on their agreement. In the costs associated with presenting the goods for inspection (such as unpacking, handling, testing, sampling, and repackaging) are the responsibility of the seller.
Responsibilities of the Pre-Shipment Inspection And The Cost
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. Therefore, it is in the best interest of exporters to work with their customer (importer) 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 exporter. 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.
Additional Certification/Inspection Related to Agricultural and Food Products
Several agencies within the U.S. Department of Agriculture provide inspection services when certificates are required to clear agricultural and food products through overseas customs. Sanitary and phytosanitary certificates, which are normally issued to protect U.S. consumers, can also be used for international trade purposes.
The Federal Grain Inspection Service (FGIS) conducts inspections of grains, pulses, oilseeds, and processed and graded commodities. Export weighing and quality inspection at the time of shipment is mandatory for bulk or bagged grains and oilseeds under the U.S. Grain Standards Act. Per NAFTA, non-waterborne shipments bound for Canada and Mexico are exempt from mandatory inspection.
FGIS is required by law to perform these inspections (for a fee), and they provide the only “official” grain quality and quantity inspections in the United States. However, some contracts may specify that a particular private firm must perform an inspection, as well. For more information about grain inspection, please visit www.gipsa.usda.gov
The Animal and Plant Health Inspection Service (APHIS) assists exporters in meeting the plant quarantine import requirements of foreign countries. They conduct inspections to certify that certain products, such as fruits, vegetables, plants, seeds, grains, and grain products are free from quarantine pests and meet the phytosanitary regulations of the importing country.