Preshipment Inspection

Category: International Trade Sub-category: Export Import Procedures
Document type: article

Preshipment Inspection
This practice is used by the governments of the developing countries. Under Preshipment Inspection private companies, specially expertise for the purpose, are employed for checking details of the shipment. These details include the price, quantity and most importantly the quality of the goods being transported by seas. Preshipment Inspection is used for protecting the financial interests of the developing countries. It thus helps in preventing capital flights, commercial frauds, and customs duty evasion and to helping them in making up for their inadequate administrative infrastructures.

The Preshipment Inspection Agreement recognizes that GATT principles and obligations apply to the activities of preshipment inspection agencies mandated by governments. According to the Preshipment Inspection Agreement the governments ousing the practice of preshipment inspection are obliged to be non discriminatory and transparent. They should avoid unreasonable and unnecessary delays and make the use of specific guidelines for conducting price verification ,protect confidential business information and avoid conflicts of inspection that may arise among the various inspection agencies.

The exporting members are also obliged in a number of ways to the countries that use this practice. They are supposed to be non discriminatory in the application of domestic laws and regulations. They should publish theses laws and regulations promptly. They should provide technical assistance to the requesting countrires.

The agreement establishes an independent review procedure. This is administered jointly by the International Federation of Inspection Agencies (IFIA), representing inspection agencies, and the International Chamber of Commerce (ICC), representing exporters. Its purpose is to resolve disputes between an exporter and an inspection agency.