Pre-Shipment InspectionPresented by:Waqas LiaqatAbubakar AzizSyeda Itrat RizviMuhammad Ali RazaMuhammad Khurram

Pre-shipment inspection(PSI) activities" are allactivities relating tothe verification of thequality, the quantity,the price, includingcurrency exchange rateand financial termsand/or the Customsvaluation andclassification of goodsto be exported to theterritory of the UserGovernment.

PRESHIPMENT INSPECTION

WHY PSI• Companies provides pre-shipment

inspection services to governments as away of protecting import revenues forthemselves and their citizens.

• Governments implement PSIprogrammes to ensure that importscomply with their regulations. Non-compliance with these regulations canresult in:

• The loss of valuable duty and taxrevenue

• The loss of foreign exchange reserves(in countries where exchange controlsexist)

• The importation of substandard orprohibited goods

HOW IT WORKS

• A physical inspection of goods is carriedout pre-shipping, in the country of export,establishing the exact nature of the goods.

• The invoice and other documents are thenscrutinised, and an accurate valuation, andcustoms tariff code, are assigned. Theseare used, in conjunction with the clientcountry's published duty rates, to calculatethe correct duties and taxes payable.

• A certificate is issued to the importer. Thisis used to substantiate the payment of fullduty, prior to clearing the goods.

• The actual duty collected is compared withthe certificates, and any shortages can beinvestigated and corrected.

BENEFITS

• By using our services, you willbenefit from:

• Certification by an internationallyrecognized Conformity Assessmentbody.

• Assurance that your products arecompliant with standards andtechnical regulations.

• Streamline the customs clearance.• Consistent with the rules,

regulations of the importcountries.

The term “user Member” means a Member of which the government or anygovernment body contracts for or mandates the use of preshipment inspectionactivities.

The term “preshipment inspection entity” is any entity contracted or mandatedby a Member to carry out preshipment inspection activities.

"User Government" is a government or government body which contracts for ormandates the use of preshipment inspection activities.

"Preshipment inspection (PSI) activities" are all activities relating to theverification of the quality, the quantity, the price, including currency exchangerate and financial terms and/or the Customs valuation and classification of goodsto be exported to the territory of the User Government.

"IFIA PSI Member" is a company, performing preshipment inspection activitiescontracted or mandated by a User Government, which is a member of IFIA.

"External Expert" is an individual engaged to provide additional resources orexpertise.

"Subcontractor" is another company which is contracted to provide PSI activitiesin a particular geographical area or field of expertise.

TERMS

Non –discrimination User Members shall ensure that PSIactivities:

Objective

Applied on equal basis

Uniform performance of inspection

Governmental Requirements

According to the laws, regulations& requirements

Paragraph 4 of article III of GATT1994

Standard

In the exporting country/ manufacturing country:

Inspection Activities

Issuance of “Clean Report of Findings” or a “Note of non-issuance”

Site of Inspection

International Standards

National Standards

Transparency

Protection of Confidential Information

Ensure that PSI entities:

Maintain procedures for treatinginformation as confidential

Doesn’t share to 3rd Party exceptGovt.

Certain information not to beasked from exporters…..

User members to ensure that PSI entities maintain procedures to

avoid conflict of interest

Conflict of Interest

Delays

User members to ensure that psi

entities avoid unreasonable delays in

inspection of shipments; once fixed,

date to be implemented

report within 5 working days

Give opportunity to exporter for

writing, and arrange re-inspection on

request at earliest

Clean Report of Findings

Prevent over/under invoicing & Fraud.

For comparison verification based on export prices of similar goods from:

same country,

about same time,

under competitive & comparable conditions of sale, etc.

Verification of transport invoicing or fraudationcharges only w.r.t. exporting country

Price Verification

selling price of such goods produced in importing country

price in another country,

cost of production

arbitrary or fictitious prices or values

Aspects not to be used for verification

PSI entities shall establish procedures toconsider grievances raised by exporters as perguidelines:

Designate officials to consider & decide ongrievances

Exporters to give in writing to designatedofficers the nature of grievance, the facts& suggested solution

Designated official to give a sympatheticconsideration & a quick decision

Appeals Procedure

Derogation

Consignments of value less than a minimum value shall not be

inspected

Obligations Of Exporter Members

• Non-discrimination

• Transparency

• Technical Assistance

Independent Review Procedures

• Members to encourage mutual resolving of disputes, but either

party may refer dispute for independent review

(a) Establishes an independent entity.

(b) Independent entity establish list of experts

o Representing preshipment inspection entities

o Representing Exporters

(c) Complaints to IRE to be examined by panel of 3 experts

(d) Independent trade expert will be chairman of the Panel.

(e) Both the parties in dispute to present their views in person or in

writing

(f) Decision to be by majority vote, within 8 days

(g) Decision binding

Notification

• Submit to the Secretariat

copies of Laws & Regulations

• No changes in

laws/regulations

Review • Review to be done at end of

2nd year

• Every 3 years after entry

into force

• Ministerial Conference to

review provisions, operation

& implementation

Consultation & Dispute Settlement

• Article 7

Consultation

• Article 8

Dispute Settlement

• Article 9

Final Provisions requires

Conclusion