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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:

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:

1. The importer opens an import license.
2. 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.
3. An inspection order is forwarded to the inspection company office in the country of export. 
4. The inspection company contacts the exporter to arrange date, time and location for inspection.
5. 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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