Trade Articles - Shipment Inspection

Shipment inspections are independent assessments carried out before or after shipment. It is known as either pre-shipment or post-shipment and offers invaluable tool to protect importers from the risks of International trade. The assessment is based on inspection of the goods, to check whether or not the expected goods matches with the purchase order and the contractual requirements. It is carried out by contracted private organizations.

Necessary of Pre-Shipment Inspections
Pre-shipment inspection is required when the government of the importing country makes it mandatory. The arguments of the government are as follows:

To ensure that the price charged by the exporter reflects the correct value of the goods.
To prevent substandard goods from entering the country.
To deflect attempts to avoid the payment of customs duties.

Note:-
- Zanzibar, a region within Tanzania, requires separate pre-shipment inspection.
- Mexico requires pre-shipment inspection for goods that do not qualify NAFTA and goods shipped from many Southeast Asian countries.
- Saudi Arabia require "certificate of conformity" for some very specific products.
- Most countries on this list request inspections for all imported products, regardless of value.

Arranging Pre-Shipment Inspections
The importer arranges the pre-shipment inspections. The exporter make the goods available for inspection in the country of origin. Any delay in the inspection process may lead to problems with the shipment and/or increased costs for the exporter. Hence, it is better for the exporter to work with the freight forwarder in order to ensure that all information is accurate and is provided to the inspection company immediately after notification of the requested inspection.

Usually, after receiving a copy of the inspection order from the importing country, the inspection company starts the inspection process. The inspection order states the value of goods, the name and the address of importer and exporter, the country of supply and the importer's declaration of customs code.

The different steps involved in the inspection process are as given below:

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

Note :- In case the goods reach the border of the importing country without inspection, then it is usually re-exported to the nearby country where the inspection can be done prior to re-entry.