Agreement on Preshipment Inspection

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Agreement on Preshipment Inspection Back to top

Preshipment inspection (PSI) is the practice of employing specialized private
companies to check shipment details - essentially price, quantity, quality - of goods
ordered overseas. Used by governments of developing countries, the purpose is to
safeguard national financial interests (prevention of capital flight and commercial
fraud as well as customs duty evasion, for instance) and to compensate for
inadequacies in administrative infrastructures.

The agreement recognizes that GATT principles and obligations apply to the
activities of preshipment inspection agencies mandated by governments. The
obligations placed on PSI-user governments include non-discrimination,
transparency, protection of confidential business information, avoidance of
unreasonable delay, the use of specific guidelines for conducting price verification
and the avoidance of conflicts of interest by the PSI agencies.

The obligations of exporting contracting parties towards PSI users include
non-discrimination in the application of domestic laws and regulations, prompt
publication of such laws and regulations and the provision of technical assistance
where requested.

The agreement establishes an independent review procedure - administered jointly
by an organization representing PSI agencies and an organization representing
exporters - to resolve disputes between an exporter and a PSI agency.