In addition to
recommendations in its 1997 report, the Working Party added the following:
Governments must ensure that preshipment inspection (PSI) contracts are in conformity with
the provisions of the WTO PSI Agreement, and encourage Members to consider following the
model contract wherever possible;
Governments should examine incorporating the principles of selectivity and risk assessment
in their contracts;
Governments who consider having their PSI programmes audited should be guided by
principles contained in an annex to the report, or ensure that the principles in the
Agreement such as non-discrimination and national treatment are respected; and
Developed countries ensure that the developing countries receive the necessary assistance
for domestic capacity building in order that the transition away from PSI can be made.
Working Party further recommended that the future monitoring of the Agreement should be
undertaken initially by the WTO Committee on Customs Valuation.
Working Party Chairman, Mr. Edward Brown (United Kingdom), said that the positive spirit
of cooperation between exporting and PSI-using Members had produced a good result. He
added that inviting inputs from key players like the International Chamber of Commerce and
the International Federation of Inspection Agencies had also contributed to the successful
completion of the body's work.
Note to Editors:
inspection is the practice of employing specialized private companies to check shipment
details--essentially price, quantity and quality--of goods ordered overseas. Currently
used by 34 developing country members of the WTO, 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
WTO PSI Agreement recognizes that GATT principles and obligations apply to the activities
of PSI agencies mandated by governments. The obligations placed on governments which use
PSI 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 inspection
agencies. The obligations of exporting members towards PSI-using countries include
non-discrimination in the application of domestic laws and regulations, prompt publication
of those laws and regulations and the provision of technical assistance when requested. An
independent review procedure has been established to resolve disputes between an exporter
and an inspection agency.
Working Party was established by the General Council in November 1996 to review the
Agreement. The complete text of the Working Party's final report (G/L/300) is available at
the WTO Website (www.wto.org).