ChapterFiveInspectionandInsurance 5.1Inspection5.2Insurance

5.1Inspection

5.1.1Pre-shipmentInspectionApre-shipmentinspectionisrecommendedwhengoodsarebeingmadeforthebuyerandthebuyerwishestoensurethatthegoodshavebeenmanufacturedcorrectlyandarenotdefective.Suchaninspectionhelpsavoidafuturedisputeoncethegoodshavearrived.Often,animportlicensewillnotbeissuedinadevelopingcountryunlessapre-shipmentinspectionreportisprovided.

Thebuyercaninsistuponaninspectionofthegoodsuponloadingorearlier,eitherbyitsownagentorbyaqualifiedinternationalinspectioncompany.However,pre-shipmentinspectionscanbeperformedatavarietyofdifferentlevels(andatcorrespondinglyvaryingfeerates).Manycompaniesthatspecializeinperformingsuchinspections,suchasSociétéGénéraledeSurveillance(SGS),willissueaninspectioncertificatewhichthencanberequiredasadocumentnecessarytoobtainpayment.

Oncethebuyerdoesnottakesufficientcareinensuringthatthepropertypeofinspectioniscarriedout,itwillfacedisasterwhenthegoodsarefoundtobedefectiveuponarrival,iftheinspectiondidnotrevealanydefectsnotcausedbydelivery.Inmanyinstances,anot-so-savvybuyerwillsimplyengageanotherwiseunknownlocalagenttoinspectthegoods.Theagentmayperformonlyalimitedvisualinspectionthatmaybeinsufficienttodeterminewhetherthegoodsaredefective.Thereafter,thebuyermayhavetheunpleasanttaskofhavingtoarguethatitsowninspectioncertificatewasdefective.Thebuyerthushasastronginterestinensuringthatthecompanyperformingtheinspectionisreliable.

Ensuringthatapre-shipmentinspectionisperformedisalsoimportanttothesellerasitcanlimititsriskofshippingthegoodsonlytohavethemrejecteduponarrival.Forthisreason,thesellermayhaveaninterestinchoosingtheinspectingagency.

Pre-shipment