Pre-Shipment Inspection (PSI)
Pre-shipment Inspection Rules – 2002 (SRO No. – 255-AIN/2002/1973/Shulka, Dated 19-09-2002 which replaces Pre-Shipment Inspection Order – 1999, Dated 19-10-1999)
- Amendment of Pre-shipment Inspection Rules–2002 (SRO No. 38-AIN/2008/2188/Shulka, Dated 05-06-2008)
- Circular regarding exemption from mandatory pre-shipment inspection (SRO No. 193-AIN/2010/2311/Shulka, Dated 10.06.2010)
- Customs Act-1969
- Import Policy Order
- Monitoring imports into developing countries.
- Protection of foreign exchange resources by verifying quantity, quality and price of the goods being imported.
- Improvement in revenue collection through accurate classification of tariff codes.
PSI at a glance:
- Mandatory PSI was launched from February 15, 2000 following the Pre-shipment Inspection Order-1999 (SRO-316/99, Dated: 19.10.1999)
- PSI Order-1999 was replaced by PSI Rules-2002
- For performing the purpose all countries of the world are divided into 5 Blocks.
- At present 4 (four) Inspection Agencies are enlisted by NBR to perform inspection:
- SGS (Societe Generale De Surveillance), Switzerland.
Block A & C
- BIVAC (Bureau Varitas International), France.
- OMIC (Overseas Merchandise Inspection Co.), Japan.
- Intertek International Ltd, UK.
Major points of PSI Rules-2002:
- Appointment procedure of PSI Agencies
- Expiry of appointment
– maximum 3 years
- Segregation of the countries of the world into Blocks
– 5 Blocks
- Duties & Responsibilities of the Agencies
– examination of goods
– verification of description, quantity and quality of goods
– classification of tax of goods
– determination of value of goods
- Procedure of inspection by the Agency
- Procedure of issuing Report (CRF)
- Procedure of sending Report
- Responsibility of the Importer
Responsibility of the Bank
- Procedure of Physical Examination of goods
- Investigation & Punishment (if objections raised against the Agency)
- Establishment of Central and Local Monitoring Committee
- Inspection Fees and payment procedure
Goods exempted from Pre-Shipment Inspection:
(Details in SRO No. 193 – AIN/2010/2311/Shulka, Dated 10.06.2010)
- Goods under H.S. Codes those have no customs duty as per First Schedule.
- Goods under H.S. Codes those have 5% customs duty as per First Schedule.
- Perishable goods including fresh fruit, live animal, living plants, fish and meat.
- Goods imported for export-oriented industries, imported under bonded warehouse facilities.
- Capital machineries imported for hundred percent export oriented industry by submitting indemnity bond.
- Goods imported as relief under the authority of government.
- Goods imported by a diplomat or under the coverage of diplomatic facility as per Vienna convention, 1961.
- Machinery and equipment imported for the rehabilitation of deaf, dumb, blind and physically and mentally handicapped persons.
- Post parcel and commercial samples, etc.
- Incorporation of PSI clause in the LC
- Sending PSI information with Bank’s forwarding on the day of opening LC to the local office of the PSI Agency along with the following documents attested by the Bank:
-copy of LC
-copy of Proforma Invoice/Indent
-copy of Insurance Cover Note
-copy of TIN certificate (once for new importer)
-copy of VAT Registration (once for new importer)
- Sending copy of amendment, If LC is amended.
- Receiving attested copy of CRF (Clean Report of Findings)
- Giving endorsement on attested copy of CRF
- Endorsement on Final/Commercial Invoice and Packing List certified by the PSI Agency.
- If LC is cancelled, it should be informed to the Agency.
- If LC is cancelled after completion of PSI, Bank will recover fees/charges of the Agency from the margin of LC.
CRF (Clean Report of Findings):
- To be issued in prescribed format on the Agency’s letterhead pad
- Following arrangements to be maintained in CRF:
- CRF number (10 digit)
- coloured pattern background
- micro-printed side border
- warning band
- artificial water marks
- dry embossed seal
- Local Office of the Agency will send attested copy of CRF to LC Issuing Bank.