Preshipment inspection

Pre-Shipment Inspection (PSI) is inspection of goods being exported prior to the shipment by a
mandated Pre-Shipment Inspection (PSI) Agency. A PSI Agency carries out verification of
quality, quantity, price (including currency exchange rate and financial terms) and customs
classification for the destination country and then issues a Certificate with these details. Also, the
scope of a PSI Agency includes Packing & Marking and Supervision of Loading. Pre-
shipment inspection, also called preshipment inspection or PSI, is an important and
reliable quality control method for checking goods' quality while clients buy from the suppliers.

After ordering a number of articles, the buyer lets a third party control the ordered goods before
they are dispatched to him. Normally an independent inspection company is assigned with the
task of the PSI, as it is in the interest of the buyer that somebody not connected with the deal in
any way verifies the amount and quality. This way the buyer makes sure, he gets the goods he
paid for.

Although increasing numbers of clients would like to collect suppliers' information from
the Internet, this contains high risks because it is not a face-to-face transaction, and
Internet phishing and fraud can corrupt it. Pre-shipment inspection can greatly avoid this risk and
ensure clients get quality products from suppliers.

The pre-shipment inspection is normally agreed between a buyer, a supplier, and a bank, and it
can be used to initiate payment for a letter of credit. A PSI can be performed at different stages:

 Checking the total amount of goods and packing

 Controlling the quality and/or consistency of goods
 Verifying compliance with the standards of the destination country (e.g. ASME or CE
mark)

The first stage is often performed by the transport company, but for the latter two stages a proper
inspection company is needed. Similarly, if between the buyer and seller money transfer via
a letter of credit is agreed upon, it is necessary to assign a reputable inspection company. In case
of the letter of credit, after inspection of the goods, an inspection certificate is sent to the bank
issuing the letter of credit and the buyer, initiating the money transfer. Inspection companies are
classified in two classes:

- Free-market companies: These are privately owned companies, which sell their services to the
market. Danger with these might be, especially if it is a smaller company, that they might be paid
as well by the manufacturer, thus working in his interest.
- State owned inspection companies: Only very few companies operating on the market are state-
owned or partly state-owned. The shareholding of governmental institutions guarantees the
independence and objectivity.

A higher form of the PSI is called expediting, in this the dates of delivery and the production are
controlled as well.

Some countries, like Botswana, require PSIs for all goods entering the country in order to fight
corruption. In these cases the PSI must be performed by the company designated by the country.

When is pre-shipment inspection required?

Pre-shipment inspections (PSI) are required when mandated by the

government of the importing country. Governments impose pre-
shipment inspections to ensure that the price charged by the exporter
reflects the true value of the goods, prevent substandard goods from
entering their country, and mitigate attempts to avoid the payment of
customs duties.

Contracts for pre-shipment inspections are usually reviewed on an

annual basis and exporters may contact the local Chamber of
Commerce, inspection companies, or freight forwarders for up-dated
information.

Kindly note that many aid and charity organisations are exempt from
the inspection procedure, since the vehicle importation is not a
commercial transaction but a donation from the NGOs head office to
their country office. This should be checked with the local authorities.

Who carries out the pre-shipment inspection and who pays?

Pre-shipment inspections are performed by contracted private

organisations. In most cases, importers can select from a short list of
these organizations when planning inspections. Occasionally, however,
one firm is appointed to carry out inspections for a specific country.

Typically an exporter does not pay for inspections, although it is possible

that exporters may incur costs associated with inspection.

Who is responsible for arranging the pre-shipment inspection and what is the
process?
Although the importer is responsible for arranging the pre-shipment
inspection, the exporter must make the goods available for inspection at
the country of origin.

Generally, the inspection company starts the inspection process once it

receives a copy of the inspection order from the importing country. An
inspection order states the value of goods, the name and address of the
importer and the exporter, the country of supply and the importer's
declaration of customs code. The inspection company then contacts the
exporter to arrange an inspection site and time.

The steps of the inspection process are usually as follows:

1) The importer opens an import license.

2) The importer informs the inspection service in the country of import

of a pending shipment, and 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.

3) An inspection order is forwarded to the inspection company office in

the country of export.

4) The inspection company contacts the exporter to arrange date, time

and location for inspection.

5) 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.

6) The goods are shipped onward to the importing country, and the
importer uses the inspection report to get the imported goods released
from customs.

If goods should reach the border of the importing country without

inspection, they usually have to be re-exported to a nearby country for
inspection prior to re-entry.

How does pre-shipment inspection affect delivery dates?

Preparation of your vehicle(s) will not start until you advise us

whether or not an inspection is required, given that this process can take
time and we do not have the facilities to store completed vehicles.

The shipping dates we give on order confirmations are indicative only

and are subject to confirmation of whether or not an inspection is
required. It is in your interest to establish this quickly, to avoid
unnecessary delays. These measures are taken in your interest, as you
could be liable to a heavy fine on the arrival of goods, if local regulations
are not adhered to.

Countries/areas using PSI services Country/area Type of PSI contract

Argentina Customs
Bangladesh Customs
Benin Customs/Forex
Bolivia Forex
Burkina Faso Customs/Forex
Burundi Forex
Cameroon Customs/Forex
Central African Republic Customs/Forex
Colombia Customs
Comoros Customs/Forex
Côte d’Ivoire Customs
Democratic Republic of the Congo Customs
Ecuador Customs
Ghana Customs/Forex
Guinea Customs/Forex
Iran, Islamic Republic of Quality/Quantity
Kenya Customs
Liberia Customs
Madagascar Customs/Forex
Malawi Customs/Forex
Mali Customs
Mauritania Customs/Forex
Mexico Customs
Mozambique Customs/Forex
Niger Customs/Forex
Nigeria Customs/Forex
Paraguay Customs
Peru Customs
Philippines Customs
Rwanda Customs/Forex
Senegal Customs/Forex
Sierra Leone Customs/Forex
Togo Customs
Uganda Customs
United Republic of Tanzania Customs/Forex
Uzbekistan Forex
Zanzibar Forex
The term Washington Consensus was initially coined in 1989 by John Williamson to describe
a set of ten specific economic policy prescriptions that he considered should constitute the
"standard" reform package promoted for crisis-wracked developing countries by Washington,
D.C.-based institutions such as the International Monetary Fund (IMF), World Bank, and the US
Treasury Department.[1]

Subsequently, as Williamson himself has pointed out, the term has come to be used in a
different and broader sense, as a synonym for market fundamentalism; in this broader sense,
Williamson states, it has been criticized by people such as George Soros and Nobel
Laureate Joseph E. Stiglitz.[2] The Washington Consensus is also criticized by others such as
some Latin American politicians and heterodox economists[who?]. The term has become
associated with neoliberal policies in general and drawn into the broader debate over the
expanding role of the free market, constraints upon the state, and the influence of the United
States, and globalization more broadly, on countries' national sovereignty.
"Stabilize, privatize, and liberalize" became the mantra of a generation of technocrats who cut
their teeth in the developing world and of the political leaders they counseled.[3]
—Dani Rodrik, Professor of International Political Economy, Harvard University

Context
Many countries have endeavored to implement varying components of the reform packages,
with results that are much debated. Some critics focus on claims that the reforms led to
destabilization.[4]Some critics have also blamed the Washington Consensus for particular
economic crises such as the Argentine economic crisis (1999–2002), and for exacerbating Latin
America's economic inequalities. Criticism of the Washington Consensus has often been
dismissed as socialism and/or anti-globalism, and while these philosophies do criticize these
policies, now general cricism of the economics of the consensus is well respected such as that
outlined by US scholar Dani Rodrik, Professor of International Political Economy at Harvard
University, in his paper Goodbye Washington Consensus, Hello Washington Confusion?, have
recently joined their criticisms.[3].

The institutions that formed the consensus started softening their insistence on these policies in
the 2000s largely due to political pressures surrounding globalization, but any reference of these
ideas as a consesus essentially ended in the wake of the 2008 global financial crisis, as market
fundamentalism lost favour. Though, it should be noted, that most of the core specific policies
are still generally regarded favourably, but the policies have come to be viewed as not
preventing nor alleviating acute economic crises. This is perhaps most notable in the work of the
IMF with South Korea to create a new sort of intervention program to the one that South Korea
was forced to accept during the Asian Financial Crisis of the late 1990s. That intervention, which
was heavily grounded in the Washington Consensus, was hailed at the time for stopping the
"Asain Contagion" but eventually the program came to be seen more skeptically.

Williamson himself has summarized the overall results on growth, employment and poverty
reduction in many countries as "disappointing, to say the least". He attributes this limited impact
to three factors: (a) the Consensus per se placed no special emphasis on mechanisms for
avoiding economic crises, which have proved very damaging; (b) the reforms—both those listed
in his article and, a fortiori, those actually implemented—were incomplete; and (c) the reforms
cited were insufficiently ambitious with respect to targeting improvements in income distribution,
and need to be complemented by stronger efforts in this direction. Rather than an argument for
abandoning the original ten prescriptions, though, Williamson concludes that they are
"motherhood and apple pie' and "not worth debating".[5] Some other analysts have pointed to
longer term improvements in economic performance in a number of countries that have adopted
the relevant policy changes consistently (below).

While opinion varies among various individual economists, Rodrik pointed out what he claimed
was a factual paradox: while China and India increased their economies' reliance on free market
forces to a limited extent, their general economic policies remained the exact opposite to the
Washington Consensus' main recommendations. Both had high levels of protectionism,
no privatization, extensive industrial policies planning, and lax fiscal and financial policies
through the 1990s. Had they been dismal failures they would have presented strong evidence in
support of the recommended Washington Consensus policies. However they turned out to be
successes.[6] According to Rodrik: "While the lessons drawn by proponents and skeptics differ, it
is fair to say that nobody really believes in theWashington Consensus anymore. The question
now is not whether the Washington Consensus is dead or alive; it is what will replace it".[3]

Many economists[who?] would not, however, accept Rodrik's above characterizations as an

accurate and balanced account of Chinese or Indian policies during the period. Among other
things those policies involved major turns in the direction of greater reliance upon market forces.

In a book edited with Pedro Pablo Kuczynski in 2003, John Williamson laid out an expanded
reform agenda, emphasizing crisis-proofing of economies, "second-generation" reforms, and
policies addressing inequality and social issues.

Following the 2009 G-20 London summit, British Prime Minister Gordon Brown declared "the old
Washington Consensus is over".[7]
[edit]History

The concept and name of the Washington Consensus were first presented in 1989 by John
Williamson, an economist from the Institute for International Economics, an international
economic think tankbased in Washington, D.C. [1] Williamson used the term to summarize the
commonly shared themes among policy advice by Washington-based institutions at the time,
such as the International Monetary Fund, World Bank, and U.S. Treasury Department, which
were believed to be necessary for the recovery of Latin America from the economic and
financial crises of the 1980s. However, Williamson rejects subsequent use of the term to cover a
more general "neoliberal" agenda.[8]

A number of authors have stressed that Latin American policy-makers arrived at their packages
of policy reforms primarily based on their own analysis of their countries' situations. Thus,
according toJoseph Stanislaw and Daniel Yergin, authors of The Commanding Heights, the
policy prescriptions described in the Washington Consensus were "developed in Latin America,
by Latin Americans, in response to what was happening both within and outside the
region."[9] Joseph Stiglitz has written that "the Washington Consensus policies were designed to
respond to the very real problems in Latin America and made considerable sense". Stiglitz is
nevertheless a vociferous critic of IMF policies as applied to developing nations.[10] In view of the
implication conveyed by the term Washington Consensus that the policies were largely external
in origin, Stanislaw and Yergin report that the term's creator, John Williamson, has "regretted
the term ever since", stating "it is difficult to think of a less diplomatic label."[11]

In Williamson's own words from 2002:

It is difficult even for the creator of the term to deny that the phrase "Washington Consensus" is
a damaged brand name (Naím 2002). Audiences the world over seem to believe that this
signifies a set of neoliberal policies that have been imposed on hapless countries by the
Washington-based international financial institutions and have led them to crisis and misery.
There are people who cannot utter the term without foaming at the mouth.

My own view is of course quite different. The basic ideas that I attempted to summarize in the
Washington Consensus have continued to gain wider acceptance over the past decade, to the
point where Lula has had to endorse most of them in order to be electable. For the most part
they are motherhood and apple pie, which is why they commanded a consensus.[5]

Williamson has argued that the term has taken on a different meaning more closely related to
market fundamentalism than his original prescription entails. He claims that the first three
prescriptions are uncontroversial in the economic community, but the others evoke some
controversy. He claims that one of the least controversial prescriptions, the redirection of
spending to infrastructure, healthcare, and education, was neglected. He also claims that while
his prescriptions were focused on reducing the role of government, he does not endorse market
fundamentalism, and believes that his prescriptions, if implemented correctly, would benefit the
poor.[2] In a book edited with Pedro-Pablo Kuczynski in 2003, John Williamson laid out an
expanded reform agenda, emphasizing crisis-proofing of economies, "second-generation"
reforms, and policies addressing inequality and social issues (Kuczynski and Williamson, 2003).

The Washington Consensus is a term used to describe ten policy prescriptions laid out
by economist John Williamson. The Washington Consensus is meant as a baseline of directions
for nations in need of assistance from international economic entities such as the World
Bank and the International Monetary Fund. The Washington Consensus was originally laid out
in 1989, and has since been referenced many times, and has become a sort of general term of
disparagement to those who oppose free market fundamentalism. The Washington Consensus
has seen limited results as it has been applied in various countries suffering economic crises.
Over the years it has been blamed for a number of massive destabilizations, most notably the
Argentinean crisis. John Williamson, the original proponent of the Washington Consensus, at
one point noted that in many cases the results of its implementation had been disappointing,
noting some flaws and how it might be improved.

The ideas in the Washington Consensus were not new or novel at the time Williamson
presented them. Instead, they represented a distillation of the common threads among advice
most often given by the International Monetary Fund, the World Bank, the US Treasury, and
other lending bodies. The Washington Consensus was originally intended to address the very
real problems occurring in Latin America at the time, and its use later to handle a wide array of
other situations has been criticized even by original proponents of the points.

The ten points of the Washington Consensus are themselves intentionally somewhat vague, as
they were meant to represent a baseline. They include: keeping competitive exchange
rates within the country; liberalizing foreign investment opportunities; privatizing enterprises run
by the state; giving strong legal guarantees for property rights; letting interest rates be handled
by the market and remaining positive and moderate; moving spending away from subsidies and
towards direct investment in infrastructure, health care, and education; reforming the tax system
to a broader tax base; having a policy of strong fiscal responsibility; liberalizing trade by
removing or lessening restrictions on imports and tariffs; and deregulation that lessens
competition, except in the cases of consumer safety, environmental health, and financial
institutional stability.

The name of the Washington Consensus has often been mentioned as being somewhat
unfortunate, especially by its creator. Many people feel that it gives the impression the points
outlined represent a set of rules imposed on developing nations by the United States. Instead,
Williamson always felt that the Washington Consensus represented a consensus precisely
because the ideas outlined in it were so universal. Many proponents of the Washington
Consensus do not feel that it represents the hard-line neo-liberal agenda that anti-free-trade
activists say it does, instead presenting it as a relatively conservative assessment of what
policies can help bring a country to economic stability.
Related topics
Economy

Imf

The Imf

Imf Role

Role Of Imf

The Role Of Imf

International Monetary Fund

Opponents of the Washington Consensus ideas note that it does a great deal to open
developing nations to exploitation by already developed nations, sometimes with catastrophic
results. A number of countries, particularly in Latin America, have pursued policies in recent
years that go directly against the Washington Consensus, sometimes with very positive results.
Socialist leaders such as Hugo Chavez, Evo Morales, and Nestor Kirchner all actively spoke out
against the Washington Consensus, and guided their countries in a very different direction.