Agreement on Preshipment Inspection refers to a contractual understanding between a buyer and a supplier that outlines the terms and conditions for conducting a preshipment inspection. Preshipment inspection, also known as PSI or pre-export verification of conformity, is a process wherein an independent inspection agency assesses the quality, quantity, and compliance of goods before they are shipped from the supplier's location to the buyer's destination.
The agreement typically entails the specific details and requirements regarding the preshipment inspection process. This includes information about the scope of inspection, such as which goods will be inspected, the applicable regulations and standards to adhere to, and the necessary documentation required for inspection. The agreement also outlines the responsibilities and obligations of both the buyer and supplier, including the provision of access to the goods and relevant records needed for inspection, as well as the timing and location of the inspection.
Additionally, the agreement may define the consequences and procedures in the event of non-compliance or failure to meet the inspection standards. This may include the buyer's right to reject or return non-conforming goods, potential penalties or compensations, and any dispute resolution mechanisms.
The aim of such an agreement is to ensure that the goods meet the agreed-upon quality, quantity, and regulatory standards, thereby mitigating potential risks for the buyer and providing a level of assurance. By having a clear understanding of the preshipment inspection process through this agreement, both the buyer and supplier can establish a fair and transparent framework for international trade.
