Page 124 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 5: Methods of Financing Exporters and Business Risk Management

reflects actual services rendered rather than the current ad valorem practice. For instance, Notes
bulk goods such as wheat or petroleum could be exempted or should face lower fees.
Competition to Strengthen Customs Administration
Even though preshipment inspection services are described by the industry as temporary,
a number of countries have been using them for more than 10 years without concomitant
customs modernization. Although one possible solution is to insist on a clearer link
between preshipment inspection and customs reform, there may be a basic conflict of
interest in appointing a preshipment inspection company as the primary external agent
responsible for customs modernization. If the company is successful in customs
modernization, it closes off far more profitable flows from preshipment inspection work.
Governments should consider separating preshipment inspection support from customs
modernization assistance. This does not preclude governments from using the customs
modernization skills of preshipment inspection companies, but merely ensures that a
distinct agent be responsible for modernization. That agent could include a preshipment
inspection company not participating in the country’s preshipment inspection work. Such
unbundling can facilitate different fee structures for distinct lines of business, making it
easier for prices to reflect services rendered
Question:
Disucss the usefulness of preshipment inspection services.

Source: http://www1.worldbank.org/prem/PREMNotes/premnote53.pdf

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