WORLD TRADE
ORGANIZATIONG/PSI/WP/W/21
4 November 1998
(98-4288)
Working Party on Preshipment Inspection
DRAFT REPORT OF THE WORKING PARTY ON PRESHIPMENT INSPECTION TO THE
GENERAL COUNCIL
1. The Working Party on Preshipment Inspection was established by the General Council at its
meeting of 7, 8, and 13 November 1996.  The terms of reference of the Working Party when it wasestablished were as follows:
"to conduct the review provided for under Article 6 of the Agreement on preshipment
Inspection and to report to the General Counc il through the Council for Trade in Goods in
December 1997".
2. The Working Party presented its report to the General Council at its meeting of 10 December
1997.  It was adopted and circulated in document G/L/214.  Among its recommendations, the
Working Party recommended that the life of the Working Party be extended for another year.  The
report stated:
"8. The life of the Working Party shall be extended for one year to exchange views on a
Code of Conduct/Practice for PSI entities;  a sta ndard inspection format;  selective examination
of shipments;  auditing of PSI entities;  the promotion of competition among PSI entities;  fee
structures for PSI entities; and the use, to user Members, of building price data bases".
The Working Party also recommended that other future work include:
"9. An assessment of technical assistance activities should be undertaken, in accordance
with Article 3 of the Agreement, and draw upon the assessment of technical assistance activities
under consideration in the Committee on Customs Valuation and the integrated framework for
trade-related technical assistance endorsed by the WTO High-Level Meeting for Least
Developed Countries.  Technical assistance ac tivities, which should be administered on a
request basis, could include areas such as tariff and customs administration reforms;
simplification and modernization of systems and procedures; and the development of an
adequate legal, administrative, and physical infrastructure".
3. Following adoption of this report, the Working Pa rty has held four formal meetings this year.
These meetings were held 19 March, 12 June, 6 October and 11 November 1998.  In addition, five
informal meetings were held, on 20 April, 12 Ju ne, 6 October, 30 October 1998 and 11 November 1998.
4. At the first meeting, the Swiss delegation circulated a proposal for a model agreement on
preshipment inspection, contained in document G/PS I/WP/W/16;  at the second meeting the United
States circulated a communication discussing the issues in the working programme, contained in
G/PSI/WP/W/17;  and at the third meeting the European Communities and the United States circulated
communications on some of the items in the wo rk programme in documents G/PSI/WP/W/19 and
./.G/PSI/WP/W/21
Page 2
G/PSI/WP/W/20 respectively.  At this meeting and the following three formal meetings, the Working
Party exchanged views on all the issues contained in its work programme, as detailed in
recommendation 8 of G/L/214.  During the informal meetings of 12 June, 6 October, and 11 November,
the Working Party heard presentations from represen tatives of the International Chamber of Commerce,
the International Federation of Inspection Agencies, UNCTAD, an auditing company called SWIPCO,and the World Customs Organization.
5. The discussions in the formal meetings and pr esentations at the informal meetings have been
extremely useful in furthering the Working Party's understanding of the issues in its work programme,
as well as the practice of preshipment inspection in general.  They have served as a catalyst for opening
up discussions among Members as well as facilitatin g dialogue between Members and the preshipment
inspection companies.  The Working Party is enc ouraged by the recent progress in its work and,
therefore, recommends that its life be extended until 31 March 1999 in order to conclude its work.  This
time will additionally allow the Working Party to ex change views on the new item, trade facilitation, put
on its agenda following a request by the Chairman of  the Council for Trade in Goods, and to provide the
requested input for the consideration of the C ouncil on Trade in Goods on this subject-matter.
__________