Abstract
Preshipment inspection services (PSI) are employed by some thirty governments to address problems associated with over-invoicing and under-invoicing of trade transactions, tariff mis-classification, shortfalls in revenue collections from trade taxes, and the management of funds for balance of payments support. In recent years, emphasis has fallen increasingly on revenue-related issues. This study evaluates PSI services, principally from the perspective of user governments. It concludes that while PSI can be of significant benefit, the realization of those benefits depends crucially on appropriate contract design and the determination of governments to make the system work. Since PSI addresses administrative and institutional shortcomings in user countries, PSI programs should be accompanied by sustained reform efforts that will create the conditions for phasing out reliance on the service.
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