Principal Agency: Ministry of Economy and Public Works

Starting Date: May 1997

Ending Date: December 2001

In November 1997, the Government of the Republic of Argentina, through its Ministry of Economy and Public Works, and by way of Presidential Decree, decided to implement simultaneously a Pre-Shipment Inspection (PSI) Program along with the auditing of the services provided by the PSI companies.  Thus, ICS was invited to participate and assigned the duty of the auditing services.

To ensure that it is collecting the correct amount of revenues from duties and taxes the Government of Argentina had contracted ICS to audit and monitor the performance of the PSI companies. When deficiencies in the assessment and collection of import duties and taxes are uncovered by ICS they are reported to the Government - who quickly moves to correct them, maximizing revenue collection.

Activities

Under the PSI Auditing Program, ICS had the following responsibilities:

••  To arrive at an independent and unbiased opinion regarding the prices (“assessed      values”) proposed by the PSI companies in their Clean Report of Findings (CRF)      as a basis for the calculation of import duties and taxes.

••  To identifies all cases of under-invoicing.

••  To form an independent opinion regarding the price research capability of the PSI      companies by evaluating the qualifications of the pricing analysts and the existing      price research procedures, the quality of their price databases, and the methods      they use to calculate and report savings to the Government of Argentina..

••  To verify directly: a) whether the operational inspection procedures used by the      PSI companies are adequate; b) whether the roster of inspectors is (or appears      to be) large enough to ensure that no delays occur in scheduling inspections; and,      c) how savings relating to the inspection elements are captured and reported by      the PSI companies. Additionally, ICS organizes periodic field audits to establish      compliance with the required sampling and testing procedures.

••  To verify whether PSI companies indeed analyze the transaction value of      shipments based on the WTO guidelines; uncovers discrepancies not found by the      PSI companies during the quality and quantity inspection of the goods prior to      their shipment to Argentina - especially those relating to the misclassification of      the goods, which normally lead to underpayments of import duties; and      recommends to the Government that the declared transaction value should be      uplifted to compensate for under-invoicing and improper classification of goods      found by ICS.

••  To help reconcile the data capture during the audits. This includes PSI data and      all the data obtained by ICS from the local Customs and Excise Department and      through its quality and quantity inspection activity at the customs entry points.