"Inspection Passed" is a key milestone term in foreign trade processes. It refers to the act whereby the buyer or a third-party inspection agency designated by the buyer (such as SGS or BV) inspects the goods submitted by the seller, confirms that their quality, quantity, packaging, etc. comply with the contract or letter of credit requirements, and issues a written certificate of conformity. Usage scenarios typically occur at pre-shipment inspection (PSI) or at the port of loading, and are common under terms such as FOB and CIF. Notes: Inspection passed does not equal final acceptance. If the letter of credit requires an "inspection certificate," it must be issued by the designated agency; if the buyer inspects the goods itself, the inspection standards and cost-bearing arrangements should be clearly specified. It is the opposite of "Inspection Failed," which may lead to rework, price reduction, or rejection. Unlike "Acceptance of Goods," inspection passed only indicates that the inspection stage has been passed and does not release the seller from subsequent quality liability. In addition, after inspection is passed, the buyer may still reject the goods due to market changes, so it is advisable to clearly specify in the contract the effect of inspection passed and the conditions for final payment.
📝 Examples
1. The buyer commissioned SGS to conduct a pre-shipment inspection at the factory. Only after the inspection was passed could the seller arrange container loading and apply for the balance payment. (Note: Inspection passed is a precondition for shipment and payment collection.)
2. The letter of credit requires submission of an inspection passed report issued by BV. The seller must provide it together with the documents when presenting them; otherwise, the bank will refuse payment. (Note: The inspection passed report is a required document under the letter of credit.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner