Q & As: Dumping Product after Repacking

If both the shipper and receiver agree that an inspection is not needed, do we still need to get an inspection when more than 5% of the product is dumped?

Q. We are an importer from Vancouver. We recently received 4000 cartons of mangoes from Mexico in poor condition. We immediately emailed some pictures of the load to the shipper and we agreed to have the mangoes repacked without obtaining a federal inspection. During the re-packing we lost 1000 cartons. After providing our repacking accounting to the shipper they rejected our liquidation and claimed they needed proof the lost cartons had no value. We have a dump slip indicating 1000 cartons were dumped. Is this enough to prove the dumped mangoes had no value?

A. (Answer provided by Jaime Bustamante, Trading Assistance Manager)
The answer is no – a dumping slip does not validate that the product dumped has no commercial value. The shipper was timely notified of a problem with the mangoes on arrival and you secured a repacking agreement without the need for a federal inspection. So far, you have covered your tracks. However, without an inspection, you have no indication of the extent of the damage of the product. When disposing of more than 5% of the product received, an official certificate is required demonstrating that the product has no commercial value.

Section 9 of the DRC Trading Standards state: “Reasonable cause for destroying or disposing of any produce exists when the commodity has no commercial value … The term “commercial value” means any value that a commodity may have for any purpose that can be ascertained by the exercise of due diligence without unreasonable expense or loss of time. When produce is being handled for or on behalf of another person, proof as to the quantities of produce destroyed or discarded in excess of five percent of the shipment shall be provided by procuring an official certificate regarding the actual disposition of the discarded produce…”

In most cases the “official certificate” is a federal inspection indicating the percentage of condition defects in the product to be disposed of is needed to provide evidence that the product has no commercial value as well as the actual disposition of the product.

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