The words “Dump Certificate” have to be in the top ten phrases which lead to a DRC consultation. The goal of this article is to differentiate between documenting disposal and establishing that a product has no commercial value. Misunderstanding the difference can cost you plenty.
There are three main events which lead to a need to document disposal/destruction. They are:
- Mutual agreement of buyer and seller.
- Order of a government officer or agency.
- Documenting claims where an excess of 5% of product is to be destroyed or discarded.
Items 1 and 2 are straightforward and require identification of the product and witnessing of the destruction. Commercial value or condition of the product is not an issue. The requirement and service are simply to show a recognized neutral party witnessed the dumping. That certificate in no way addresses the value or lack of value of the product.
Item 3 becomes more complicated as over the years industry jargon has significantly confused an intention to dump with documenting a lack of commercial value. An inspector is not in a position to know if the product has commercial value. Supply and price often dictate when distressed product has value. On a $10 market the product may have no value. On the other hand, if the market is $30 that same product may have commercial value. Establishing commercial value is up to authorities like DRC, PACA, the courts and others when needed.
The most important thing dispute resolution bodies need is a description of the product. The kind of description the CFIA, Destination Inspection Service (DIS) inspector is trained to provide, in the form of a condition and/or grade inspection. Combining the data from the inspection certificate with market conditions and other factors is essential in determining if the product has any commercial value.
In conclusion, items 1 and 2 above only require a witness statement in the form of an official certificate as described in section 9 of the DRC Trading Standards.
Item 3 above requires more than a witnessing of destruction. It requires evidence to support the product has no commercial value. The best evidence is a condition and or quality inspection showing excessive defects.
We often see condition inspections with the wording “applicant states product to be dumped” in the remarks section. That wording is certainly common and acceptable assuming everyone is in agreement. It is not proof the product has no commercial value, nor is it proof the product was actually destroyed.
In a contentious situation where communication and trust has broken down it is advisable to secure both a witness and a condition/quality inspection. If the dispute winds up in a formal process that evidence will be crucial to your case.