What is an SGS report?
An SGS report is an inspection certificate issued by SGS SA, the Swiss testing and verification company, confirming the quantity, quality and condition of a cargo at the point of inspection. In commodity trading the name is often used generically for any third-party inspection certificate.
At a glance
| Term | SGS Report |
|---|---|
| Definition | Independent inspection certificate from SGS confirming quantity, quality and condition of a shipment. |
| Category | Deal flow & documents |
| Related terms | LOI (Letter of Intent), ICPO (Irrevocable Corporate Purchase Order), FCO (Full Corporate Offer), POP (Proof of Product) |
What it is used for
Independent inspection is how buyer and seller agree on what was actually loaded without either side taking the other's word for it. The certificate is typically a required document under a letter of credit, so it is what releases payment.
Key points
- Certifies quantity (weight or volume) and quality against the contract specification, at load port, discharge port, or both.
- Usually names the vessel, tanks or holds, sampling method and the analysis standard applied.
- Commonly listed in the letter of credit as a required document, making it a payment trigger.
- SGS is one of several accredited inspectors — Bureau Veritas, Intertek, Cotecna and Saybolt are equally standard.
What to watch for
- Specify in the contract who appoints and pays the inspector, and whether the load-port or discharge-port result governs.
- An inspection certifies the sample at that moment; quality can legitimately change in transit for some commodities.
- Forged inspection certificates are common in trade fraud. Verify the certificate number directly with the inspection company.
Frequently asked questions
Is SGS the only accepted inspector?
No. Bureau Veritas, Intertek, Cotecna, Saybolt and other accredited companies are equally acceptable. Contracts should name the inspector or allow any first-class international inspector.
Who pays for the SGS inspection?
It depends on the contract and the Incoterms rule. Load-port inspection is commonly the seller's cost, discharge-port inspection the buyer's, but this is negotiable and should be written down.
Does an SGS report guarantee the cargo?
It certifies what the inspector found for the samples taken, at that place and time. It is strong evidence, not a guarantee of the entire parcel.
Related terms
Lodfy verifies every company on the platform — registration, ownership and sanctions screening — before they can trade.