There are numerous factors which determine the Kashrut of the Etrog. One of the most common issues is black dots on the surface of the Etrog. The top third of the Etrog is the most sensitive area. There, even one black dot invalidates the Etrog. Therefore, one must inspect that area carefully. Brown dots are not a problem.
With regard to the lower part of the Etrog, there is a difference between the Sepharadim and the Ashkenazim. The Mishna Berura holds that two black dots on the same side are not a problem. He only invalidates the Etrog when the dots are on opposite sides. However, according to the Shulhan Aruch and the Sepharadic ruling, two black dots on the same side also invalidate the Etrog. This is important to know, because if someone buys his Etrog from an Ashkenazi and shows him the two black dots on the same side, he may say that it’s permitted according to the Mishna Berura. This is true, but for a Sepharadi, the Etrog is invalid, and if he makes a Beracha on it on the first day, it is a Beracha L’Vatala.
If the Etrog has a Pitam, the “neck” of the Pitam is considered part of the fruit itself, and consequently, even one black dot there is considered on the top third and invalidates the Etrog. However, the round, upper woody part of the Pitam, the “Shoshanta,” is not considered part of the Etrog, and black dots there are not a problem. The “Oketz,” the stem on the bottom side of the Etrog is not considered part of the Etrog for this purpose, and black dots there are not a problem.
Sometimes the Etrog has a scar, which the Ashkenazim call “Ble’ta’lach” (leaves). These blemishes are caused by the thorny leaves which scrapes the Etrog while it is still on the tree. While these scars do not render the Etrog Pasul (invalid), any black dot on them has the same Halacha as though it was on unblemished surface of the Etrog.
The many Halachot governing which spots render an Etrog invalid underscore the importance of consulting with a Rav regarding any issues that may arise. Today, with the proliferation of Etrog salesmen, one cannot rely on the opinion of the seller. He should bring it to a Rav who knows the Halacha for Sepharadim to be inspected.