Ex Works (EXW)

“Ex Works” means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable.

Can be used for any transport mode, or where there is more than one transport mode.

This rule places minimum responsibility on the seller, who merely has to make the goods available, suitably packaged, at the specified place, usually the seller’s factory or depot.

The buyer is responsible for loading the goods onto a vehicle (even though the seller may be better placed to do this); for all export procedures; for onward transport and for all costs arising after collection of the goods.

In many cross-border transactions, this rule can present practical difficulties.

Specifically, the exporter may still need to be involved in export reporting and clearance processes, and cannot realistically leave these to the buyer. Consider Free Carrier (seller’s premises) instead.

Other things to watch for.  Although the seller is not obliged to load the goods, if the seller does so, this is at the buyer’s risk!

Ex Works (EXW): Further information

In spite of its apparent simplicity, this rule presents many pitfalls for both parties when used for cross-border transactions.

Ex Works obliges the buyer to undertake export procedures (obtaining of licences, security clearances and so on.)   The buyer may be poorly placed to do this.   In any event the seller is only obliged to “provide assistance”, at the buyer’s risk and expense.

From the seller’s perspective, there is the problem of obtaining evidence that the goods are to be exported – where VAT or sales tax is charged on domestic sales, the tax authorities may require this.

The obvious alternative for cross-border transactions is Free Carrier (FCA) – seller’s premises.

 

For more details regarding the updated 2020 terms, please speak with your nominated shipping company or refer to the International Chamber of Commerce.