Updated information on Incoterm EXW 2020
» What does the term EXW mean?
The term “EX Works” means that the seller is considered to have completed the delivery of the packed and packaged goods available to the buyer in its establishment (plant, factory, warehouse, etc.).
In this case, it is not the seller’s responsibility to load the merchandise on the designated means of transport, nor to carry out the customs procedures for its export. It is a task that the buyer takes care of. In fact, the buyer is responsible for shipping the merchandise.
The Incoterm EXW greatly benefits the seller, mainly because they do not have to worry about the merchandise once it leaves their facilities.
» For what mode of transport does EXW apply?
This modality can be used with any mode of transport, however, it is recommended that it only be used within the national territory.
It must be taken into account that the buyer must have logistics that can be managed from delivery to its final destination and have the knowledge to carry out the customs procedures for export. Otherwise, the buyer and his company may be affected.
» Seller’s obligations
» General
It is the seller who must provide the goods and the corresponding commercial invoice. In addition, you are obliged to present any other evidence such as a certificate of origin, health, etc. Everything that is relevant and stipulated in the sales contract.
» Supply
The seller is obliged to deliver the goods at the delivery point agreed in the contract at the disposal of the buyer. This is usually the seller’s own local location, although it may also be some location stipulated by the contract manufacturer. If there are several points, the seller can choose the most suitable point for him at the place of delivery.
As for the delivery date, it must be the date specified or the period of time agreed in the contract. In the case of selecting a time period, for example, “before April 31,” the act of delivery is not a physical delivery as such, but rather an appropriate notification from the seller to the buyer.
» Risk transfer
It is the seller who assumes all risks of both loss and damage to the merchandise until it has been delivered.
» Transport
The seller is not obliged to organize the transportation of the buyer’s goods. However, you must provide any relevant information to the buyer, whether security requirements, as well as other data that the buyer requests and is at their risk.
» Sure
The seller is also not required to take out insurance. However, the buyer may request it at his own risk and expense. If this happens, the seller must provide you with all the information necessary to arrange your insurance.
The seller has no obligation.
»Checking/packaging/marking
It is the seller who is obliged to pay all the costs of verification operations necessary for the delivery of the goods (quality control, measurement, weighing, counting). Additionally, you are obliged to provide packaging for the goods. Packaged products must be properly labeled.
» Cost allocation
The seller must assume all costs until the goods are delivered to the buyer.
» Notice to buyer
The seller must notify the buyer of what is required to receive the goods as specified in the contract.
» Obligations of the buyer
» General
The buyer must pay the price of the merchandise in accordance with the provisions of the contract.
» Supply
The buyer is obliged to receive the goods at the place where the seller has specified and notified him. It may be that the merchandise is before the buyer’s origin transportation arrives at said facilities. Therefore, you should consider having adequate insurance.
» Risk transfer
The buyer must assume all risks of loss or damage to the merchandise from the moment the seller has delivered the merchandise. If, in addition, the buyer does not notify of conformity, he runs the risk of loss or damage to the merchandise from the agreed date or from the date on which the period for acceptance of the merchandise has expired.
» Transport
In this case, it is the buyer who organizes the transportation of the merchandise. You can do it yourself or by hiring a carrier and assuming the costs from the agreed delivery point. You will also bear the cost of freight.
» Sure
Although there is a risk of loss or damage to the merchandise, the buyer is not obligated to the seller to insure the merchandise. It is the buyer’s decision to insure the merchandise or assume the risk.
In national territory, the buyer has no obligation to the seller. If it is an international transaction, it is the buyer’s responsibility to quote their own costs regarding the export, transit or import that is required.
» Checking/packaging/marking
The buyer must provide appropriate proof of acceptance of delivery to the seller. Regarding packaging and marking, you are not obliged to respect that of the seller.
» Cost allocation
The buyer is obliged to assume all costs related to the merchandise from the moment of delivery. Likewise, you will assume all additional costs that arise from failure to comply with the obligation to accept the merchandise once it has been made available to you, or from the lack of necessary notices. You must also reimburse the seller for any costs incurred.
If necessary, the costs of paying taxes, duties and official fees, as well as the implementation of customs export formalities, will be borne by you.
» Notice to seller
If both parties agree that the buyer can determine, within an agreed period, the date and/or point of delivery, they must notify the seller in advance.
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