Incoterms & trade contracts EXW

Ex Works

The Incoterm with the least obligation for the seller: goods are made available at the seller’s factory or warehouse, not loaded on the collecting vehicle. Loading, export clearance, freight and all risks are the buyer’s. Because a foreign buyer usually cannot file the export declaration itself, FCA is often the better choice for international sales.

Related terms

Free Carrier FCA

The seller delivers export-cleared goods to the carrier nominated by the buyer at the named place. If the place is the seller’s premises the seller loads the goods; elsewhere (e.g. a port terminal) they are delivered on the arriving vehicle ready for unloading. Suitable for any transport mode; under Incoterms 2020 the buyer can instruct its carrier to issue an on-board bill of lading to the seller, which helps with letters of credit.

Incoterms 2020

The eleven standard delivery terms published by the International Chamber of Commerce (ICC) that define where the seller delivers, when risk passes to the buyer and who pays for freight, insurance and customs formalities. Incoterms do not set the price, the payment method or the transfer of ownership; those must be written separately in the contract. A rule should always be quoted with a named place and the version, e.g. “FOB Mersin Port, Incoterms 2020”.

Export declaration

The electronic declaration filed with customs by the exporter or its broker so that goods can legally leave the country, stating the description, HS code, quantity, value, consignee and destination. The closed export declaration is the official proof of export for VAT zero-rating, export incentives and foreign-exchange rules. Under EXW this duty falls on the foreign buyer, which causes practical problems – which is why FCA is usually more suitable.

Explained in the trade handbook

Trade handbook