EXW (Ex Works)
From Supply Chain Management Encyclopedia
Russian: EXW Франко завод (...названное место)
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General Provisions
In accordance with rules of Incoterms® 2010,[1] the EXW rule, - EXW (Ex Works) (. . . named place of delivery), - may be used irrespective of the mode of transport selected. The EXW may be used where more than one mode of transport is employed. The EXW is also suitable for domestic trade. This rule 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. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the costs and risks to that point are for the account of the seller. The buyer bears all costs and risks involved in taking the goods from the agreed point, if any, at the named place of delivery. Minimum obligation for the seller, but should be used with care as the seller has no obligation to the buyer to load the goods. If the seller does load the goods, it does so at the buyer's risk and expense. FCA (Free Carrier), which obliges the seller to do so at its own risk and expense, is usually more appropriate]. Seller has an obligation to provide only such assistance as the buyer may require to effect that export: the seller is not bound to organize the export clearance. Buyers are well advised not to use EXW if they cannot directly or indirectly obtain export clearance. The buyer has limited obligations to provide to the seller any information regarding the export of the goods. However, the seller may need this information for, e.g., taxation or reporting purposes.
Summary on Buyer's and Seller's Resposibilities under EXW Incoterms® 2010
Seller's Responsibilities (in brief) | Buyer's Responsibilities (in brief) | |
Goods - Payment |
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Licenses, Security, and Customs Formalities |
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Carriage |
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Insurance |
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Delivery - Taking Delivery |
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Risk Transfer |
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Costs |
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Notice to the Buyer - Notice to Seller |
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Delivery and Transport Documents - Proof of Delivery |
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Checking, Packing, Marking - Inspection(s) |
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Other |
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Examples[2]
- EXW, Furniture Factory Number One, Full Address, Milan, Italy
- EXW, Flavor-Aid, Inc., Full Address, West Chicago, United States
Notes
- [1] According to Incoterms rules, seller and buyer have reciprocal responsibilities only. The "no obligation" term often used in the rules of Incoterms means that one party has not obligation to the other party. In this case (Art. А.3.А - Incoterms® 2010) the seller has obligation neither to arrange nor to pay the contract on carriage. The same way, the "no obligation" term concerning the contract on carriage applied to the buyer (Art. В.З.А - colspan="2"|) describes the buyer’s position, where the latter has not responsibility to the seller for the contract on carriage. Therefore, in accordance with the EXW rule, no one from the contract parties has responsibility to the second contract party. The "no obligation" term has the same understanding for the both parties in the case of insurance. However, the "no obligation" term being applied to the second party does not mean that the task performance is out of the first party’s interests. So, for the case of the EXW rule, despite the fact that the buyer has not responsibility to the seller for the contract on carriage, it is clear, that the buyer has an interest to have such a contract on carriage that will deliver the goods to the buyer’s place of destination safely and in the time stipulated.
- [2] The examples given herein are to illustrate the syntax of Incoterms® 2010 rules and could conform with any real data occasionally only.
References
- ↑ Incoterms® 2010: ICC rules for the use of domestic and international trade terms – ICC Publication No 715E