Definitions

ex-works

Ex Works

[eks-wurks]
Ex Works (EXW) is an incoterm. It is one of the simplest and most basic shipping arrangements between a buyer and a seller. An Ex-Works shipment places the minimum responsibility on the seller and the greatest responsibility on the buyer. In an Ex-Works transaction, goods are made available for pickup at the seller's factory or warehouse and "delivery" is accomplished when the merchandise is released to the buyer, their agent or freight forwarder. The buyer is responsible for making arrangements with their forwarder for local collection of the freight, insurance, export clearance, paperwork and all other handling charges. The buyer pays all transportation costs and bears all risks for bringing the goods to their final destination.

The main reason to avoid using this term is that the buyer is the exporter, as stated in the introduction to the term in "Incoterms 2000" International Chamber of Commerce publication 560: "This term should not be used when the buyer cannot carry out the export formalities directly or indirectly. In such circumstances, the FCA term should be used, provided the seller agrees..." Simply put, the seller is NOT the exporter, it is the buyer who is the exporter. This therefore can have ramifications on VAT or GST obligations of the seller, as well any export permits or licences which might have to be applied for when the buyer is not a resident of, or registered in, the exporting country. The correct term in almost all circumstances where EXW might be thought about is in fact "FCA seller's premises."

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