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Incoterms: Exwork

Posted in General Information - 1 Nov 2017, 8:30 AM

The word ‘ex’ is often referred to ‘something that one used to be’ or ‘former.’ However, Ex Works has a different meaning when it comes to International Chamber of Commerce or ICC. It means the delivery which is done in a place that belongs to the seller in the origin country of the goods. The place that belongs to the seller can be either a factory, a warehouse, or any other types of building suitable for business and the seller delivers the goods at the buyer’s disposal. The goods are also not cleared for export and not loaded on any vehicle. It means the seller has the minimum obligation while the buyer has to bear all the existing costs and potential risks during the delivery.

In Ex Works, the seller gets to use any transport mode, especially since there are many options for transportation to deliver the goods. To be more exact, the seller’s obligations are:

  • Providing the goods according to the agreed contract.
  • Being in charge of the goods’ licenses, authorizations, and formalities.
  • Being in charge of the goods’ contract of carriage and insurance.
  • Delivering the goods.
  • Bearing all the risks of loss or damage of the goods until they have been delivered.
  • Regarding the division of the costs, the seller must pay all costs related to the goods before the goods have been delivered.
  • Notifying the buyer regarding the delivery of the goods. It includes the time and the place the goods will be placed at the buyer’s disposal.
  • Being in charge of checking, packaging, and marking the goods before the delivery. Who says they do not have to pay any costs at all? In this case, they do. The costs include the checking operations, expenses in packaging, and the appropriate marking.
  • The seller’s other obligations include rendering the buyer at the latter’s request, risk, and expense. It means the seller has to provide as much information as possible regarding the procuring insurance.

What about the buyer’s obligations? In Ex Works, the buyer has the obligations, which include:

  • Paying the price of the goods according to the agreed contract.
  • Being in charge of the goods’ licenses, authorizations, and formalities.
  • Being in charge of the goods’ contract of carriage and insurance.
  • Taking the delivery of the goods.
  • Bearing all the risks of loss or damage to the goods during delivery and after. They also have to give notice to the seller that they have accepted the goods according to the agreed date of the delivery.
  • Regarding the division of the costs, the buyer must pay all the existing costs related to the goods after they have been delivered, additional costs if there is a failure in taking the delivery, taxes, and other charges regarding customs formalities.
  • The buyer’s other obligations include notifying the seller one the goods have already been delivered and accepted including the proof. The proof may consist of a transport document or an equivalent electronic message.

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