EXW
Also known as: Ex Works, Ex works
EXW, Ex Works, means the seller makes the goods available at their own premises and arranges nothing further. From that moment the buyer bears all costs and all risk, including loading.
Who arranges what under EXW?
The seller puts the goods ready at the agreed place, usually their factory or warehouse, and tells the buyer when they can be collected. Everything after that is for the buyer: loading, pre-carriage, export formalities, main carriage, import formalities and delivery. Without that notice of availability the buyer does not know when to come. That makes EXW the term with the fewest obligations for the seller and the most for the buyer. In practice the seller often loads anyway, because they have the forklift, but formally that is the buyer's risk. If a pallet falls, there is no contractual basis to hold the seller to account unless you have recorded that separately. The buyer must send a carrier, arrange access to the site and organise the export declaration in the seller's country. With a Dutch seller that means an export declaration in DMS by someone established in the EU. That is exactly the step that almost always goes wrong on export to a buyer outside the EU.
Where does the risk pass under EXW?
The risk passes the moment the goods are placed at the buyer's disposal at the agreed place, so before they are loaded. Damage during loading is therefore for the buyer's account. That is the earliest transfer point of all eleven Incoterms, and it is hard to prove if the contract only names a town. Because that moment is hard to prove, parties often agree a full address and a time window in the contract. Without that precision there is little to hold on to when damage occurs. EXW Eindhoven says nothing if the seller has three sites in Eindhoven. EXW followed by street, number, postcode and a date on which the goods stand ready does. If the buyer does not turn up, the risk has formally already passed, but the goods are still in the seller's warehouse. Storage, insurance and the space they occupy are then a cost EXW does not allocate. Record what happens if the collection period expires, including who pays the extra storage.
Why is EXW awkward on export?
The export declaration must be filed by or on behalf of someone established in the EU. Under EXW that obligation sits formally with a buyer who often is not, so the seller files it in practice anyway. A US or Chinese buyer cannot be the declarant in the Netherlands, and a forwarder acting for them needs a power of attorney and an EORI number that are rarely in place. The seller then runs a risk they meant to contract out of: without proof of export they cannot support the zero rate for VAT. The exit confirmation goes to the declarant, and if that is not the seller, they do not have the document at a VAT audit. FCA solves that: the seller files the export declaration, loads if delivery is at their premises, and receives the proof of exit themselves. The ICC therefore advises EXW only for domestic trade and recommends FCA for export. Anyone still using EXW on a shipment leaving the EU must record in the contract that the seller in fact handles export.
What does EXW mean for the customs value?
The EXW price contains no freight and no insurance. On import into the EU those costs up to the external border must therefore be added to reach the customs value, together with any loading costs the buyer has borne. The declarant needs the freight invoice and, if there is one, the insurance policy. An estimate is not allowed if the actual costs are known or can be known. That makes EXW heavier to administer than CIF, where freight is already in the price. The declarant has to find the freight invoice per shipment and take off the intra-EU part. Without a breakdown on that invoice Customs will not accept the deduction and you pay duty on carriage that took place inside the EU. On the import declaration you enter EXW as the delivery term, with the place of delivery in the country of export. The add-back to the external border follows directly from that. If the Incoterm on the invoice does not match the declaration, the customs value is wrong in one direction or the other.
How do you record EXW properly in the contract?
Always name a full address and not only a town. EXW Eindhoven says nothing if the seller has three sites in Eindhoven; EXW followed by street, number and postcode does. Add the edition: EXW [address] (Incoterms 2020). Without an edition it is unclear whether the parties mean 2010 or 2020, and under EXW the difference includes the wording around loading. Also agree explicitly who loads and who bears the risk during loading, because that is the point where EXW most often leads to argument. Finally, record which party files the export declaration and which documents the seller supplies. If the seller in fact files the declaration, that belongs in the contract instead of remaining a silent habit. Put a collection period in the contract as well. EXW ends for the seller when the goods stand ready, but without a period they stay until the buyer comes. A period of one working week, with storage thereafter for the buyer's account, stops a warehouse filling up with shipments that have already been delivered under the contract.
How does EXW appear on the import declaration?
On the import declaration you enter the delivery term as a three-letter code plus the named place. Under EXW that place is the seller's premises, so in the country of export. Customs uses that combination to see which costs are already in the invoice price and which you still have to add up to the EU external border. The invoice must carry the same term and the same place as the declaration. If the invoice says EXW Shanghai and the declaration says FCA Rotterdam, the build-up of the customs value no longer holds. The declarant then has to reconstruct freight to the EU border from loose invoices, and if one of those pieces is missing, an estimate follows that rarely favours the importer. Under EXW the add-back is the largest of all the terms, because the price stops at the seller's premises. Loading, pre-carriage, port costs, main carriage and insurance to the EU border all belong in it. Without those documents in the file, the declaration cannot be supported at a later audit.
Which documents and pitfalls belong with EXW?
The minimum set is the commercial invoice with EXW and the delivery address, a packing list, and the notice of availability. The buyer also needs an export declaration in the seller's country and, on import into the EU, the freight invoice up to the external border. Without the notice of availability the transfer point cannot be proved if there is damage on the way. The most common pitfall is export from the EU under EXW to a buyer not established in the EU. The export declaration then sits formally with the buyer, is filed in practice by the seller, and the proof of exit does not reach the seller of its own accord. At a VAT audit the zero-rate evidence is then missing. The second pitfall is loading without an agreement. The seller's forklift loads, something falls, and nobody is insured because the risk already sat with the buyer while the seller was in fact acting. Record loading, export and the collection period in writing, or use FCA. For international shipments that is almost always the better choice.