INCOTERMS2000
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EXW
EXW (Ex Works)
- represents the minimum involvement of the seller and the maximum
involvement of the buyer in the movement of the goods from the point
of 'works'.
The statement
'EXW' must be qualified to give the address of the 'works', which
may be a factory, site or warehouse etc. Care should be taken to
note that the actual point of manufacture might well vary from the
place where the seller operates their commercial undertaking.
Under INCOTERMS
2000, risk and responsibility pass from the seller to the buyer
when the cargo is made available on the ground at the 'works', at
or on the agreed future date or future time, uncleared through customs.
The seller must
give advance notice of availability (how much notice would have
to be predetermined e.g. through the sales contract). This point
is important as the buyer assumes liability for all risks from the
time of availability on the ground and is therefore exposed from
that moment up to the event of collection. During this period, the
buyer is liable for all risks to the cargo, even though they are
not yet under the buyer's physical control, and this is further
aggravated by the fact that the goods are generally uninsured throughout
this period too.
The buyer and
seller should only consider EXW when the buyer can actually arrange
the customs clearing prior to export and for the immediate collection
of the cargo on availability. The Seller should note that the export
of the goods is NOT guaranteed under EXW and the buyer may, for
example, opt to keep the goods in the country of origin.
Although EXW
is a popular term it remains complex. EXW is rarely compatible with
documentary credits (for example) - and the term FCA often offers
a more manageable alternative.
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