Under the Ex Works 2020 Incoterms (Exw), the transport is fully organized by the buyer.
The transfer of risks takes place when the goods have been placed at the buyers’ disposal ready to be loaded by the buyer himself or the carrier of his choice.
In other words, it is under the buyer’s responsibility to load the goods either himself or via the carrier of his choice.
With the 2020 EXW Incoterms, the delivery of the goods can be made in the seller’s premises (warehouse for example) as well as in any named place.
Please note that if the place of delivery is not specified clearly in the sales contract, it could take place at the seller’s discretion. This is why it is HIGHLY recommended to always be as accurate as possible by simply including a precision such as Incoterm 2020 …… followed by the full address or place.
If for some reasons the seller helps to load the goods during the loading process, the risks remain under the buyer’s responsibility.
Regarding custom obligations, the seller is not required to be involved in the clearance process.
Overall, we can say that EXW 2020 Incoterms are adapted in:
-Domestic transactions or transactions which takes place in a custom union (European union for instance)
-When the seller is ready to sell to International Buyers but does not want to deal with all the risks and complexity which result from it.
From the Importer’s perspective, this incoterm can be chosen if the buyer is either used to operate in the exporter’s country or when he can rely on a third party which can handle the whole import process.
One must bear in mind that under the EXW 2020 Incoterms rules, the seller can assist the buyer for obtaining documentation necessary for clearance if requested. However, since the seller is in no way required to handle the clearance process, it is strongly advised to select at least FCA 2020 Incoterms for international transactions.
Overall the seller’s obligations are :
-Invoice in line with the sales contract (A1)
Unless agreed otherwise, this document can be issued indifferently in Electronic or Paper form. (A1)
-Bear the costs of weighting, counting and packaging the goods so that they can be transported (except for some commodities which do not need to be packaged)(A8)
-Deliver the goods at a named place ready to be loaded at an agreed time or within an agreed period (A2).
If a precise point of delivery in the named place is not specified, the seller is free to deliver wherever he wants. (A2)
-Give notice of the delivery date and place so that the buyer can organize transport (A10)
-Providing at the buyer’s cost, the necessary documentation needed by the buyer for insuring the goods. (A5)
-Providing Assistance at the buyer’s risk and cost for getting documentation in order to clear the goods for import/export (licence, security clearance, pre-shipment inspection etc..)(A7)
Obligations of the Buyer are:
-Paying the goods according to the sales contract (B1)
-Must take the delivery of the goods based on the delivery terms agreed with the seller(B2)
If the buyer fails to take delivery of the goods delivered according to the contract terms, he will be held responsible for any resulting loss or damage caused to the goods. (B3)
-Must pay for all the costs from the moment they have been delivered (B3)
-Must provide the proof (written) of having taken the delivery (B6)
-Handle formalities regarding export/import clearance, customs, taxes, duties ,mandatory pre-shipment inspections and bear all the associated costs(B7).
Please note that regarding insurance of the goods against risk of loss or damage, neither the buyer nor the seller has the obligation to get an insurance contract.