Learning more about Incoterms 2000

EX WORKS (EXW) PART II – The Seller’s Obligations According to the International Chamber of Commerce (ICC) the first Incoterm Ex Works (EXW), at a named place, is defined as “the seller delivers when he places the goods at the disposal of the buyer at the seller’s premises or another named place (i.e. works, factory, warehouse, etc) not cleared for export and not loaded on any collecting vehicle”. Professor Jan Ramsberg, the chairman of the ICC Working Part on Trade Terms, identified ten obligations that the seller might need to fulfil in terms of Ex Works: (1) the provision of goods in conformity with the contract; (2) licences, authorisations and formalities; (3) contracts of carriage and insurance; (4) delivery; (5) transfer of risks; (6) division of costs; (7) notice to the buyer; (8) proof of delivery, transport documents or equivalent electronic message; (9) checking, packaging, marking; and (10) other obligations. The Provision of goods in conformity with the contract implies that the documents stipulated in the contract of sale must be provided. If in respect of the licences, authorisations and formalities the buyer requires the seller’s assistance, the costs should be for the account of the buyer. The seller has no obligation in respect of the contracts of carriage and insurance. The delivery of the goods must only be at the named place. However, if the buyer requires the seller’s assistance with the loading of the goods, the words “loaded upon departing vehicle” should be added after EXW in the contract of sale. As for the transfer of risks, the seller bears all risks of the loss or damage to the goods until delivery has taken place at the named place. In relation to the division of costs the seller must pay all the costs relating to the goods up and to delivery at the named place. The seller must give sufficient notice to the buyer as to when and where the goods will be placed at his disposal. The seller has no responsibility as to the proof of delivery, transport documents or equivalent electronic message. Depending on the stipulations in the contract of sale the checking, packaging, marking costs are for the seller’s account. As for other obligations, the buyer may request the seller’s assistance with information in respect of the goods and the export requirements. In next week’s issue we will focus on the buyer’s obligations under Ex Works (EXW).