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Meet our writer. Written by our resident freight forwarding and shipping expert. Bob Ronai→

As with all eleven of the Incoterms 2020 rules, article A1 tells us that the seller must provide the goods and the commercial invoice in conformity with the contract of sale and any other evidence of conformity that may be required by the contract. That means, if relevant for the type of goods, then something like an analysis or inspection certificate, both actions taking place before the provision in A2.

A2 being about delivery tells us for EXW the seller simply must deliver the goods by placing them at the disposal of the buyer. No document here other than A10’s notice.

A6 tells us that the seller has no obligation to the buyer to provide a delivery/transport document.

A7 instructs us that export clearance formalities too are the buyer’s. In far too many cases though, the buyer’s forwarder export clears the goods in the seller’s name without the seller knowing or authorising it, and without providing the seller any documentary evidence. Imagine the confusion when Customs knock on the seller’s door with an export query or, worse still, a penalty.

A8 obliges the seller to package the goods if that is usual for those goods. This would typically mean producing a packing list.

A9 instructs that the seller pays all costs until the goods have been delivered as in A2, then B9 puts all subsequent costs to the buyer.

A10 requires the seller to give the buyer any notice needed to enable the buyer to take delivery of the goods. Such notice might be a simple email message. So no, there are no “shipping documents” prepared by the seller in EXW and this is one of the many reasons that make the rule completely incompatible with letters of credit.

Reader’s comment:

Had a similar situation about a week ago. We (Dutch company) sold to a UK based company on EXW basis. An Azerbeijani forwarder (with a German office) was involved to export to Azerbaijan.

They kept on asking for our EORI number to issue the export document, and every time I told them nicely to bugger off.

I told them to get in touch with a customs broker and issue the export document with our UK customer as exporter of record. It has gone quiet now for a week, so I guess they sorted it out eventually.

Reader’s comment:

Would be interesting to know on what grounds the buyer’s forwarder clears the goods in the seller’s name and if it has the legal attribution to obligue the seller.

Bob’s response:

I believe such forwarders do so out of ignorance and perceived pragmatism. Try the experiment of telephoning six forwarders, tell them you are thinking of selling Ex Works for an export and ask them how they would go about the export clearance formalities. I would not be surprised if five or all six told you they would do it in your name.

Reader’s comment:

I actually had to resolve a major case of just this problem at one of my previous posts… but it was actually even worse since the seller issued the export documents in the name of the buyers fiscal entity based in a neighbouring EU country, at the same time issuing a commercial invoice without VAT… guess how much fun it was to get this resolved…

Once my head stopped hurting (because I started hitting my head on my desk in the process to a steady mantra of: ”why? Seriously? … so your friend who knows about export told you what??” And my favourite “can’t we just send them all to jail?”), I did feel some satisfaction, I guess.

Want to find out more about Incoterms® Rules 2020?

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