Incoterms 2020 · Any mode
EXW (Ex Works): who pays what
The short answer
Who pays what under EXW
| Step | Under EXW |
|---|---|
| Export clearance | Buyer |
| Main freight | Buyer |
| Cargo insurance | Buyer (not required) |
| US customs clearance | Buyer |
| US import duty and fees | Buyer |
| Unloading at destination | Buyer |
| Risk passes to the buyer | When the goods are placed at the buyer's disposal at the named place, before loading |
In the contract, EXW is followed by the seller's premises or another named place: for example "EXW Ningbo factory, Incoterms 2020".
What EXW means for a US importer
EXW puts the least on the seller of any rule. The price looks lowest because the buyer pays for everything the other rules would bundle into it: the truck from the factory, export formalities, origin terminal charges and the ocean freight.
Export clearance is the buyer's job under EXW. A US buyer usually cannot file an export declaration in the seller's country without a local agent, so in practice the seller often does it anyway, outside the contract.
Loading at the seller's premises is also the buyer's risk. If the factory's forklift drops a pallet while loading your truck, that loss is yours under EXW.
US customs value under EXW
The EXW price is normally the starting point for the US dutiable value, because the freight to the United States is paid separately and is not part of the price.
Check the duty for your product in the Gateway tariff calculator.
Watch out for
- If the seller will load the truck and clear export anyway, FCA at the seller's premises says so in the contract and moves the loading risk to the seller.
- Budget for origin charges (trucking to the port, terminal handling, export documents) that FOB and FCA prices already include.
EXW questions
Who pays export clearance under EXW?
The buyer. Under EXW the seller does not clear the goods for export; the buyer, or an agent working for the buyer in the seller's country, does.
When does risk pass under EXW?
When the seller places the goods at the buyer's disposal at the named place, before they are loaded onto the buyer's truck.
Is EXW a good term for importing from China?
Rarely. A US buyer usually cannot handle export clearance in China itself, and it pays every origin charge separately. FCA or FOB usually gives the same freight control with fewer gaps.
Sources
- International Chamber of Commerce: Incoterms 2020
- International Trade Administration (trade.gov): Know Your Incoterms
- 19 U.S.C. 1401a(b)(4)(A): price actually paid or payable
Incoterms® is a registered trademark of the International Chamber of Commerce. This page explains the rule in our own words; the ICC publication is the authoritative text.