“𝐈𝐧𝐜𝐨𝐭𝐞𝐫𝐦𝐬® 𝐢𝐧 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐞: 𝐑𝐞𝐝𝐮𝐜𝐢𝐧𝐠 𝐑𝐢𝐬𝐤𝐬 𝐚𝐧𝐝 𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧𝐢𝐧𝐠 𝐆𝐥𝐨𝐛𝐚𝐥 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 – 𝐄𝐗 𝐖𝐎𝐑𝐊𝐒”

In short, 𝐈𝐧𝐜𝐨𝐭𝐞𝐫𝐦𝐬® are a set of global rules for sales and purchase agreements in international trade. They define responsibilities for transportation, costs, and risks, and are absolutely essential to avoid misunderstandings and lack of clarity in negotiations, thereby reducing disputes.

 The use of Incoterms® in commercial documents strengthens trust between buyers, sellers, and all other parties involved in the operations.

Today, I highlight one of the most widely used in international trade, its application, and the risks of using it in a way that differs from what the rule establishes:

𝐄𝐱 𝐖𝐨𝐫𝐤𝐬 (𝐄𝐗𝐖)

This is a classic case in which the seller makes the goods available at their factory, warehouse or any convenient place and the buyer is fully responsible for export procedures, including customs clearance at the local customs office. Yes—the rule is clear : In the case of an Ex Works agreement, according to ICC standards, 𝐭𝐡𝐞 𝐛𝐮𝐲𝐞𝐫 𝐧𝐨𝐭 𝐨𝐧𝐥𝐲 𝐚𝐬𝐬𝐮𝐦𝐞𝐬 𝐫𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐟𝐨𝐫 𝐭𝐫𝐚𝐧𝐬𝐩𝐨𝐫𝐭𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐬𝐭𝐬 𝐮𝐩 𝐭𝐨 𝐭𝐡𝐞 𝐩𝐨𝐫𝐭 𝐨𝐟 𝐬𝐡𝐢𝐩𝐦𝐞𝐧𝐭, 𝐢𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐟𝐫𝐞𝐢𝐠𝐡𝐭, 𝐚𝐧𝐝 𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐚𝐥𝐬𝐨 𝐫𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐥𝐞 𝐟𝐨𝐫 𝐚𝐥𝐥 𝐜𝐨𝐬𝐭𝐬 𝐚𝐧𝐝 𝐩𝐫𝐨𝐜𝐞𝐝𝐮𝐫𝐞𝐬 𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐭𝐨 𝐞𝐱𝐩𝐨𝐫𝐭 𝐫𝐞𝐠𝐢𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧.

However, since negotiations and commercial agreements aim for mutual benefit between both buyer and seller, in practice we often see sellers taking on the operational responsibility of arranging export registration with their local customs authorities—even when the cost of this stage in the export process has already been factored into the sales price.

In my next post, I will discuss 𝗙𝗢𝗕 and its specificities. 😉💡 

Image credit: Aceris Law – Incoterms in International Trade

https://www.acerislaw.com/incoterms-in-international-trade/