Transportation Operations LINCS Practice Exam

In an Ex Works arrangement, who is responsible for customs clearance?

1. The shipping company

2. The seller only

3. The buyer

4. The government authorities

The correct answer is: The buyer

In an Ex Works (EXW) arrangement, the responsibility for customs clearance lies with the buyer. Under this arrangement, the seller makes the goods available at their premises or another named place (such as a factory, warehouse, etc.), but they do not bear responsibility for loading the goods onto a vehicle or for transportation to the buyer's location. The buyer assumes the entire responsibility for the movement of the goods, which includes not just transporting the goods, but also handling all necessary customs procedures, including customs clearance. This arrangement places a significant burden on the buyer, as they must ensure they are compliant with customs regulations in their home country, that all duties and taxes are paid, and that the goods can legally enter their market. Therefore, the transfer of risk and responsibility for logistics begins as soon as the buyer takes possession of the goods at the seller's premises, highlighting the need for the buyer to be well versed in international logistics and customs procedures.