I am having a rather large debate with our director regarding Ex-Works (loaded) and FCA Sellers Premises Incoterms. Our director wants to use FCA Sellers Premises for our old Ex-Works Loaded customers, but I believe that this is incorrect, because that would then make us responsible for clearing the goods for export. But if the goods are only being moved within the EU, and there is no customs entry as such (clearing goods for export), then what is the difference between Ex-Works Loaded and FCA Sellers Premises?

Responsibility for loading under the Ex Works term (Incoterms 2010) and the risk involved rests with the Buyer (Consignee) or the agent acting for the overseas Buyer whereas under the FCA (Free Carrier) Sellers Premises term (Incoterms 2010) the Consignor or Seller of the goods has that responsibility. The responsibility for “clearing the goods for export” technically rests with the exporter in the FCA case but it was not made clear enough in the Incoterms 2000 set of terms how this would work. The Incoterms® 2010 Rules clearly says that the seller is responsible for clearing the goods for export under FCA Seller's premises so be careful if you are using conventional freight companies.  It still appears wrong to us, though, that the seller should have to pay for this declaration particularly if the carrier is one of the express door-to-door operators such as DHL, UPS, Fedex or TNT. Another issue in this world of health and safety is that your Health & Safety manager is unlikely to allow an unknown agent or forwarder to enter your site with their own loading equipment, the risk would be too great. The point you made about dispatches to the EC brings up an interesting point, there being no Customs presentations at Export from the UK or Import into the destination member state assuming the goods are not ‘Controlled’ in some way (Licensable, Excise, etc) then why not stop trying to bend the Incoterm to suit and simply construct a short contract term which should allocate responsibility for Loading, Transportation and Risk of Loss or damage between you and your customer.

We are normally reluctant to suggest constructing your own contract term to take the place of an Incoterm because Incoterms have been in place since 1936 and you may not be able to cover all situations where Duty and import Tax are payable but a straightforward EC sale is not very complicated. You must remember your responsibilities in connection with VAT such as quoting your customers Vat number on your invoice, retaining evidence of export from the UK and any Intrastat (Intra Community Trade Statistics ) reporting if you are over the qualification level.

 

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