EU Tightens Sanctions Compliance: Using EXW Incoterm
- GMCCTradeteam
- Jun 13
- 2 min read
The European Commission has issued new guidance clarifying that the use of the EXW (Ex Works) Incoterm, outlining how its use does not exempt exporters from their obligations under EU sanctions law. This change is particularly significant for businesses exporting goods from the EU, as it affects how compliance with sanctions is demonstrated.
Understanding the Change
Under the EXW term, the buyer assumes responsibility for the goods once they are made available at the seller's premises. However, this arrangement often results in the seller lacking visibility over the goods' subsequent movement, making it challenging to ensure compliance with EU sanctions.
The European Commission emphasises that private contractual terms, such as EXW, do not override EU sanctions obligations. Exporters are required to ensure that their goods do not end up in prohibited destinations, regardless of the Incoterms used.
Actions for Exporters and good to know to align with the updated guidance:
Review Incoterm Usage: Consider using alternative terms like FCA (Free Carrier) or DAP (Delivered at Place), which provide better control and documentation over the export process
Enhance Due Diligence: Implement robust due diligence measures to track the end-use and end-users of your products, ensuring they do not reach sanctioned entities or regions.
Maintain Comprehensive Records: Keep detailed records of all transactions, including transport documents and customs declarations, to demonstrate compliance.
Further Resources
For a detailed overview of the updated guidance, refer to the European Commission's factsheet: EU Sanctions Factsheet: Incoterms “Ex Works” Rule (EXW)
Staying informed and adjusting your export practices accordingly is crucial to ensure compliance and avoid potential legal repercussions.
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