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Who is the responsible party for import customs brokerage when carrying out cross-border general trade import business under EXW trade terms?
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I am the procurement head of an integrated manufacturing and trading enterprise in Shanghai. Last month, I just signed a high-end machine tool procurement contract with a German supplier under EXW terms. Last week, the supplier delivered the goods to our designated freight forwarder at the German factory. I originally assumed that the supplier would be responsible for import customs declaration related matters, but the freight forwarder suddenly notified me yesterday that we have to find the import customs broker ourselves. Now the goods have arrived at Yangshan Port for 3 days, I am very anxious, afraid that delays will lead to port detention fees and customs seizure risks, and the finance department is also urging for compliant customs clearance vouchers for bookkeeping. I have been doing business under FOB terms before, and I have no idea about EXW for the first time. I want to clarify who is responsible for import customs brokerage under EXW? If the responsibility is on us, what common pitfalls should we pay attention to when looking for an agent?
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
First of all，we need to clarify a common industry misunderstanding: many enterprises habitually follow the logic of FOB terms and mistakenly believe that the supplier is responsible for import customs brokerage under EXW，but according to INCOTERMS?2020 Rules，under EXW terms，the seller only needs to deliver the goods at the designated location of the factory，and the responsibility for import customs declaration and brokerage is fully borne by the buyer.
If this division of responsibilities is confused，it will trigger a chain of negative reactions: no one will take charge of customs declaration after the goods arrive at the port，and exceeding the customs declaration time limit will incur port detention fees and customs seizure risks. In severe cases，the goods will be detained by customs，which not only delays the equipment commissioning time，but also may lead to compliance penalties，and the finance department cannot complete bookkeeping in time.
Physical risk isolation measures: It is necessary to specify the ownership of import customs brokerage responsibilities in the trade contract，confirm the customs declaration docking process with the freight forwarder in advance to avoid a "vacuum period"，at the same time，prepare core documents such as certificate of origin，packing list，commercial invoice in advance to ensure complete application materials.
Exclusive loss stopping tips: For the current situation that the goods have arrived at the port，you can immediately contact a customs broker with experience in EXW import operation，simultaneously apply to the customs for port detention fee reduction，and coordinate with the supplier to supplement necessary document materials，so as to complete the declaration and customs clearance within 1-2 working days at the fastest.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
From the perspective of customs valuation and customs clearance compliance, the responsible party for import customs brokerage under EXW terms is the buyer, which is a statutory requirement clearly stipulated in INCOTERMS?2020 Rules. In actual operation, it should be noted that the "declaration entity" on the customs declaration form must be the buyer or its entrusted customs declaration enterprise. If it is mistakenly filled in as the seller, it will trigger a customs valuation warning, leading to deletion and re-submission of the declaration, and prolonging the customs clearance time. In addition, the customs will review the entrustment agreement between the buyer and the freight forwarder. If the customs brokerage authority is not clearly specified in the agreement, it may be determined that the declaration entity is inconsistent, leading to the risk of customs seizure. In response to such situations, it is necessary to provide the customs broker with a letter of authorization affixed with the official seal in advance to ensure the compliance of the declaration entity, and simultaneously submit the EXW trade contract as an auxiliary voucher for valuation to avoid valuation disputes. If a declaration error has occurred, it is necessary to immediately submit a situation explanation to the customs, apply for deletion and re-submission of the declaration, and coordinate with the freight forwarder to provide the proof of the arrival time of the goods, so as to shorten the review cycle.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
From the perspective of international logistics path and title control, the freight forwarder under EXW terms is designated by the buyer, and the import customs broker, as the core link of the logistics chain, naturally belongs to the buyer. In actual operation, it should be noted that the title transfer point is when the goods are delivered at the seller's factory. If the buyer does not arrange a customs broker in advance, the freight forwarder will not be able to carry out the declaration work without customs declaration authorization, resulting in port detention of goods, container detention fees and storage fees. In addition, if the selected freight forwarder does not have experience in EXW import operation, problems such as delayed document transmission and wrong declaration of customs information may occur, which further aggravate the customs clearance risk. In response to such situations, it is necessary to clearly require the freight forwarder to have EXW import customs declaration docking capability when entrusting it, and agree on the time limit for document transmission, and reserve 3-5 working days in advance for customs declaration preparation, so as to avoid preparing for customs declaration only after the goods arrive at the port. If the goods have been detained at the port, you can coordinate with the freight forwarder to apply for an extension of the free storage period from the shipping company, and prepare customs declaration materials urgently to reduce additional expenses.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
From the perspective of cross-border tax planning and compliance, the import customs brokerage under EXW terms is the responsibility of the buyer, which directly affects the VAT deduction and tax compliance in the import link. In actual operation, if the customs broker entrusted by the buyer does not declare the dutiable value as required, it may lead to insufficient VAT deduction amount and increase the tax burden of the enterprise. In addition, if the customs broker fails to submit the customs payment voucher in time, the finance department cannot complete the input tax deduction on time, which may lead to the risk of tax inspection. In response to such situations, it is necessary to require the customs broker to strictly take the transaction price under EXW terms (i.e. the delivery price at the seller's factory) as the basis of the dutiable value when declaring, and simultaneously provide the electronic voucher of the customs payment voucher to ensure that the finance department can enter the account and deduct in time. If there is an error in the declaration of the dutiable value, it is necessary to immediately apply to the customs to modify the customs declaration form and adjust the dutiable value to avoid affecting the VAT deduction and tax compliance.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
From the perspective of cross-border foreign exchange receipt and payment compliance, the import customs brokerage under EXW terms is the responsibility of the buyer, which directly affects the compliance of foreign exchange receipt and payment. In actual operation, if the declaration entity on the customs declaration form is inconsistent with the foreign exchange receipt and payment entity, it will trigger a compliance warning of the State Administration of Foreign Exchange (SAFE), resulting in obstruction of foreign exchange settlement and account closing. In addition, if the customs broker fails to submit the electronic data of the customs declaration form as required, the enterprise cannot complete the foreign exchange receipt and payment verification in the foreign exchange monitoring system, which may affect the subsequent cross-border foreign exchange receipt and payment quota. In response to such situations, it is necessary to ensure that the declaration entity on the customs declaration form is consistent with the foreign exchange receipt and payment entity, and require the customs broker to submit the electronic data of the customs declaration form within 1-2 working days after customs clearance, so that the enterprise can complete the foreign exchange receipt and payment verification in time. If the declaration entity is inconsistent with the foreign exchange receipt and payment entity, it is necessary to immediately submit a situation explanation to SAFE, and coordinate with the customs broker to modify the information of the customs declaration form to ensure the compliance of foreign exchange receipt and payment.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
From the perspective of international trade legal risk avoidance, the ownership of import customs brokerage responsibilities under EXW terms needs to be clearly agreed in the trade contract. If it is not clearly stated in the contract, it may lead to responsibility disputes between the buyer and the seller. According to INCOTERMS?2020 Rules, the buyer is responsible for import customs declaration under EXW terms, but if the contract stipulates that the seller is responsible, the contract agreement shall prevail. In actual operation, many enterprises fail to specify the customs declaration responsibility in the contract, leading to mutual shirking between the two parties after the goods arrive at the port, resulting in port detention, customs seizure and other problems. In response to such situations, it is necessary to clearly specify in the trade contract that "import customs brokerage is the responsibility of the buyer", and agree that the seller shall cooperate in providing necessary document materials (such as certificate of origin, packing list, commercial invoice, etc.). If the seller fails to provide documents in time leading to customs clearance delay, it shall bear the corresponding liability for breach of contract. If the contract has not been clearly specified, it is necessary to immediately negotiate with the supplier to supplement the agreement, clarify the ownership of responsibilities, and avoid the expansion of disputes.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
From the perspective of on-site customs inspection, the import customs brokerage under EXW terms is the responsibility of the buyer, which directly affects the response efficiency of on-site inspection. In actual operation, if the customs broker does not understand the inspection requirements of the customs in advance, it may be unable to provide necessary inspection materials (such as product manuals, test reports, etc.) on site, leading to extended inspection time and even the risk of customs seizure. In addition, if the customs broker fails to notify the buyer to be present to cooperate with the inspection in time, the customs may not be able to confirm the goods information, which further aggravates the inspection risk. In response to such situations, it is necessary to require the customs broker to understand the customs inspection requirements in advance, prepare inspection materials such as product manuals and test reports simultaneously, and agree to notify the buyer to be present to cooperate with the inspection within 1 hour after receiving the inspection notice. If inspection delay has occurred, it is necessary to immediately coordinate with the supplier to supplement the inspection materials, and apply to the customs for priority inspection to shorten the inspection time.