The Incoterms rules EXW, FCA and DAP differ mainly in which party to the transaction is responsible for organising transport and for the customs declaration. Under EXW (Ex Works) the buyer takes the goods at the seller's premises and is responsible for the whole of transport and clearance, including export clearance; under FCA the seller delivers the goods to a specified carrier and handles export clearance, while under DAP the seller delivers the goods to the destination, but import clearance and duty are already the buyer's responsibility. Below we show how the choice of Incoterms rule affects who files the customs declaration.
Contents
In brief — what you will learn
- ✓ How to prepare the process and the documents
- ✓ How the declaration and inspection work
- ✓ How to maintain compliance and settlements
How to prepare the process and the documents
Split of responsibilities between the parties
It is essential to distinguish the responsibilities between the importer, the exporter and the customs representative, because this determines the scope of data passed to the official systems. Under EXW, the buyer takes on the whole of the responsibility for transport and formalities; FCA shifts part of it to the seller up to the point the goods are handed to the carrier; while DAP obliges the seller to deliver the goods to a specified address — without arranging import clearance.
Minimum data set for the declaration
Before the vehicle is presented, it is worth checking the commercial and transport documents for completeness. The minimum set includes: a commercial invoice with the customs value, a goods specification with the CN/HS code, a CMR document or bill of lading, and — for DAP — confirmation of delivery to the destination. Inconsistencies between the invoice and the transport document are the most common reason clearance is held up by the customs office, so it is worth introducing a completeness check before the vehicle sets off.
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How the declaration and inspection work
Operational stages from pre-notification to release
It is worth preparing an internal checklist linking documentation requirements to the responsibilities of logistics, accounting and the person responsible for compliance. The stages include: pre-notifying the goods, filing the customs declaration (an Entry Summary Declaration or Import Declaration), document checks by the customs office, a possible physical inspection, and release of the goods. The reference points are official materials: GOV.UK (Goods Vehicle Movement Service guidance), EC TAXUD (EU Customs Tariff TARIC), and KAS (the National Revenue Administration).
The most common risk points and how to limit them
The most common causes of delay are: incorrect tariff classification of the goods, a mismatch in customs value between the invoice and the declaration, one of the parties lacking an EORI number, and an incorrectly stated country of origin. Under EXW, errors are especially common when the exporter fails to supply the full set of export documents and the importer has no full control over the process. Implementing a pre-shipment verification procedure — based on official sources, not unofficial write-ups — significantly reduces this risk.
How to maintain compliance and settlements
Record-keeping, corrections and evidence of due diligence
Complete record-keeping of customs documents is mandatory for at least 5 years. You should keep: customs declarations with the MRN number, commercial invoices, proof of transport, correspondence with the customs office, and any inspection reports. If a declaration needs correcting, it is essential to keep the originals and document the reason for the change — this is evidence of due diligence during a tax inspection and helps avoid penalties under the Union Customs Code.
Working with a customs agency and internal audit
A customs agency acting as a direct or indirect representative takes on responsibility for the accuracy of the data in the declaration in line with the authorisation granted by the principal. A regular internal audit — at least once a quarter — helps detect systemic errors in classification, valuation or the description of the goods before they reach an official inspection. It is good practice to have a sample of 10% of declarations checked by someone not involved in preparing them.
Summary
In summary: for Incoterms EXW, FCA, DAP explained, the key is to run the process according to current official guidance, with a clear split of responsibilities and documentation of every decision. Choosing the right trade rule determines the scope of customs formalities, the split of costs and the parties' responsibilities — so it must be a conscious decision based on an analysis of the transaction terms. This approach reduces delays, cuts the number of corrections and makes it easier to defend the settlements during an inspection. If any requirement is unclear, check the current guidance on GOV.UK, EC TAXUD or KAS before making a final decision.
Legal basis and sources
- GOV.UK: Goods Vehicle Movement Service guidance
- EC TAXUD: EU Customs Tariff TARIC
- KAS: National Revenue Administration
If the rules or system notices are updated, check the current GOV.UK or KAS guidance before submitting a declaration.
Frequently asked questions
What is the difference between the EXW and FCA rules regarding export customs clearance?
Under EXW (Ex Works), the buyer takes on full responsibility for all customs formalities, including export clearance in the exporter's country — which in practice can be problematic when the foreign buyer is unfamiliar with local procedures. Under FCA (Free Carrier), the seller organises and pays for export clearance up to the point the goods are handed to the carrier at the agreed location, which is more favourable for the buyer and removes the risk of errors on the importer's side in the country of export.
Who is responsible for import clearance under the DAP rule?
Under DAP (Delivered at Place), the seller delivers the goods to the agreed destination and bears all transport costs and risk up to that point. However, import clearance — including duty and VAT — is solely the buyer's (importer's) responsibility. This is a common source of misunderstanding, which is why the sales contract should explicitly state who arranges the customs agency and covers the costs on the import side.
What documents are needed for customs clearance under the FCA rule?
Under FCA, export customs clearance requires: a commercial invoice with the transaction value, a goods specification with the HS/CN code, a transport document (CMR, AWB or bill of lading), a certificate of origin (if required by the importing country), and the exporter's EORI number. On the importer's side, confirmation that the goods were handed to the carrier is also needed, as proof that risk has transferred and as the basis for settling the customs value.
How has Brexit affected the use of Incoterms in trade between the United Kingdom and the EU?
After Brexit, trade between the UK and the EU requires full customs clearance in both directions. The Incoterms rules themselves have not changed, but applying them in practice requires taking into account two separate customs systems: the British one (HMRC, CDS) and the EU one (TARIC, AES). Under DAP, the exporter must ensure an export declaration is filed in the UK, and the importer an import declaration in the EU country — including settling EU import VAT.
What are the consequences for a company of incorrectly stating the Incoterms rule in customs documents?
Incorrectly stating the Incoterms rule can result in the customs office challenging the customs value — and therefore assessing additional duty and VAT — a delay in releasing the goods, and, in extreme cases, proceedings for breach of customs rules under Article 15 of the Union Customs Code. The Incoterms rule directly affects how the customs value is established under the transaction value method (WTO/WCO), so it must be consistent with the invoice and the sales contract.
Related guides
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