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Friday, 27 September 19
LOWDOWN ON INCOTERMS 2020 OVERHAUL - BALTIC EXCHANGE
 KNOWLEDGE TO ELEVATE
This ninth revision of Incoterms is changed in style and substance. The revisions improve certain aspects of Incoterms 2010 and address issues which were not prevalent in 2010. The introduction to Incoterms 2020 includes a detailed explanation of how to choose the most appropriate Incoterms rule for a sale contract.
Incoterms are a collection of internationally recognised standardised trade terms published by the ICC and widely used in domestic and international sales. Incoterms cover various practical elements of a sale contract such as the primary obligations of the seller and the buyer; the responsibilities of each; time of delivery and the transfer of risk. They also deal with insurance, export and import clearance and the division of other costs pertaining to the delivery of goods.
The ICC’s revision of Incoterms aims to respond to changes in the market so that they continue to be relevant and useful to global trade. With this particular revision, the ICC aims to take account of:
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The growth of the global economy and greater access to markets worldwide
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Increasing attention to security in the transportation of goods
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The need for flexibility when considering insurance coverage, depending on type of goods and transport
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Calls from banks for an on-board bill of lading in some financed sales under the Free Carrier (FCA) rule
For existing contracts, Incoterms 2010 will continue to apply even if performance of the contract will take place in 2020 unless the contract says otherwise. For contracts entered into between September 2019 and January 2020, it is prudent for the parties to state which set of Incoterms is to apply, especially if performance will take place after 1 January 2020.
After 1 January 2020, courts and arbitrators can be expected to assume that any reference to Incoterms in new contracts is intended to be a reference to Incoterms 2020, unless there is evidence to the contrary.
The relevance of Incoterms 2020 depends on the contract terms used. For example, GAFTA, FOSFA and sugar (SAL and RSA) contracts do not incorporate Incoterms. Any parties trading only on those contract terms without amending them to incorporate Incoterms will obviously be unaffected by the changes in Incoterms 2020. Standard petroleum product contracts refer to Incoterms, as do many ethanol, coal and metals contracts. Parties dealing with such contracts will need to:
• Check their standard contract forms
• Consider the changes introduced by Incoterms 2020 and whether they wish their contracts to incorporate Incoterms 2020 or an earlier version of Incoterms (or none)
• Make any necessary consequential changes in the standard forms for new contracts (for example, changing ‘DAT’ (Delivered at Terminal) to ‘DPU’ (Delivered at Place Unloaded))
• Inform counterparties and trading/execution departments of the changes to Incoterms and any revisions to contract documentation
Main changes
1. Bills of lading with an on-board notation in FCA deliveries
2. Different levels of insurance cover between Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP)
3. Acknowledging the use by parties of their own transportation in FCA, Delivered At Place (DAP), DPU and Delivered Duty Paid (DDP) deliveries
4. The inclusion of security-related requirements within carriage obligations and costs
5. Detailed Explanatory Notes for Users
6. The arrangement of provisions relating to costs
7. Change of ‘DAT’ to ‘DPU’
The detail
The table below sets out the substantive changes in more detail:
1. Bills of lading with an on-board notation in FCA deliveries
Amendments to Incoterms 2020
In FCA deliveries, parties (or their financing banks) often require a bill of lading with on-board notation but, given that delivery on FCA terms is completed before goods are loaded onto the vessel, the seller may not always be able to obtain an on-board bill of lading from the carrier.
Under the new Incoterms, the buyer and the seller may agree that the buyer will instruct its carrier to issue an on-board bill of lading to the seller after the goods have been loaded. The seller will then be obliged to tender the bill of lading to the buyer.
The ICC emphasises that, where the above option is exercised, the seller does not take on an obligation to the buyer in respect of the terms of the contract of carriage.
2. Different levels of insurance cover in CIF and CIP
Amendments to Incoterms 2020
Incoterms 2020 provide for different minimum insurance cover for CIF and CIP deliveries.
Previously, both CIF and CIP required minimum insurance cover at the level of Clause (C) of the Institute Cargo Clauses.
In the new revision, for CIF deliveries, the default position remains the same (that is, Clause (C) of the Institute Cargo Clauses). Parties may agree higher levels of cover if they wish.
However, for CIP deliveries, the seller is now obliged to obtain insurance cover at the level of Clause (A) of the Institute Cargo Clauses (that is, “all risks”).
Minimum insurance cover for CIP deliveries has therefore been increased for the benefit of the buyer. Parties are free to agree to have lower levels of insurance cover if they wish.
3. Acknowledging transportation by own transport in FCA, DAP, DPU and DDP deliveries
Amendments to Incoterms 2020
Incoterms 2010 were drafted on the assumption that, when goods are carried from the seller to the buyer, they would be carried by a third-party carrier engaged by the seller or the buyer. That did not account for situations, particularly in FCA, DAP, DPU and DDP deliveries, where a third-party carrier was not, in fact, required or contracted because the seller or the buyer would use its own transportation.
The new rules now cater for such situations by expressly providing for the arrangement of carriage as well as referring to the making of a contract of carriage.
4. Inclusion of security-related requirements within carriage obligations and costs
Amendments to Incoterms 2020
Incoterms 2020 aims to establish stronger security-related requirements than its predecessors. Now that security-related concerns are more prevalent in trade, this revision expressly provides for security-related obligations at A4 and A7 of each rule. As mentioned above, costs for these obligations will feature under A9/B9 of each rule.
5. Explanatory Notes for Users
Amendments to Incoterms 2020
The Guidance Notes that previously featured at the start of the individual Incoterms have now been amended to ‘Explanatory Notes for Users’. The Explanatory Notes set out the fundamentals of each of the relevant Incoterms, specifically:
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When it should be used
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When risk transfers
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How costs are allocated
The Explanatory Notes aim to help users choose the most appropriate Incoterms and provide guidance for interpretation if disputes arise.
6. Arrangement of provisions relating to costs
Amendments to Incoterms 2020
Costs have been rearranged in the 2020 revision. All costs relating to the various aspects of the sale are now listed at A9/B9 under each of the Incoterms, as well as under the relevant article within the Incoterms to which they apply.
The intention behind this change is to provide users with a complete list of costs in one place, so that the seller and the buyer are more aware of the costs for which each will be responsible under particular Incoterms.
7. Change from ‘DAT’ to ‘DPU’
Amendments to Incoterms 2020
There is a change to the order of the individual Incoterms in the new revision, so that DAP now appears before DAT to reflect the fact that delivery on DAP terms occurs before delivery on DAT terms.
The term ‘DAT’ has been changed to ‘DPU’, reflecting the fact that the destination for a DAT/DPU delivery could be at any place and not just a terminal. Of course, the place of delivery, if not a terminal, must be appropriate for the unloading of the goods.
As John W.H. Denton, General Secretary of the ICC, said when Incoterms 2020 were released: “Incoterms 2020 rules make business work for everyone by facilitating trillions of dollars in global trade annually. Because they help importers and exporters around the world to understand their responsibilities and avoid costly misunderstandings, the rules form the language of international sales transactions, and help build confidence in our valuable global trading system.”
The importance of Incoterms to trade is beyond doubt, even if many contracts do not incorporate them. To avoid uncertainty and disputes, trading companies should ensure they know the new Incoterms rules and make any amendments to their contracts and general terms and conditions that are necessary. It is important to ensure that the most appropriate Incoterms are selected for each contract and that they are fully understood before they are incorporated. These points are especially important now, as the changes take root.
Source: Baltic Exchange
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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- The University of Queensland
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
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