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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, 20 November 19
FOREIGN DIRECT INVESTMENTS IN COMMERCIAL COAL MINING IN INDIA? - DIPESH DIPU
In August 2019, Government of India announced its approval for Foreign Direct Investment (FDI) for coal mining, processing and sale. Not that FDI i ...
Wednesday, 20 November 19
AUSTRALIA'S NEW HOPE POSTS 66% SURGE IN Q1 SALEABLE COAL OUTPUT - REUTERS
Australian coal producer New Hope Corp Ltd reported on Tuesday a 66% jump in saleable coal production in the first quarter, as output ramped up at ...
Wednesday, 20 November 19
THE IMO AND THE PRICE OF GAS OR THE IMPACT OF THE INTERNATIONAL MARITIME ORGANISATION'S SULPHUR 2020 LIMIT FOR MARINE FUEL OIL ON THE PRICE OF GAS - KING & SPALDING
The main bunker fuel for ships is High Sulphur Fuel Oil (HSFO, with sulphur up to 3.5% m/m (mass by mass)). This will all change on 1 January 2020 ...
Wednesday, 20 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
While the market expects the next OPEC meeting, there are still no clear signs indicating that the organization will keep supporting oil prices, wh ...
Monday, 18 November 19
CHINA RECORDS STABLE COAL PRODUCTION IN JAN-OCT: XINHUA
China’s raw coal output registered stable growth in the first 10 months, while its imports remained robust, official data showed.
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Showing 1281 to 1285 news of total 6871 |
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- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Planning Commission, India
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
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