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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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Monday, 04 November 19
COAL INDIA'S OCTOBER PRODUCTION MAY FALL 20% - PTI
Coal India’s production in October is likely to be 19-20 per cent lower at about 40 million tonne, as compared to 49.77 million tonne produce ...
Monday, 04 November 19
PANAMAX: WEAKER SENTIMENTS CONTINUED FROM LAST WEEK, WITH RATES FURTHER SOFTENING IN BOTH BASINS - BALTIC BRIEFING
Capesize
The Capesize market meandered slightly upwards this week before giving back much of its gains mid-week. Opening the week at $24,945, t ...
Thursday, 31 October 19
U.S. COAL-FIRED POWER PLANTS SCHEDULED TO SHUT - REUTERS
U.S. power companies expect to retire or convert from coal to gas over 13,800 megawatts (MW) of coal-fired plants in 2019 after shutting over 13,30 ...
Thursday, 31 October 19
SE ASIA MAY BECOME NET FOSSIL FUEL IMPORTER IN COMING YEARS - IEA
Southeast Asia is set to become a key driver of world energy trends over the next 20 years as its energy demand grows at twice the global average, ...
Monday, 28 October 19
ULTRAMAX: ASIA RATES REMAINED UNDER PRESSURE WITH THE NORTH LACKING FRESH ENQUIRY - BALTIC BRIEFING
Capesize
The end of the week brought about a small increase in sentiment heading into a long weekend for some regions. After sustaining a drop ...
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Showing 1296 to 1300 news of total 6871 |
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- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- White Energy Company Limited
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Planning Commission, India
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
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