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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, 21 October 19
SHIPPERS CHANGE COURSE AS FUEL RULES TARGET SULPHUR EMISSIONS - WOOD MACKENZIE
The International Maritime Organization (IMO), the industry’s regulator, will require all ships to reduce the level of sulphur in their engin ...
Monday, 21 October 19
COAL TO PLAY SIGNIFICANT ROLE IN SOUTH AFRICA POWER MIX - MINISTER, REUTERS REPORTED
South Africa’s plans for additional power generation over the next decade will involve a variety of energy sources, with coal still playing a ...
Monday, 21 October 19
ULTRAMAX: IN ASIA, TRIPS FROM THE SINGAPORE AREA WERE PAYING BETWEEN $14,000 AND $16,000, DEPENDING ON THE VESSEL SIZE AND DURATION - BALTIC BRIEFING
Capesize
The market traded in a relatively stable supported manner in the Pacific this week while the Atlantic experienced weakening turbulence ...
Friday, 18 October 19
WHY CRUDE TANKER RATES JUST FELL (HALFWAY) BACK TO EARTH - FREIGHT WAVES
Panic drove crude-tanker rates up, very briefly, to mind-bogglingly high assessed levels of around $300,000 per day. Now, the fear factor has been ...
Friday, 18 October 19
SHORT TERM STRENGTH FOR OZ COMMODITIES - BALTIC BRIEFING
Volatility in the global commodity markets is not expected to unduly rattle Australia’s commodity outlook through 2020, but the 2021 picture ...
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Showing 1306 to 1310 news of total 6871 |
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- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Australian Coal Association
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
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