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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, 11 September 19
THE INDONESIAN COAL PRICE REFERENCE FELL HEAVILY IN SEPTEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 11 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
We are going through one of the rare instances where we see optimism building in the dry bulk industry and, as the momentum is still going, the bel ...
Monday, 09 September 19
INDIAN COMPANIES READY TO INVEST IN DEVELOPMENT OF NEW COAL DEPOSITS IN RUSSIA'S YAKUTIA - TASS
Indian metallurgical companies, which received trial batches of coal from Kolmar mining company, are satisfied with the quality of the products and ...
Monday, 09 September 19
COLOMBIA COAL OUTPUT DOWN YEAR-ON-YEAR IN 2ND QUARTER - REUTERS
Colombia, the world’s fifth-largest exporter of coal, produced 18.9 million tonnes of the fuel in the second quarter, down 4.5% from the same ...
Monday, 09 September 19
ULTRAMAX: ASIA A 58,000-TONNER FIXED DELIVERY FUZHOU, VIA INDONESIA, REDELIVERY CHINA, AT $12,800
Capesize
0px The market reached new heights this week as the 5TC topped $38,014, a level not seen in the sector since 2013. Fridays 5TC closed ...
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Showing 1341 to 1345 news of total 6871 |
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- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Australian Coal Association
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
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