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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, 15 May 19
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
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Thursday, 09 May 19
DEEP OFFSHORE SOUTHEAST ASIA CONGRESS 2019
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Hess announced a new d ...
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Showing 1401 to 1405 news of total 6871 |
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- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
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