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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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Friday, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
Global trader Glencore has won contracts worth around $520 million to supply 4.94 million tonnes of coal to Mexico, state-run power utility the Fed ...
Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
Australian coal will be hardest hit as China cuts foreign imports of its key energy source to tackle oversupply, and implements policies favouring ...
Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
Wednesday, 10 April 19
KOSPO INVITED BIDS FOR 160K MT OF MIN. 3700 NCV COAL FOR JUNE LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 160,000 MT of min. 3,800 Kcal/kg ~max.4,100 ...
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Showing 1421 to 1425 news of total 6871 |
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- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Parliament of New Zealand
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- PTC India Limited - India
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