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