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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, 18 October 19
SINGAPORE'S APEX TO LAUNCH LOW-SULFUR FUEL OIL CONTRACT AHEAD OF NEW SHIPPING RULES - REUTERS
Singapore-based Asia Pacific Exchange (APEX) will launch a low-sulfur fuel oil (LSFO) futures contract on Friday aimed at helping shipping and ener ...
Thursday, 17 October 19
INDIA READIES POLICY TO ATTRACT FOREIGN INVESTMENT IN COAL MINING - REUTERS
India expects to have formulated a policy within the next two weeks to attract foreign investment to its coal mining industry, the country’s ...
Wednesday, 16 October 19
INDIA CALLS FOR A RESET OF CLIMATE DEBATE ON COAL AS A FUEL - LIVEMINT
India on Tuesday called for a reset on climate debate on coal as a fuel, in the backdrop of India becoming one of the top renewable energy producer ...
Wednesday, 16 October 19
LESSONS LEARNT FROM CREW INJURED IN HEAVY WEATHER - UK P&I CLUB COMMENTS
KNOWLEDGE TO ELEVATE
Stuart Edmonston, Loss Prevention at UK P&I Club, discusses an incident in which crew were injured whilst on deck in ...
Wednesday, 16 October 19
SHIPPING MARKET INSIGHT - INTERMODAL
In perhaps the most interesting market conditions of the past years, the tanker and the dry bulk industry have created a positive sentiment with re ...
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Showing 1311 to 1315 news of total 6871 |
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- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Planning Commission, India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
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