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