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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, 11 October 19
KOREA SOUTH-EAST POWER TO IMPORT LCV COAL IN NOVEMBER
COALspot.com: South Korea’s Korea South-East Power Co., Ltd. (KOEN) has issued an international tender for 75,000 Metric Tons low calorific v ...
Thursday, 10 October 19
THERMAL COAL IMPORT LIKELY TO CROSS 200 MT IN 2019-20 - TIME OF INDIA
The country's overall thermal coal import is likely to cross the 200-million tonnes (MT) mark in the current financial year, according to Icra. ...
Wednesday, 09 October 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we have already stated in previous insights, we had expected that the recovery on rates and activity across all segments in the offshore market ...
Thursday, 03 October 19
OIL PRICE ASSUMPTIONS UNCHANGED, NBP GAS PRICE LOWERED - FITCH RATINGS PRIMARY - FITCH RATINGS
Our oil price assumptions are unchanged, despite the recent price volatility following the attacks on Saudi Arabia's oil infrastructure, Fitch ...
Thursday, 03 October 19
SHIPPING MARKET INSIGHT
Edible oil products across the board are showing healthy amount of export activity, however, rates in most cases are struggling to move accordingly ...
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Showing 1321 to 1325 news of total 6871 |
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- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
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