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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, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
...
Sunday, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize
Overall it was a negative week for the Capesize market, with many routes losing ground. A limited amount of time charter appeare ...
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Showing 1336 to 1340 news of total 6871 |
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- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
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