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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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Wednesday, 11 September 19
THE INDONESIAN COAL PRICE REFERENCE FELL HEAVILY IN SEPTEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 11 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
We are going through one of the rare instances where we see optimism building in the dry bulk industry and, as the momentum is still going, the bel ...
Monday, 09 September 19
INDIAN COMPANIES READY TO INVEST IN DEVELOPMENT OF NEW COAL DEPOSITS IN RUSSIA'S YAKUTIA - TASS
Indian metallurgical companies, which received trial batches of coal from Kolmar mining company, are satisfied with the quality of the products and ...
Monday, 09 September 19
COLOMBIA COAL OUTPUT DOWN YEAR-ON-YEAR IN 2ND QUARTER - REUTERS
Colombia, the world’s fifth-largest exporter of coal, produced 18.9 million tonnes of the fuel in the second quarter, down 4.5% from the same ...
Monday, 09 September 19
ULTRAMAX: ASIA A 58,000-TONNER FIXED DELIVERY FUZHOU, VIA INDONESIA, REDELIVERY CHINA, AT $12,800
Capesize
0px The market reached new heights this week as the 5TC topped $38,014, a level not seen in the sector since 2013. Fridays 5TC closed ...
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Showing 1341 to 1345 news of total 6871 |
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- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Australian Coal Association
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- SMC Global Power, Philippines
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
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