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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, 12 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
This year’s tanker S&P activity keeps edging higher compared to the same period in 2018. Year to date we have seen some 143 ships, rangin ...
Tuesday, 11 June 19
INDONESIAN COAL PRICE REFERENCE SET AT $81.48 PER TON IN JUNE, DOWN 15.66 PERCENT YEAR-ON-YEAR
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 10 June 19
CONSECUTIVE OWNERS OF CARGO: WHO HOLDS TITLE AND THE RIGHT TO SUE? - COLIN BIGGERS & PAISLEY
KNOWLEDGE TO ELEVATE
In Tritton Resources Pty Ltd v Ever Rock Navigation S.A. [2019] FCA 276, the Federal Court considered the application of ...
Monday, 10 June 19
KOSPO INVITES BIDS FOR 1,305,000 MT OF MIN 5600 KCAL/KG NCV COAL FOR SEPT 2019 TO DEC 2021
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 435,000 MT (per year) of max 5,600 kcal/kg N ...
Sunday, 09 June 19
SUPRAMAX: ASIA LOST GROUND; THE INDIAN OCEAN SAW SLOWER ACTIVITY - BALTIC BRIEFING
Capesize
The market continued in an unusually steady ascent last week. With no major news in the market, each day improved on the last, breakin ...
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Showing 1386 to 1390 news of total 6871 |
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- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Bhatia International Limited - India
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
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