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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, 17 April 19
LNG WESTERN AFRICA CONFERENCE 2019
The only LNG Focus Platform to Accelerate Investment and Cooperation in Western African Countries
LNG Western Africa Conference 2019 ...
Saturday, 13 April 19
IMO 2020 - DON'T SCRUB IT! - IVAR MYKLEBUST
KNOWLEDGE TO ELEVATE
Höegh Autoliners stands firm on its decision not to implement scrubbers but comply with the IMO 2020 regulations by ...
Saturday, 13 April 19
CAPESIZE: WEST AUSTRALIA TO CHINA IRON ORE CARGOES LIFTING FROM $4.60 PMT TO ABOVE $5.00 - BALTIC BRIEFING
Capesize
The market saw a steep ascent from the depths of last week. The Baltic Capesize Index (BCI) 5TC opened on Monday at $5,099, although b ...
Friday, 12 April 19
OIL MARKET REPORT: MIXED SIGNALS - IEA
The huge increase in oil production we saw in 2H18 has reversed following the implementation of the new Vienna Agreement and the increasing effecti ...
Friday, 12 April 19
OFFSHORE MENA CONGRESS 2019
Offshore MENA Congress 2019
Event Date : 11-12th Jun. 2019
Location : Cairo, Egypt
Offshore MENA Congress 2019 Offshor ...
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Showing 1416 to 1420 news of total 6871 |
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- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Planning Commission, India
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- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Parliament of New Zealand
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
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