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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, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
Global trader Glencore has won contracts worth around $520 million to supply 4.94 million tonnes of coal to Mexico, state-run power utility the Fed ...
Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
Australian coal will be hardest hit as China cuts foreign imports of its key energy source to tackle oversupply, and implements policies favouring ...
Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
Wednesday, 10 April 19
KOSPO INVITED BIDS FOR 160K MT OF MIN. 3700 NCV COAL FOR JUNE LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 160,000 MT of min. 3,800 Kcal/kg ~max.4,100 ...
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Showing 1421 to 1425 news of total 6871 |
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- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- MS Steel International - UAE
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- IEA Clean Coal Centre - UK
- The University of Queensland
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- PTC India Limited - India
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Mjunction Services Limited - India
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