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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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Saturday, 30 March 19
KOEN INVITES BIDS FOR 450,000 TONS OF (SUB) BITUMINOUS COAL FOR H1 AND JUNE 2019
South Korea state-owned utility KOREA SOUTH-EAST POWER CO., LTD. (KOEN) issued a tender for total 450,000 MT of min. 4300, 3500 and 5600 NCV ...
Wednesday, 27 March 19
SHIPPING MARKET INSIGHT - INTERMODAL
Contrary to the December 2018 forecasts but in line with the expectations of the dry bulk market, the first quarter of the year closed negatively. ...
Saturday, 23 March 19
IT WAS A POSITIVE WEEK FOR THE HANDY SIZE MARKET - BALTIC BRIEFING
Capesize
The big ships endured heavy losses last week extinguishing any hopes from the recent minor rally. Negative sentiment gained pace throu ...
Friday, 22 March 19
CHINA MARKET: COAL OUT IN THE COLD - BUSINESS RECORDER
Though China maintains there is no ban, China-bound Australian coal shipments are looking for a new home. For the past few months, coal cargoes are ...
Thursday, 21 March 19
PRICE PLUNGE AS CHINESE LEAVE THERMAL COAL OUT IN THE COLD - AUSTRALIAN FINANCIAL REVIEW
Thermal coal exporter New Hope Corporation says China’s shipment squeeze on Australia is putting downward pressure on prices in all markets i ...
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Showing 1441 to 1445 news of total 6871 |
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- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- The University of Queensland
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Planning Commission, India
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
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