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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, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
Wednesday, 06 March 19
KOREA SOUTHERN POWER CO INVITES BIDS FOR 980,000 MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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Showing 1451 to 1455 news of total 6871 |
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- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- The University of Queensland
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- White Energy Company Limited
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
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