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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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Tuesday, 29 January 19
CHINA HAS BEEN THE TOP DRIVER OF GLOBAL GROWTH FOR NEARLY TWO DECADES - ALLIED
China has been the top driver of global growth for nearly two decades now, pushing demand for seaborne trade and being the key influencer for deman ...
Saturday, 26 January 19
SUPRAMAX: NICKEL ORE RUNS SAW A 56K DWT VESSEL, DELIVERY PHILIPPINES, FIXED FOR A TRIP TO CHINA AT $6K - BALTIC BRIEFING
Capesize
A week of dashed hopes for owners as the optimism evident the previous week evaporated. Rates slipped on all routes and underlying thr ...
Thursday, 24 January 19
ANOTHER DISAPPOINTING WEEK FOR PANAMAX OWNERS; MARKET CONTINUES DOWN IN BOTH BASINS - FEARNLEYS
Capesize
The week has been marked by low activity and dropping rates in both basins. As usual, supply additions have increased at the beginning ...
Thursday, 24 January 19
KOREA SOUTHERN POWER INVITED BIDS FOR 960K 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 ...
Tuesday, 22 January 19
9TH GLOBAL MANUFACTURING SUPPLY CHAIN INNOVATION SUMMIT 2019
Rethinking the supply chain in manufacturing is a must at the digital era along with the industry transforming and innovating; new manufacturing is ...
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Showing 1481 to 1485 news of total 6871 |
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- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- PTC India Limited - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
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