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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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Thursday, 17 January 19
EIA ESTIMATES THAT U.S. COAL EXPORTS WERE 116 MMST IN 2018, 20% HIGHER THAN THE AMOUNT EXPORTED IN 2017
Coal Supply
EIA estimates that coal production declined by 20 million short tons (MMst) (3%) in 2018, despite a 19 MMst increase in U.S. coal e ...
Thursday, 17 January 19
U.S COAL OUTPUT IS EXPECTED TO FALL BY 3 PER CENT IN 2019 - EIA
EIA forecasts that U.S. coal production will total 729 million short tons (MMst) in 2019, down by 25 MMst (3%) from 2018.
Acco ...
Wednesday, 16 January 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we go through the first days of the year and just a few weeks before the Chinese New Year, the ship repair sector is witnessing a big difference ...
Monday, 14 January 19
KOREA SOUTHERN POWER INVITES BIDS FOR 320,000 MT OF MIN 3,800 NCV COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 3,800 kcal/kg NCV coal for ...
Friday, 11 January 19
SUPRAMAX: THE ASIAN ARENA HAD A MIXED START; LIMITED ACTION IN SOUTHEAST ASIA - THE BALTIC BRIEFING
Capesize
Dashed hopes summed up the first full week of the New Year. A slow start followed by a busy 24 hours of improving rates and a firming ...
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Showing 1491 to 1495 news of total 6871 |
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- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
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