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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, 08 January 19
GLOBAL TRADE GROWTH EXPECTED TO REMAIN AT HEALTHY IN 2019 - ALLIED
2019 is here and we find ourselves with new challenges for the shipping industry and the global economy as whole, with market prospects being neith ...
Monday, 07 January 19
THE NEWCASTLE BENCHMARK SPOT PRICE IS FORECAST TO DECLINE FROM AN ESTIMATED AVERAGE OF US$105 A TONNE IN 2018 TO US$74 A TONNE IN 2020 - DEPARTMENT OF INDUSTRY, AUSTRALIA
• The Newcastle benchmark spot price is forecast to decline from an estimated average of US$105 a tonne in 2018 to US$74 a tonne in 2020, prim ...
Monday, 07 January 19
INDONESIAN GOVERNMENT DECLARED COAL BENCHMARK PRICE FALLS FOR FIFTH STRAIGHT MONTH IN JANUARY 2019; LOWEST SINCE JUNE 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 07 January 19
RUSSIA'S COAL PRODUCTION UP 5.9% TO 433.4 MLN TONNES IN 2018 - TASS
Coal production in Russia in 2018 increased by 5.9% year-on-year to 433.4 mln tonnes, according to the Central Dispatching Department of Fuel Energ ...
Friday, 04 January 19
FOCUS IS ON BOOSTING COAL PRODUCTION: INDIAN COAL MINISTER
The current focus of the government is on boosting production from operational coal mines, according to Minister for Coal, Piyush Goyal.
...
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- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Australian Coal Association
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- PTC India Limited - India
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Planning Commission, India
- White Energy Company Limited
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
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