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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, 03 January 19
CAPESIZE: A MORE POSITIVE START OF THE NEW YEAR THAN EXPECTED FOR THE BIG SHIPS - FEARNLEYS
Capesize
A more positive start of the new year than expected for the big ships, with average gains of US$ 500/day posted on the first tra ...
Tuesday, 01 January 19
INDONESIA: COAL PRODUCTION EXPECTED TO EXCEED THIS YEAR'S TARGET - JP
Indonesian coal production reached 456 million tons up to Thursday or 94.02 percent of this year’s total target of 485 million tons, accordin ...
Monday, 31 December 18
THE INDONESIAN COAL MARKET Q1 '19 FORECAST: LOOKS DIRECTIONLESS - TRADER
The Indonesian coal market looks directionless, an International coal trader said when we asked him to give his forecast for 1Q' 2019.
...
Monday, 31 December 18
GLOBAL COAL DEMAND GREW BY 1% IN 2017; GLOBAL COAL POWER GENERATION INCREASED BY OVER 250 TWH - IEA
After two years of decline, global coal demand grew by 1% in 2017 to 7585 Mt as stronger global economic growth increased both industrial output an ...
Sunday, 30 December 18
MAJOR LNG BUYERS' UNCONTRACTED DEMAND TO QUADRUPLE BY 2030 - WOOD MACKENZIE
Wood Mackenzie’s latest research reveals that uncontracted demand by the world’s seven largest LNG buyers could quadruple to 80 million ...
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Showing 1506 to 1510 news of total 6871 |
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- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Planning Commission, India
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
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