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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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Monday, 24 December 18
DRY BULK MARKET: CAPESIZE MARKET ON BACKFOOT AS 2018'S END DRAWS NEAR - THE BALTIC BRIEFING
Capesize
Panic set in in the East as the holiday season approaches, with owners chasing rates lower. Rates on the key West Australia/China route ...
Friday, 21 December 18
4.2 MILLION DWT OF DRY BULK SHIPS SCRAPPED UNTIL 17 DEC, DOWN 71.6% Y/Y - BIMCO
2018 has been a slow year for dry bulk demolitions, with only 4.2 million DWT scrapped (as of 17 December), down 71.6% compared to last year. An al ...
Thursday, 20 December 18
INDONESIAN COAL PRICES DIVERGE FROM KEY BENCHMARK - FITCH RATINGS
The Newcastle 6,000kcal coal price benchmark that is widely used to determine most coal price estimates for Indonesian coal miners has increasingly ...
Wednesday, 19 December 18
CHINA'S IMPORT RESTRICTIONS ON COAL SPOILS THE PARTY FOR PANAMAXES - DREWRY
The Chinese government’s objective of suppressing coal and lignite imports in November and December 2018 is adversely impacting demand for Pa ...
Wednesday, 19 December 18
GLOBAL COAL DEMAND SET TO REMAIN STABLE THROUGH 2023, DESPITE HEADWINDS - IEA
While global coal demand looks set to rise for the second year in a row in 2018, it is forecast to remain stable over the next five years, as decli ...
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Showing 1516 to 1520 news of total 6871 |
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- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- The University of Queensland
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
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