Back to News
17-02-2020

‘Incoterms’ 2020: in January the new terms for the international sale of goods come into force

On January 1, 2020, the new version of the Incoterms (International Commercial Terms) of 2020 of the International Chamber of Commerce (ICC) in the field of international sale of goods enters into force. The new version is justified by the commitment of 10-year review of the ICC (an organization that has joined two economically important countries such as China and Australia) and not because there has been a great conflict with the current version of 2010. Unless there is a express reference in the contract of sale in relation to the applicability of a specific version of the Incoterms, the new version of 2020 will apply to contracts signed as of the aforementioned date.

Although the new version does not present great news compared to the current one of 2010, the following novelties should be highlighted:

  • The Incoterm DAT (Delivered at Terminal – Delivery in Terminal) is removed and replaced by the new Incoterm DPU (Delivered at Place Unloaded – Delivery at Unloading Place). It is rather a simple change of nomenclature rather than a change of Incoterms itself, as the obligations and functions of both terms remain basically the same. The change is justified, then, since DPU is the only Incoterm in which the merchandise is delivered unloaded at the destination, the meaning of the word “terminal” generated some confusion in some countries, especially in Latin America. Therefore, it is now clear that the merchandise can not only be unloaded at a transport terminal or infrastructure (port, airport, dock, etc.), but also at any other point in the destination country that has equipment to unload the merchandise of the means of transport, such as a factory or warehouse.
  • The Incoterm FCA (Free Carrier – Free Carrier) now allows, in case of maritime transport, that bills of lading can be issued after loading the merchandise with the mention “on board” (on board) in order to better meet the usual documentary requirements of documentary credits as a means of payment for the sale. Although this implies a certain contradiction with the very meaning of the term bill of lading, as this document is usually issued, as its name indicates, with the shipment of the goods on board the ship and not later, the novelty is expected to speed up many sales that were delayed due to documentary credit requirements.   
  • Different coverage is established in the transport insurance of the CIP Incoterms (Carriage and Insurance paid to) and CIF (Cost Insurance and Freight – Cost, Insurance and Freight). On the one hand and, for the Incoterm CIP, the seller is obliged to contract a transport insurance in favor of the buyer with a wide coverage, which corresponds to Clause “A” of the Institute Cargo Clauses of London. On the other hand, and in the case of Incoterm CIF, the seller is only obliged to take out insurance with minimal coverage, which corresponds to Clause “C” of the Institute Cargo Clauses of London. The different requirement in terms of insurance is due to the fact that CIF is commonly used for maritime transport of bulk, whose price per kilo is usually very low, so demanding maximum coverage insurance would make the policy much more expensive, which would be detrimental to the bargaining power of sellers.
  • It is explained in more detail which party, seller or buyer, is responsible for the different customs procedures and, in addition, the dispatch of goods in transit is included for the first time. For these purposes, it is understood that the responsibility is held by the person who assumes the risk of transport to the place of delivery. Therefore, in the Incoterms EXW, FCA, FAS, FOB, CPT, CFR, CIP and CIP in which the transport risk is transmitted at source, the responsibility for the dispatch in transit regime would be assumed by the buyer. On the contrary, in the Incoterms DAP, DPU and DDP in which the risk is transmitted at destination, the seller would have the responsibility in this regard. The change mentioned can be important in those international sales in which the merchandise has to pass several customs controls (especially in complex and undeveloped countries) before arriving at the customs office of the importing country in question.
  • The Incoterms are reordered and reclassified as they are for any means of transport or for maritime transport and, finally, their use is recommended in a specific order according to the projected sale in question.

State Ports will modify the Spanish port legislation

The new EU Regulation No. 352/2017 establishing a framework for the provision of port services and adopting common rules on the financial transparency of ports, which entered into force on March 24, 2019, applies ( Article 4) to all sea ports of the trans-European transport network listed in Annex II of EU Regulation No 1315/2013 on the EU guidelines for the development of the Trans-European Transport Network. Among other relevant developments, the aforementioned EU Regulation 352/2017 also configures bunkering as a port service (Article 2.a).

Even though the aforementioned European regulation is already a rule directly applicable throughout the EU and, in addition, the Royal Legislative Decree 2/2011 approving the current Consolidated Text of the Law of Ports of the State and the Merchant Marine (TRLPEMM ) is, in general, compatible with European regulation, State Ports understands that the aforementioned TRLPEMM should be reformed in the following terms:

  • Consider that all Spanish ports of general interest (those of Annex I of the TRLPEMM) are considered ports of the trans-European transport network, because, although most of them have the aforementioned consideration, there are some exceptions such as the Port of Gandía and someone else;
  • Define and regulate the fuel supply service as a port service (currently considered commercial service), which would also entail the modification of the corresponding port specifications;
  • Establish a transitional regime for the authorizations in force for the provision of the commercial fuel supply service;
  • Integrate the collection of cargo residues in the port waste reception service;
  • Introduce various adjustments in relation to the minimum requirements that are required of the providers, to the approval of the specifications, to the publication of the proposal of limitation of providers, to the public service obligations, to the establishment of maximum rates in certain cases;
  • Establish a new rate for port service availability in certain cases.

Spanish ports will pay the Corporation Tax as of January 1, 2020

The Spanish Government has pledged to eliminate, as of January 1, 2020, the tax exemption in the Corporation Tax currently enjoyed by Spanish ports for the majority of their income (port fees, concessions, etc.). However, tax deductions for investments in ports will be maintained, so that the effective taxation could finally be similar to the current one.

Such exemption motivated the European Commission (EC) to open a file to Spain (and other EU countries) for understanding that this gave Spanish ports a competitive advantage over other EU ports considered State aid within the meaning of Article 107 of the Treaty on the functioning of the EU.

After the commitment of the Spanish Government, the European Commission (EC) has announced the file of the process initiated against Spain. In addition, Spain cannot be asked to recover and return the aid already granted, as the tax exemption mentioned already existed before Spain joined the EU and, therefore, is considered as “existing aid”.

The CNMC raises a preliminary ruling on stowage

In 2014, the European Court of Justice (CJEU) established, in a judgment dated December 11 of that year, that the Spanish stowage system then in force was contrary to the principle of freedom of establishment. This forced Spain to approve several rules to comply with the aforementioned ruling of the CJEU. Specifically, the following standards were approved:

  • Royal Decree Law 8/2017 that modifies the regime of workers for the provision of port handling services (RDL 8/2017);
  • Royal Decree Law 9/2019 by which Law 14/1994 is modified by which temporary work companies are regulated (RDL 9/2019);
  • Royal Decree 257/2019 establishing the rules for the granting of special aids for the adaptation of the port stowage sector (RD 257/2019).

The RDL 8/2017 supposed the need to reform the IV Framework Agreement signed by the social agents of the stowage sector that, in fact, effectively reached an agreement on the matter, approving, in summary, a series of subrogation obligations labor.

In the opinion of the National Commission of Markets and Competition (CNMC), the aforementioned reform introduced a series of commercial obligations between operators that went beyond the scope of collective bargaining and the provisions contemplated in the aforementioned RDL 8/2017, Therefore, considering that this could entail a restriction on the right to separation and free competition, it initiated a disciplinary proceedings against the signatories of the aforementioned reform.

But before finalizing the processing of the sanctioning file, RDL 9/2019 was approved, which once again granted social agents the possibility of establishing by means of agreements a mandatory subrogation of the stevedoring companies in the personnel of the Corporation for the Management of Port Dockers ( SAGEP) with retroactive effect. This has led the CNMC to formulate a question referred for a preliminary ruling to the CJEU which, in summary, raises whether, in case of conflict, there is a supremacy of Competition Law (of the EU) over Labor Law (internal to Spain) . In view of the question referred for a preliminary ruling, the CNMC suspended the sanctioning procedure referred to until the CJEU decides on it.

Expanded access and use of transport modes for people with disabilities

Royal Decree 537/2019 amending Royal Decree 1544/2007 regulating the basic conditions of accessibility and non-discrimination for access and use of modes of transport for people with disabilities, which entered into force on On October 10, 2019, it has established that, without any additional cost to the user, access to:

  • Wheelchairs with electric motors and scooters (as support products for the mobility of people with disabilities or reduced mobility) to sea and land transportation when they do not exceed certain dimensions and whenever technically possible and in conditions of security;
  • Assistance dogs for people affected by epilepsy and diabetes on public transport in the same way that assistance dogs for people with disabilities are admitted.

The Government approves the regulatory development of the fishing-tourism activity

The Ministry of the Presidency has approved the regulatory development of the fishing-tourism activity, as a complementary activity of the fishing sector provided for in Law 33/2014, of December 26, which introduced measures of economic diversification of the sector.

In this way, Royal Decree 239/2019, of April 5, establishes the basic conditions for the development of the fishing-tourism activity carried out on board fishing vessels (from lists 3 and 4), which include The following requirements for the exercise of the activity:

  • The fishing vessel must have the previous favorable report from the Ministry of Development regarding the conditions of maritime safety, navigation, human life at sea and pollution prevention;
  • The fishing vessel must have current civil liability insurance or other equivalent financial guarantee;
  • Tourists participating in fishing-tourism activities shall be governed by the provisions applicable to personnel outside the crew and the passenger, and may not engage in fishing activity;
  • The vessel shall have secure means of access for tourists, including, where appropriate, persons with disabilities, and must comply with the other regulated security measures;
  • At the fiscal level, the benefits obtained on the occasion of fishing-tourism activities will be attributed to the general tax regime that proceeds by the main fishing activity to which it complements.

The control of the activity will be carried out by the Ministries of Agriculture, Fisheries and Food and Development, without prejudice to the competences that may arise from the autonomous communities.

Approved new qualifications of the nautical qualifications for the government of the pleasure boats

The nautical sector has gained weight in recent years and a reflection of this is the modernization of maritime legislation in nautical matters through Royal Decree 238/2019, of April 5, which establishes qualifications attached to nautical qualifications for the government of pleasure boats and safety measures in the use of nautical motorcycles are updated.

As the norm in its preamble cites, “there is a field of service provision whose remuneration level does not make it attractive for merchant marine professionals, without corresponding to its high qualification, as with transport-related activities of people and supplies destined for pleasure boats anchored in inland maritime waters or the realization of maritime and fishing excursions in pleasure boats, following the precedents established by the national and autonomous legislation in relation to tourist fishing. These limitations show that the qualifications are not comparable to the professional qualifications in the field of merchant marine and nautical fishing ”.

The new qualifications attached to the nautical recreational titles allow, once passed certain training tests and the realization of the precise practices, the provision of certain remunerated services, as detailed below.

  • Owners of the titles of yacht captain, yacht skipper and recreational craft skipper may be entitled to:
  • Provide transportation services for supplies, always within the Spanish inland waters and territorial sea up to a maximum distance of five miles from the port, marina, marina or beach of departure, made by pleasure boats and nautical motorcycles, bound for other boats or pleasure boats;
  • Perform docking, anchoring, towing or displacement of pleasure boats within the waters corresponding to ports, marinas, marinas or beaches, as well as their transfer to another port or place provided that the navigation does not take place at a distance greater than five nautical miles from the coast;
  • Perform sea tests of pleasure boats and jet skis;
  • The government of boats destined for lifeguard on beaches.
  • The holders of the titles of yacht captain and yacht skipper may also patronize pleasure boats transporting up to six passengers for tourist excursions and recreational fishing, within the same geographical area indicated in the previous paragraph.
  • In addition, the standard also contains an update of safety measures in the use of jet skis.