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In 2017 a committee of IIFA members commenced a review of the IIFA 1989 Standard Trading Conditions. The revised terms, available for use from 31 January 2018, are the IIFA Standard Trading Conditions and Warehousing Conditions 2018 (the “2018 Standard Trading Conditions”).
A welcome update is the format of the 2018 Standard Trading Conditions. They are much easier in terms of their layout to read than their predecessor. Although the content of the 2018 Standard Trading Conditions is largely the same as the 1989 Standard Trading Conditions there are a few important changes and updates.
The definitions section within the 2018 Standard Trading Conditions expands on its predecessor to include a definition of “Direct Representative” for the purposes of making it clear that the IIFA member trading under the 2018 Trading Conditions, the “Company”, is acting in the name of and on behalf of the Customer and/or the owner of Goods in all and any dealing with the Revenue as defined by Article 18 Regulation (EU) No. 952/2013 and Council Regulation 2913/92 or as amended.
Further inclusions in the definition section are definitions of “Goods” and “Transport Unit.”
The lien provisions at clause 10 of the new conditions are a slight departure from the previous version. The notice period for sale of goods held under lien has been reduced from 28 days to 21 days. Similarly the notice provisions under clause 12 for the sale of goods in the event delivery of the goods or any part thereof is not taken by the Customer, Consignee or Owner has been reduced from 28 days to 21 days with a corresponding reduction in the period for which the company has stored the goods from 90 to 60 days.
There is a new clause 14 (B) which makes it clear that despite any acceptance by the Company of instructions from the Customer to collect freight, duties, charges, dues, or other expenses from the Consignee, or any other Person, subject to receipt of evidence of a proper demand by the Company, and, in the absence of evidence of payment (for whatever reason) by such Consignee or other Person, the Customer remains responsible for such freight, duties, charges, dues, or other expenses.
In the section dealing with obligations of the Customer there is a new clause 19 to respond to the mandatory provision of the verification of the gross mass of packed containers (“VGM”) pursuant to the International Convention for the Safety of Life At Sea 1974 (the “SOLAS Convention”), as amended. The requirement under SOLAS to declare a verified weight rests on the consignor/shipper. Clause 19 (B) makes it clear that, unless the Company and the Customer agree in writing to the contrary, where the Goods are carried in a container the onus is on the Customer to arrange for the VGM to be provided to the carrier, port authority or other such party as required. Part (ii) of this clause requires the Customer to indemnify the Company, and hold them harmless, from any costs expenses, charges, fines, penalties, indemnities or other losses of whatever nature arising from or in relation to any incorrect or inaccurate information provided by or on behalf of the Customer and upon which the Company may have relied when providing the VGM.
In circumstances where the Company provides the VGM, clause 19 (C) makes it clear the Customer has to pay the Company for any charges which the Company incurs or raises from the provision of the VGM including, without limitation, any administrative charges or costs of the Company or levied by any carrier, the port operator or the Vessel. The Customer similarly, in the event the Company provides the VGM, is required to indemnify and hold the Company harmless from doing so.
Clause 19 (D) obliges the Customer to provide two warranties regarding the provision of the VGM by or on behalf of the Customer. Firstly the Customer warrants that the Customer, or the party providing the VGM on behalf of the Customer, is duly authorised by the relevant authority to provide a VGM; secondly the Customer warrants that the VGM be provided in a timely manner, is accurate and in a form which meets local requirements. Clause 19 (D) also requires the Customer to indemnify the Company and hold the Company harmless from and against any costs, expenses, charges, fines, penalties, indemnities or other losses of whatever nature arising from or in relation to the VGM or any failure or delay in providing a VGM.
In addition to the warranties around VGM, clause 20 of the 2018 of the Standard Trading Condition (formerly clause 19) has been expanded so that the previous warranty of fullness and as to the description and particulars of goods extends expressly to the nature, gross weight, gross mass (including the VGM of any container packed with packages and cargo items) and to the description and particulars of any services required by or on behalf of the Customer. Under a new clause 20 (B) the Customer warrants that any Transport Unit and/or equipment supplied by the Customer in relation to the performance of any requested service is fit for purpose.
The requirement of the Customer to hold the Company harmless for certain losses has been extended with a new clause 23 (D) covering any fraudulent activity by the Customer.
Finally, the former clause 23 has been updated (the new clause 24) to provide greater clarity regarding payment of all sums due from the Customer to the Company, including the entitlement to automatically revoke any agreed credit period and to apply interest to any sums due pursuant to the European Communities (Late Payment in Commercial Transactions) Regulations 2012, as amended.
It is anticipated IIFA members will start to adopt the 2018 Standard Trading Condition from February 2018 onwards.
