Month: November 2019

For those who export and import commodities to and from a number of countries or even interstate or interprovincial boundaries, INCOTERMS (International Commercial Terms) are used on a daily basis and, at a minimum, it is important to have a basic knowledge of the terms and their implication. Every ten years the INCOTERMS listing is revamped and published to reflect consideration of the latest adjustments and practices from the trade. “Incoterms®” is a trademark of the International Chamber of Commerce and includes the transportation rights and responsibilities of the parties involved in a transaction.

In our Solutions Blog we have published previous articles about the INCOTERMS or that reference them: “DRC Good Arrival Guidelines and INCOTERMS” and “North American Terms vs. INCOTERMS”.

INCOTERMS help to determine how costs and risks are allocated to buyers and sellers. In our industry, they are normally included in a Bill of Lading.

It is important to know that on January 1, 2020, the new INCOTERMS 2020 will come into effect and will contain the International Chamber of Commerce (ICC) rules for use of the 11 Incoterms® trade terms.

The new INCOTERMS 2020 edition is available online and can be purchased on the following website:

https://2go.iccwbo.org/incoterms-2020-eng-config+book_version-Book/

In the mean time, INCOTERMS 2010 remain in effect and are available on the ICC website.

If you have any questions regarding how the INCOTERMS impact your transactions, contact DRC’s Help Desk at 613-234-0982.

We are approaching our analysis of the final sections of DRC Trading Standards. Section 19 includes 25 definitions, some of which have already been addressed in previous sections of DRC Trading Standards. Therefore, we will concentrate on those that have not been previously mentioned and have a bigger impact on your day to day operations.  This article will focus on the definitions of “acts of acceptance” and “account promptly”. Two follow-up articles pertaining to Section 19 will be included in the December and January Solutions Blog and will cover: “full payment promptly”, “reasonable time”, “reject without reasonable cause”, “suitable shipping condition” and “truly and correctly account”.

“Acceptance”

There are certain actions that a buyer/receiver could perform that automatically indicate that they have accepted a load and will prevent them from properly rejecting a load. These include:

• Diverting a load without prior agreement with the seller/shipper. The shipper/seller should know the destination of the product and/or any other delivery stops the carrier is making prior to delivering the load to its destination. This includes, cross docking a load.
• Unloading product from the truck except for the purpose of getting an inspection performed on the load.
• Failure to provide timely and proper notice of a rejection, provided that an act of acceptance has not taken place and properly documenting the breach of contract or damages associated with the quality or condition of the product.
• In the case of a consignment transaction, any act by the consignee which is inconsistent with the consignor’s ownership it is considered an act of acceptance only if ratified by the consignor.

“Account Promptly”

Unless specifically agreed to by the parties, submitting a true and prompt account of sales or liquidation report means:

• In connection with a consignment or joint account transactions, within 10 days after the date of final sale with respect to each shipment, or within 20 days from the date the goods are accepted at destination, whichever comes first
• Provided, that whenever a grower’s agent or shipper distributes individual lots of produce for or on behalf of others, accounting to the principal shall be made within 30 days after receipt of the shipment from the principal for sale or within 5 days after the date the agent receives payment for the goods, whichever comes first.
• Whenever a grower’s agent or shipper harvests, packs, or distributes entire crops or multiple lots therefrom, for or on behalf of others, an accounting of the initial shipment shall be rendered within 30 days after receipt of the goods for sale.
• Accountings for subsequent shipments shall be made at 10-day intervals from the date of the accounting for the initial shipment and a final accounting for the season shall be made to each principal within 30 days from the date the agent receives the last shipment for the season from that principal. Provided further, that whenever the marketing agreement between a principal and an agent includes a provision for storage of goods prior to sale, the agent shall render accountings of inventory and expenses incurred to date at 30-day intervals from the date the goods are received by the agent until sales from storage begin.

DRC’s Luc Mougeot attended the 21^st Session of the Codex Committee on Fresh Fruits and Vegetables (CCFFV) in Monterrey, Mexico as a member of the Canadian delegation. The CCFFV approved final versions of the grade standards for garlic, ware potatoes and kiwifruit. The Committee also worked on draft standards for yam, onion and shallots, berry fruit and fresh dates.

Similar to how US Grade Standards and Canadian Standards are used in transactions in North America to determine the quality of the commodity and to resolve disputes, the Codex Alimentarius is a collection of internationally adopted food standards and related texts presented in a uniform manner. These food standards and related texts aim at protecting consumers’ health, ensuring fair practices in the food trade, and resolve disputes. For additional information or to receive Codex updates, please contact Luc at 613-234-0982 or [email protected]

The Codex grade standards for fresh fruit and vegetables may be viewed here.

Welcome New Members

In September and October, DRC welcomed the following new members:

• Dom Amodeo Produce LTD. (Ontario, Canada)
• Sandher Fruit Packers LTD. (Also d/b/a Sandher Fruit Packers) (British Columbia, Canada)
• First Choice Foods INC. (British Columba, Canada)
• Visafruits S.A. (Spain)
• Koteles Farms Limited (Ontario, Canada)
• Ravine Jaunce Trading LTD. (British Columbia, Canada)
• Blue Orbits (A d/b/a of Blue Orbits Inc.) (Ontario, Canada)
• Pacific Breeze Winery LTD. (British Columbia, Canada)
• Mark Craig INC. (Prince Edward Island, Canada)
• Gordon Food Services Canada LTD. (Ontario, Canada)
• Andrade Sun Farms (Sau Paulo, Brazil)
• Tomato Town Produce Company LTD. (Ontario, Canada)
• Richardson Eugene (Quebec, Canada)
• I.B. (2013) Nuts and Dried Fruits Trading INC. (Quebec, Canada)
• Tut Distribution INC. (Quebec, Canada)
• Bandor8 INC. (Ontario, Canada)
• Fulger Transport INC. (Ontario, Canada)
• Plantaciones Del Sol SAC (Lambayeque, Peru)
• Shine Pig Technology LTD. (British Columbia, Canada)
• 2714462 Ontario LTD. (Ontario, Canada)
• Importation GLNA INC. (Quebec, Canada)
• Orange-Aide LTEE (Quebec, Canada)
• Sun Island Products INC. (Ontario, Canada)
• IMSA for Global Logistics INC. (Ontario, Canada)
• Aliments Amelya Impex INC. (Quebec, Canada)
• Les Jardines des Fees S.E.N.C. (Quebec, Canada)
• Vivid Produce INC. (Alberta, Canada)
• Distribution MFG INC. (Quebec, Canada)
• Vegisol INC. (Quebec, Canada)
• Safia Fruits (Quebec, Canada)
• 11583883 Canada LTD. (Ontario, Canada)
• Ramirez Imports LTD. (British Columbia, Canada)
• HE Empire INC. (British Columbia, Canada)
• Cyrine Mondial S.E.N.C. (Quebec, Canada)
• AM Fresh North America INC. (Ontario, Canada)
• Kwong Fung Food Processing Factory LTD. (British Columbia, Canada)
• Healthy Choice Wholesale Foods INC. (British Columbia, Canada)
• National Produce Trading Company LLC. (Pennsylvania, USA)
• Big H Foods INC. (British Columbia, Canada)
• Avo Azteca SA DE CV (Michoacan, Mexico)

Automatic Terminations

On September 23, 2019, Les Aliments ALS Inc. / ALS Foods Inc. was expelled from DRC for failure to meet their financial obligations and failure to provide requested information in violation of section 1.5 of the DRC Trading Standards and section 3.03 of the DRC By-laws. At the time of expulsion, Annie Bertrand was the only responsibly connected party to this organization.

DRC Membership: change in status

As of October 31, the following organizations no longer hold a DRC membership:

• Cavendish Produce (A Division of Cavendish Farm Corporation) (Prince Edward Island)
• Highwide International (Ontario, Canada)
• KK Bee Ltd. (Ontario, Canada)
• Fruits Ideal (Quebec, Canada)
• Sun World (California, USA)
• Sysco Quebec (Quebec, Canada)
• Philip Warkentin (Ontario, Canada)
• Fresh Pack Farms (Ontario, Canada)
• Cornies Farms Limited (Ontario, Canada)
• Knotek Bros INC. (Ontario, Canada)
• New Land Life INC. (Ontario, Canada)
• 3J Produce LTD. (Ontario, Canada)
• Lake Erie Farms INC. (Ontario, Canada)
• Groupe Ethier INC. (Quebec, Canada)

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 14 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $83 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.