The document discusses Incoterms and when risks transfer to the buyer in commercial transactions. It defines EXW and FOB, explaining that EXW means the seller delivers goods when they are placed at the buyer's disposal, while FOB means the seller delivers goods when they are loaded onto the vessel nominated by the buyer. It then provides a real world case study and recommendations, emphasizing the importance of using legal counsel for properly documenting transactions.

1. 9th USCAS
US Corporate Aviation Summit
When to use “FOB“ and “EXW“ in a
2020 Incoterms ® World
Vision
vonJet® Aviation Group Proprietary
February 11, 2022

2. Table of Contents
• Introduction – Terry Jaramillo
• What are “Incoterms® ”?
• What does “FOB” and “EXW” mean and other
Inter-modal and Maritime terms?
• When does Risks Transfer to the Buyer?
• Real world case study!
• Questions?? and Thank you!!
vonJet® Aviation Group Proprietary

3. Introduction – Terry Jaramillo
ATP-Licensed Pilot
That was THEN - 1969
This is NOW - 2016
vonJet® Aviation Group Proprietary

4. Introduction – Terry Jaramillo
Former Part 135 operator
vonJet® Aviation Group Proprietary
(Since 1969)
Aero Service Associates, Inc.
Beech 18 – N727D at KOPF
1st Personally-Owned Airplane at KOPF
Beech Travel Air – N950T
Crown Aviation Corporation

5. Introduction – Terry Jaramillo
Aircraft and Engine Investor
vonJet® Aviation Group Proprietary
(Since 2012)
vonJet Aviation Partners, Inc.
Piper Navajo Panther Conversion –
N8063M at KVRB
Piper Navajo Panther Conversion –
N100RT at KVRB

6. Introduction – Terry Jaramillo
Helicopter Investor & Lessor
vonJet® Aviation Group Proprietary
(Since 2022)
vonJet Aviation Partners, Inc.
Bell 206B III JetRanger – N22EA at
KSMX (Santa Maria, CA Airport)
Bell 206B III “fire-carded” JetRanger –
N22EA with a Bambi Bucket attached

7. Introduction – Terry Jaramillo
Aircraft Lessor and Former Banker & Investment Banker
vonJet® Aviation Group Proprietary
(Since 1976)

8. Introduction – Terry Jaramillo
Aviation-Related Transactions
vonJet® Aviation Group Proprietary
(Since 1999)

9. Introduction – Terry Jaramillo
Aircraft Teardown
vonJet® Aviation Group Proprietary
(Since 2003)
Jet Aero Holdings, Inc.

10. Introduction – Terry Jaramillo
Transport Category Aircraft Engine Trading and Leasing
vonJet® Aviation Group Proprietary
(Since 2003)
Jet Aero Holdings, Inc. vonJet Aviation Partners, Inc.

11. “Incoterms® 2020”
What does it mean?
What they are:
Incoterms® are identifiable as a series of three-letter trade
terms related to common contractual sales practices, these
terms serve to:
Clearly communicate the tasks, costs, and risks associated with
the transportation and delivery of goods.
Simplify sales contracts by defining respective obligations, costs,
and risks involved in the delivery of goods.
What they are NOT:
The Incoterms® rules are NOT in themselves – and are
therefore no substitute for – a contract of sale. In fact,
these rules only become part of that transaction when
they are specifically added to the contract. There are
many important matters that the parties must agree to
between themselves and the Incoterms® rules cannot
provide answers to these questions. If the parties skip
this step, problems will inevitably arise from the
resulting gaps in the agreement. These questions
include:
- What are the specifications of the goods?
- What is the time, method or currency of payment?
- What is the process for resolving disputes?
- When does the transfer of ownership take place?
- What happens if something comes up? [force majeure]
- Etc., Etc., Etc. [first, hire a qualified contract lawyer!]
Source: library.iccwbo.org

12. “Incoterms® 2020”
What does it mean?
EXW: [a Multi-model Term]
EXW – “Ex Works”
The seller delivers when it places the goods at the disposal of
the buyer at the seller's premises (or at another named place,
i.e., works, factory, warehouse, etc.). The seller is not required to
load the goods or clear them for export. The parties should
precisely specify the point within the named place of delivery, as
all costs and risks up to that point are for the seller's account.
The buyer thereafter bears all costs and risks of transport.
FOB: [a Maritime Term]
FOB – “Free on Board”
In FAS, the seller delivers the goods alongside the
vessel, while with FOB the seller delivers to the buyer
when the goods are on board the vessel nominated by
the buyer at the named port of shipment. The risk of
loss of or damage to the goods transfers from the seller
to the buyer when the goods are actually on board the
vessel, and the buyer bears all costs from that moment
onward.
This Maritime shipping term was promulgated by the ICC in 1936,
it first Incoterms, and now publishes them every 10 years.
The International Chamber of Commerce (ICC) and the
Incoterms® rules have evolved over the last 80 years to
become an invaluable set of global trading terms.

13. “Incoterms® 2020”
What does it mean?
The three modes of transport

14. “Incoterms® 2020”
What does it mean?
Format
[the chosen Incoterms rule] [named port, place or point] Incoterms 2020
Example
EXW Shanghai Incoterms 2020
Source: library.iccwbo.org

15. “Incoterms® 2020”
What does it mean?
In EXW, the delivery point is the spot where the buyer
has agreed to collect the goods. In this situation, the
seller is simply putting the goods at the disposal of the
buyer for collection; essentially telling the buyer "come
and get the goods".
EXW therefore represents the rule with minimum
obligations, risks and costs imposed on the seller. Indeed,
as far as the seller is concerned, the buyer might or might
not actually end up exporting the goods – and there is no
reason therefore why the EXW rule cannot be used for
purely domestic transactions.
EXW – "EX WORKS"
Source: library.iccwbo.org

16. “Incoterms® 2020”
What does it mean?
In The seller delivers the goods to the buyer in one or
other of two ways:
• First, when the named place is the seller’s premises, the
goods are delivered when they are loaded on the means
of transport arranged by the buyer.
• Second, when the named place is another place, the
goods are delivered when, having been loaded on the
seller’s means of transport, they reach the named other
place and are ready for unloading from that seller’s
means of transport and at the disposal of the carrier or
of another person nominated by the buyer.
FCA – "FREE CARRIER"
Source: library.iccwbo.org

17. “Incoterms® 2020”
What does it mean?
The seller delivers the goods – and transfers the risk - to
the buyer by handing them over to the carrier contracted
by the seller or by procuring the goods so delivered. The
seller delivers the goods to the carrier and contracts for
and pays the costs of carriage necessary to bring the
goods to the named place of destination.
CPT – “CARRIAGE PAID TO"
Source: library.iccwbo.org

18. “Incoterms® 2020”
What does it mean?
The seller delivers the goods to the carrier and contracts
for and pays the costs of carriage necessary to bring the
goods to the named place of destination. The seller also
contracts for insurance cover against the buyer's risk of
loss of or damage to the goods during the carriage. The
seller is required to obtain insurance for maximum cover
such as Institute Cargo Clauses (A) or similar taking into
account also the mode/s of transport.
CIP – “CARRIAGE & INSURANCE PAID TO"
Source: library.iccwbo.org

19. “Incoterms® 2020”
What does it mean?
The seller must provide the goods and the commercial
invoice in conformity with the contract of sale and any
other evidence of conformity that may be required by the
contract. Any document to be provided by the seller may
be in paper or electronic form as agreed.
The seller must deliver the goods by placing them at the
disposal of the buyer on the arriving means of transport
ready for unloading at the agreed point, if any, at the
named place of destination or by procuring the goods so
delivered. In either case the seller must deliver the goods
on the agreed date or within the agreed period.
DAP – “DELIVERED AT PLACE"
Source: library.iccwbo.org

20. “Incoterms® 2020”
What does it mean?
DPU – “DELIVERED AT PLACE UNLOADED"
The seller must provide the goods and the
commercial invoice in conformity with the contract
of sale and any other evidence of conformity that
may be required by the contract.
The seller must unload the goods from the arriving
means of transport and must then deliver them by
placing them at the disposal of the buyer at the
agreed point, if any, at the named place of
destination or by procuring the goods so delivered. In
either case the seller must deliver the goods on the
agreed date or within the agreed period.
Source: library.iccwbo.org

21. “Incoterms® 2020”
What does it mean?
DDP – “DELIVERED DUTY PAID"
The seller must deliver the goods by placing them at
the disposal of the buyer on the arriving means of
transport ready for unloading at the agreed point, if
any, at the named place of destination or by
procuring the goods so delivered with import duty
cleared. In either case the seller must deliver the
goods on the agreed date or within the agreed
period.
Source: library.iccwbo.org

22. “Incoterms® 2020”
What does it mean?
FAS – “FREE ALONGSIDE SHIP"
The seller delivers the goods to the buyer when the
goods are placed alongside the ship (e.g., on a quay or
a barge) nominated by the buyer at the named port
of shipment.
Source: library.iccwbo.org
The Maritime Rules

23. “Incoterms® 2020”
What does it mean?
FOB – “FREE ON BOARD"
The seller must deliver the goods either by placing
them on board the vessel nominated by the buyer at
the loading point, if any, indicated by the buyer at the
named port of shipment or by procuring the goods so
delivered.
Source: library.iccwbo.org
The Maritime Rules
Ah, good old
FOB

24. “Incoterms® 2020”
What does it mean?
CFR – “COST AND FREIGHT"
The seller must deliver the goods either by placing
them on board the vessel or by procuring the goods
so delivered. In either case, the seller must deliver the
goods on the agreed date or within the agreed period
and in the manner customary at the port.
Source: library.iccwbo.org
The Maritime Rules

25. “Incoterms® 2020”
What does it mean?
CIF – “COST INSURANCE AND FREIGHT"
The seller must deliver the goods either by placing
them on board the vessel or by procuring the goods
so delivered. In either case, the seller must deliver the
goods on the agreed date or within the agreed period
and in the manner customary at the port.
Source: library.iccwbo.org
The Maritime Rules

26. “Incoterms® 2020”
When does Risk Transfer to the Buyer?
Source: library.iccwbo.org
Transport
Obligations,
Costs and
Risks Chart

27. “Incoterms® 2020”
When does Risk Transfer to the Buyer?

28. “Incoterms® 2020”
Real World Case Study
Facts:
Seller: Irish company dealing in transport-category engine trading and leasing.
Buyer: Certificated cargo air carrier in the United States operating B737-300F aircraft.
Goods: 2 ea. CFM56-3C1 aircraft engines intended as spares.
Negotiated Terms: EXW Kalitta Maintenance Facility in Oscoda, Michigan when deemed serviceable by Buyer’s Rep.
Buyer’s Representative: Yours truly!

29. “Incoterms® 2020”
Real World Case Study
Questions?:
Why wasn’t the transaction EXW Seller’s place of business in Ireland?
Why wasn’t the transaction DDP (Delivered Duty Paid)?
Wouldn’t that accomplish the same result?
Answer:
No! Not really!
Note: Transaction is subject to strict confidentiality with
regards to names of seller and buyer and specific terms.

30. “Incoterms® 2020”
Real World Case Study
Solution:
EXW Kalitta Maintenance Center, Oscoda, Michigan Incoterms 2020

31. “Incoterms® 2020”
Real World Case Study
Recommendation on using Incoterms 2020:
Carefully consider what you are trying to accomplish and retain the
services of appropriate legal counsel who can assist you in properly
documenting your transaction. Always money well spent.
Order the book!
2go.iccwbo.org
Download the APP!

32. Final Recommendation
Retain Professionals to Advise You at Every Stage
vonJet® Aviation Group Proprietary
Avoid inexperienced individuals and companies that are
learning on-the-job.
Remember, you get what you pay for!
vonJet Advisors, Inc. will be happy to review your
requirements, and assist you in this complex process.
E. Terry Jaramillo, CEO
vonJet® Aviation Group
+1.305.461.5822 Office
+1.305.794.6326 Mobile
+1.305.436.3731 Fax
terry@vonjet.aero
www.vonjet.aero
Follow us on : @vonJet

33. Thank You!!
Questions???
vonJet® Aviation Group Proprietary
➢ If I have any time remaining, I will be happy to entertain any questions.
➢ I do not, however, want to encroach on the other presenter’s time, so I will be available later, if required.
➢ I want to thank Panagiotis “Taki” Panagopoulos from AeroPodium and Dean Russell McCaffery from Broward College -
Aviation Institute for allowing me to be a presenter at this conference.