adbc newsletter q3 2012

NEWS FOR THE AMERICAN-DANISH BUSINESS COMMUNITY

OCTOBER 2012

Words from the Ambassador p. 3

Interview with the Ambassador on new Danish Growth Prospects p. 4

News from Trade Council U.S.

Health CareVan 2.0 in Silicon Valley p. 5-6

News from the Embassy

$Billions at Stake: Accessing the U.S. Government Market p. 7-8

Market Access - Medical Technology and Parmaceutials p. 9

Re-register with the FDA p. 10

US Affiliates of Foreign Companies’ Operations p. 10

Green Capital and Green Banks p. 11

Visit from Danish Parliament p. 12-13

Creative Christmas 2012 p. 14-15

Membership Article

Primer on the Committee on Foreign Investment in the U.S. p. 16-17

Save the Date p. 18

A special thanks to our members p. 19

Oceans Apart - yet right next door p. 20

Words from the Ambassador

Interview with the Ambassador on new Danish

Growth Prospects


Health CareVan 2.0 in Silicon Valley

Membership Article

King & Spalding

News from the Embassy

Accessing the U.S. Government Market

Green Capital and Green Banks

Visit from Danish Parliament

Creative Christmas 2012

… and more

Save the Date

A special thanks to our members

http://usadk.org/

H.E. Peter Taksøe-Jensen, Danish Ambassador to the United States of America

Q3 2012 Words from the Ambassador

Summer vacation ended with the two political conventions. Along with other Ambassadors, I was

able to attend both conventions and observe the American political nomination process in action. It

was most interesting to see how the tones of the two campaigns were seemingly reflected in the con-

ventions and it was interesting to watch how the audiences interacted with the candidates. Now fall is

here and we are awaiting the result of the elections on November 6th. Obviously, the elections will

impact the business climate in the US for the next few years.

The impact of the elections will be covered in our next newsletter. Further, we will be bringing you

more issue related content relevant to Danish companies in the US and welcome articles from our

members on issues impacting your sectors and your business.

With the American-Danish Business Council we work to ensure an increase in trade and investments

between our two countries. It is, therefore, very positive that we have experienced an increase of

over 20% in Danish exports to the U.S. in the first half of 2012 compared to the first half in 2011. My

goal is to make the American-Danish Business Council an even more vibrant and influential organiza-

tion promoting Danish and American companies and products. Therefore, I also want to increase our

membership base and encourage you to bring other companies (both American and Danish) that

might be interested in our activities into the organization.

We will strengthen the sector focus discussions and network within the American-Danish Business

Council by establishing sector committees which now consist of the Maritime Committee and the De-

fense Committee. We will shortly launch sector committees within Food, Beverage and Agriculture,

and Health and Life Science. These committees can, not only provide networking opportunities and

events, but discuss issues of mutual interest and develop a one-voice approach when needed. The

committees work to enhance business opportunities and create network synergies.

Finally, I want to welcome King & Spalding as a new member and call your attention to the article:

“Primer On The Committee On Foreign Investment In The United States: Overview Of National Securi-

ty Investigations.” They are a leading law firm serving many Danish clients.

I look forward to seeing as many of you as possible at our Creative Christmas event in the beginning of

December.

// Peter Taksøe-Jensen

Q3 2012 Words from the Ambassador

Q3 2012

When it comes to Danish export to the U.S., we have seen an in-crease of well over 20 percent in

the first half of 2012 compared to the first half of 2011.

”

“

The high growth rates show that Danish solutions can go the

distance.

”

“

Interview with Ambassador Peter Taksøe-Jensen on the prospects of Danish export

growth in 2012 and 2013

Mr. Ambassador, what are the prospects of Danish growth in exports to the U.S. in 2012?

Even though the previous relatively strong growth in Danish exports has ceased from around mid-2011 and the EU is in recession, we are experiencing strong growth of Danish exports here in the U.S. Tentatively, the U.S. economy is expected to grow just around 2 percent in 2012 and between 2 and 3 percent in 2013. The prospect of course depends on the situation sur-rounding the presidential election and possible auto-matic tightening of fiscal policy, which may change the picture significantly.

When it comes to Danish export to the U.S., we have seen an increase of well over 20 percent in the first half of 2012 compared to the first half of 2011*. This exceeds previous expectations of growth and is indeed good news for Danish companies. It also has a big im-pact on the Danish economy since Danish exports to the U.S. are expected to account for 42 billion DKK in 2012, which corresponds to about 7% of total Danish exports in 2011.

The U.S. market is Denmark’s largest export market outside EU – larger than all the BRIC countries added together. The growth also underlines the potential in the U.S. market for Danish companies and should in-spire even more focus on export opportunities to the American market.

Even though the U.S. market is highly competitive and fragmented the high growth rates show that Danish solutions can go the distance.

Can you give examples of sectors driving the growth?

Many groups show progress, but the growth is driven primarily by pharmaceuticals and wind turbines. There

is no doubt that the pharmaceutical industry is a driv-ing force and companies, such as Lundbeck, Novo Nordisk and Leo Pharma in particular, add to the in-crease in Danish exports to the U.S. The export of pharmaceuticals accounted for 44% of Denmark’s ex-port to the U.S. in 2011 and the prospects for 2012 is a growth of almost 2 billion DKK. Looking forward, it is possible that this growth continues, driven by an in-crease of U.S. market potential for pharmaceuticals, if the implementation of the Affordable Care Act is real-ized. The development in the industry is fast and Bos-ton, Massachusetts in particular is an epicenter we follow closely in relation to further development of innovation and export potential for Danish companies.

How can Danish companies get a foot in the door?

Danish companies have the possibility of drawing on an extensive network across the U.S. The Trade Coun-cil in the US is, besides the Embassy in Washington D.C., represented in New York, Atlanta, Chicago and Silicon Valley. From 2013 we will also include Toronto and Ontario as part of our network, making us able to fully integrate work in North America. Danish compa-nies can benefit from the local expertise in specific sec-tors, which can give them a unique competitive ad-vantage. With the current growth prospects it is worth considering expanding to the U.S. market.

*Exports of goods, excluding energy goods, ships and aircrafts. http://um.dk/da/~/media/UM/Danish-site/Documents/Eksportraadet/Nyheder_Eksportraadet/2011/Eksportudsigten%202012_08.ashx (in Dan-ish).

For more information on Danish Exports and market opportunities in U.S. please contact:

Lina Gandløse Hansen, Counselor

Phone: +1 (202) 797-5326,

E-mail: [email protected]

Website: usa.um.dk

Interview with the Ambassador

Q3 2012

Health CareVan 2.0 Building on the successful Health CareVan of 2010, Innovation Centre Denmark in Silicon Valley sent a new delegation of Danish stakeholders within healthcare innovations on the road in California from October 7 to October 11. On board were more than 30 representatives from both public and private enti-ties within the diverse health technology space: Large companies such as KMD, Radiometer and Delta, startups such as Vendlet and New’ish, and public insti-tutions like Welfare Tech, Syddansk Sundhedsinnova-tion and Mobile Healthcare Center. The five action-packed days kicked off with the largest health IT conference in the United States - Health 2.0 in San Francisco. Following the conference, the Health CareVan visited some of the most important players within today’s cutting edge health innovations such as MedHelp, Oracle Health Sciences and NASA’s Singular-ity University, where the delegation enjoyed a work-shop on how to advance and launch technologies driv-ing the future of healthcare. Camilla Rygaard-Hjalsted, Executive Director, Innova-tion Center Denmark states:

The United States spends 17-18 percent of GDP on healthcare costs - that's almost twice as

much as Denmark. In 10 years, it is predicted that U.S. spending in this area will increase to 25 per-cent of GDP. This is a very fright-ening development - and an area where we as Danes can contrib-ute with technologies that help reverse the trends over here. Several of the Health Carevan participants have told me how the week here in California has helped significantly increase

their insights into the American market. I am excited to follow

the work and exchanges of expe-rience now kick started by the caravan the Health CareVan.

”

“

Camilla Rygaard-Hjalsted, Executive Diretcor, Innovation Center Denmark talking to

Frank Nielsen, Head of Sensor Technology, Radiometer


Q3 2012

The five-day event examined and showcased innova-tive ways to optimize the healthcare system and re-duce costs while maintaining quality by leveraging technology. Through sessions, keynotes and Q&A, there was a focus on every aspect of the patient’s health journey; from promotion, prevention and treatment to rehabilitation. Whether it is in the for-malized hospital system, clinics or even at home, health technology can help patients and stake holders to support and smooth the health journey and pro-vide better quality of life. The focus of Health CareVan 2.0 was “Quality Long Term Care and the Empowered Patient”. Fundamental issues which were addressed included how we: enable better management and data sharing between physician, hospital, pharmacy and patient; optimize the use of resources in primary care, hospi-tals and medical clinics; reduce costs related to reha-bilitation through home care; and improve diagnostic and rehab processes through technology. In addition, goals of the Health CareVan 2.0 included: Introducing Danish institutions with innovative tech-nology to US Health Insurance Companies, Healthcare providers (including hospitals and clinics), Consumers (including employer groups), and other Healthcare organizations. The approach helped participants from the public and private sectors in Denmark learn from “The Silicon Valley Way” – what is required to take a company from a passionate few to a valuable organization with many hundreds of employees and, furthermore, iden-tifying partnership opportunities – complementary technologies; expanding markets (e.g. by “piggy-backing” on existing products or services); exchanging key findings; internationalizing products and services, and so on.

Claus Ingemann, CEO of New’ish, explains the out-come of the Health CareVan: “We've gained four weeks' worth of insight in a week. The Health CareVan took us on some extraordinary site visits to a hospital and an assisted living center, which technologically speaking are ready for our prod-uct. Their entire workflow is documented, but this has been done using hard copy folders and post-it notes. They quickly realized that a product like ours, which gives personnel access to information on work pro-cesses by scanning a QR code from their smart phone or tablets, was an obvious solution. The week here in California has resulted in 15 booked meetings with potential customers and partners both here in Ameri-ca and in Denmark. This would have been impossible to achieve had we just tried to do this on our own. The Health CareVan has given us a quantum leap in understanding the U.S. market - and in developing our own product.“ During the week in California, Claus Ingemann focused on identifying possible resellers or sales partners as well as meeting hospitals ready to test New’ish’s Workflow-to-go® solution. For more information on Health CareVan 2.0 and simi-lar events, please contact: Camilla Rygaard-Hjalsted, Ph.D, Executive Diretcor, Innovation Centre Denmark Phone: +1 650 543 3181 E-mail: [email protected] Website: icdk.um.dk/en/about-us/innovationcentres/siliconvalley/


Q3 2012

$Billions at Stake: Accessing the U.S. Gov-ernment Market with one point entry

The U.S. public sector buys products and services for hundreds of billions of dollars annually. Market access to these contracts is through the General Services Ad-ministration (GSA). GSA adjudicates applications from suppliers through a complicated application process. The Obama Administration is particularly interesting for Danish Companies in that a great emphasis is placed on sustainability and a sustainable supply chain.

Therefore, the American-Danish Business Council has arranged a workshop in Washington D.C. on Novem-ber 13: "Market Access and Government Contracts". The workshop includes individual meetings between companies and sector experts from GSA. Based on participating companies, GSA experts will be invited to provide a detailed insight into the public sector pro-curement process. The aim of the workshop is to pro-vide Danish companies with sector-specific expertise in order to successfully complete the GSA process and correctly leverage inclusion in the GSA schedules.

For more information please contact:

Mary Paul Smith Jespersen, Executive Secretary of American-Danish Business Council

Phone: +1 (202) 797-5373


Website: usadk.org

http://www.gsa.gov/portal/category/100000


Q3 2012 News from Trade Council U.S.

Q3 2012

Market Access for Medical Technology & Pharmaceutical Companies –

An Organizational Priority in Times of Economic Austerity and Reform

On September 12, 2012 the Ministry of Foreign Affairs hosted a Health Care Reimbursement and Market Ac-cess Seminar in response to the dramatic changes to the global reimbursement and access requirements for medical technology and pharmaceuticals.

Key stakeholders and industry representatives dis-cussed market characteristics, global stakeholder ap-proaches to pricing, reimbursement and market ac-cess, as well as overall recommendations and ‘best-practice’ cases. As illustrated below the significance of the changes was depicted in the participation.

More rigorous technology assessments in the global market serve to inform decisions around how and when new products will be accessible. Demand for more evidence that a product is not only safe and effi-cacious, but that the value can be clearly demonstrat-ed, particularly as compared to competitive therapies, will drive future uptakes and should be at the core of corporate product development.

It is important to remember, however, that different stakeholders view value and market access each through different lens. Medical technology and phar-

maceutical developers should consider the following:

Demonstrating value is getting more sophisti-cated, with requirements for stronger, more compelling real-world evidence

All payers are tightening cost control measures, with greater constraints on physicians and man-ufacturers

Broad-based reforms across countries are pos-ing new challenges for setting pricing, market access and launch sequencing

Linking and demonstrating value to market ac-cess can be addressed proactively by industry sparking innovation based on a sustainable business case built on safety, efficacy and quan-tifiable economic value

To download the white paper click here.

For more information contact:

Joakim Steen Mikkelsen

Managing Healthcare Counselor

Embassy of Denmark, Washington D.C.

Phone: +1 (202) 215 4659



http://usa.um.dk/en/~/media/USA/Market%20Access%20for%20Medical%20Technology%20%20Pharmaceutical%20Companies%20%20An%20Organizational%20Priority%20in%20Times%20of%20Economic%20Austerity%20and%20Reform.pdf

Q3 2012

Foreign Food Manufacturing Facilities are required to re-register with the FDA

The US Food and Drug Administration (FDA) has been implementing the new Food Safety and Moderniza-tion Act (FSMA) over the last year. One key provision of the FSMA is the requirement for foreign food man-ufacturing facilities to renew their registration during the period October 1 to December 31, 2012. “FDA officials tell me they are still working on a website and instructions to facilitate this re-registration process,” said Bill Earle, President of the National Association of Beverage Importers (NABI). “We have been in conver-sation with FDA over their plans to make this a trans-parent process. It seems the technology that would facilitate compliance by the industry is complex since it involves integration with a huge base of suppliers in every country exporting food to the United States.”

The FDA has published this FAQ concerning the re-registration requirement:

There is the possibility that there will be a delay in FDA’s launch of a website to accommodate the re-registration process. However, the requirement to register or re-register by December 31, 2012 will likely stand. If a foreign food manufacturer is not properly re-registered during the last quarter of 2012 there could be disruption in their exports to the US. Those interested in receiving email updates from FDA can visit this website to sign up:

https://public.govdelivery.com/accounts/USFDA/subscriber/new?pop=t&topic_id=USFDA_206



Phone: +1 (202) 797-5373


Website: usadk.org

US Affiliates of Foreign Companies’

Operations

Published in August 2012 by Bureau of Economic Analysis, U.S. Department of Commerce, by Thomas Anderson

The value added by U.S. affiliates of foreign compa-nies rose 9.6 percent in 2010 to $649.3 billion follow-ing 2 years of decline. It rose significantly more rapidly than the overall US economy. The industries that grew most significantly were in finance and in certain man-ufacturing sectors.

Majority-owned US affiliates employed 5.3 million workers in 2010, accounting for 18 percent of U.S. exports of goods and 27 percent of U.S. imports of goods. R&D performed by affiliates rose 2 percent in 2010 to 14%.

More detailed statistics will be posted in electronic files that can be downloaded at no charge from BEA’s Website at www.bea.gov.



Phone: +1 (202) 797-5373


Website: usadk.org

FSMA amended FDCA §415 to provide that facilities required to

register will have to re-register every 2 years, during the period beginning on October 1 and end-ing on December 31 in even num-bered years. This will first occur

in October-December 2012.

“

”


According to the report, the val-ue added by majority owned U.S.

affiliates (with Denmark as the beneficial owner) increased from 2,949 to 3,315 million dollars—an

increase of 12.4%. Currently 23,000 employees are working

for these companies.

“

”



Q3 2012

“One of the most serious impediments to unleashing

clean energy solutions in the U.S. is the barrier to

affordable financing in early stage deployment pro-

jects – the so-called valley of death. Moreover, incen-

tives, like the Production Tax Credit, are short term

and must be renewed regularly causing uncertainty in

the market. One solution to these issues is creation of

a ‘Green Bank’”, says Mary Paul Smith Jespersen.

The Coalition for Green Capital and the

Advancement of “Green Banks”

Coalition for Green Capital also believes that a green

bank is an effective way of transitioning to cleaner

energy sources. America’s first green bank in Con-

necticut – The Clean Energy Finance and Investment

Authority – passed in a bipartisan vote in the state

legislature. This is a popular response to the global

energy crisis due to its bipartisan nature.

The Coalition for Green Capital (CGC) is a non-profit

currently working to establish green banks on the

state level, such as the one in Connecticut. CGC be-

lieves it’s important to transition to a new kind of

banking because federal funding in the form of subsi-

dies and grants is unlikely to increase in the near fu-

ture. Therefore, these banks should adopt an innova-

tive financing strategy that combines existing federal

funds with private investment capital. As these pro-

jects are carried out, investors will receive long-term

rates of return. This model creates revolving loans,

which enables green banks to fund more projects

without seeking more federal funding. Unlike federal

grants, which only fund one project, green bank loans

are continually reinvested in new projects, so taxpay-

ers receive money back.

The benefits of green banks are numerous and wide-

spread. The establishment of bipartisan green banks

on the state level across the country will make pollu-

tion-free clean energy sources cost-competitive with

fossil fuels and incentivize investment in the industry.

For example, low-cost financing reduces the delivered

electricity prices of wind projects by 15-20% making

them cost-competitive with new-build conventional

coal and gas-fired power plants to meet incremental

energy demand growth. CGC is in the process of de-

veloping financial models for green banks in order to

facilitate its next projects in the states of New York,

Rhode Island and California. CGC hopes this model will

eventually be replicated on an international-scale.



Phone: +1 (202) 797-5373


Website: usadk.org

For more information about CGC, visit www.coalitionforgreencapital.com

For more information about the green bank in Con-necticut, visit www.ctcleanenergy.com or e-mail Lisa Sundeen at: [email protected]

News from Trade Council U.S. News from Trade Council U.S.

Q3 2012

”

The Food, Agriculture and Fisheries Committee of the Danish Parliament visit

Canada and U.S.

“We’ve had a fruitful trip to the U.S. and Canada” says Chairman for The Food, Agriculture and Fisheries Committee René Christensen who joined the rest of the committee on a one-week study tour of Canada and the United States in September. From 26th to 28th September they visited Washington, D.C. In Can-ada the committee worked with fisheries policy and research and control. In Washington the focus was on research and development for green growth and American farming. During a field trip to Virginia the committee members were given the opportunity to witness and study sus-tainable dairy farms with associated compost produc-tion, a multi organic farm and recycling of fats to pro-duce biodiesel. There was also an opportunity for mutually informa-tive meetings with congressional staff, and Deputy Minister of Agriculture Kathleen Merrigan. René Christensen states:

Chairman for The Food, Agriculture and Fisheries Committee Rene Christensen was briefed on the re-form discussions in EU agricultural policy and, from American side, the briefing was on the development in the current Farm Bill discussions in Congress. For more information please contact:

Steen Steensen

Phone: +1 202 234-4300 E-mail: [email protected]

“

We've obtained an interesting insight into the various defini-tions of ecology in the United States and Denmark, including

animal welfare. Also the way and the initiatives Canada has taken

to support and monitor sustaina-ble fisheries is something we

want to bring home and work on.

The comittee members at an organic multi production facility with Director of Office of International Marketing at Virginia Department og Agriculture, Keith Long.


Q3 2012

Ambassador, Peter Taksøe-Jensen, Chairman, René Christensen and President for North America of Arla Foods, Susie Møller Hjorth with the committee members.

President for North America of Arla Foods, Susie Møller Hjorth is briefing committee members about Arla’s work in North America.


Creative Christmas 2012 The embassy is – for the seventh year running – hosting its annual Public Diplomacy event: Creative Christmas. The event draws 700+ of the most influen-tial decisions makers in Washington and the US in general and is an ideal opportunity for an unforgetta-ble evening of networking at the embassy of Denmark hosted by the ambassador in his residence. This year the event takes place on December 4th (non-defense ADBC members) and December 5th (defense ADBC members) from 7:00pm – 9:00pm The Creative Christmas concept aims to present the best Denmark has to offer within the fields of busi-ness, art, gastronomy and culture and over the past years we have been able to strengthen the Creative Christmas brand to such an extent that the event is mentioned in U.S. and Danish media. Companies wishing to sponsor Creative Christmas and join an ever growing group of partners may contact Pernille Florin Elbech at [email protected] or at 202 320 0098 to discuss the sponsorship package or a person-alized package for your company. For sponsoring com-panies this is a perfect occasion to invite your own valuable customers to the event. Artist Gugger Petter's art 'Bolsjer' (Hard Candy) will be exhibited at Creative Christmas this year. Gugger Petter, who uses pieces of newspaper to create her

works, presented Crown Princess Mary with her por-trait. Next to the portrait of Crown Princess Mary was a portrait of Barack Obama. The portrait of Barack Obama (which has been hanging at the Danish Embas-sy since the election in 2008) was sent to Copenhagen for the occasion.

The newspapers for the Obama portrait are only from the Chicago Tribune and the portrait of Crown Prin-cess Mary mostly consists of Australian newspapers. The portrait of Obama dates to the early days of the 2008 campaign when he was fighting for the nomina-tion against Hillary Clinton – seen by many as the odds on favorite to win. The Obama portrait was put in the headquarters of the Obama presidential campaign where the volunteers worked. The portrait of Crown Princess Mary will be part of Frederiksborg Castle Mu-seums’ permanent exhibition.

For more information please contact: Mary Paul Smith Jespersen, Executive Secretary of American-Danish Business Council Phone: +1 (202) 797-5373 E-mail: [email protected] Website: usadk.org Pernille Elbech Senior Advisor, Public Diplomacy and Press

Phone: +1 (202) 797-5362 E-mail: [email protected]

Q3 2012

Thank you to Arla Foods and Shelton Brothers for their valua-

ble support making us able to serve cheese and beer


Q3 2012

At last year’s Creative Christmas: Democratic Minority Whip in the House of

Representatives Steny Hoyer and Ambassador Peter Taksøe-Jensen

At last year’s Creative Christmas: Ambassador Peter Taksøe-Jensen with his spouse Ms Gitte Wallin Pedersen, Admiral, John Papp,

Commandant of the U.S. Coast Guard with his wife and Brigadier General Jørgen Jacobsen


Q3 2012

The article below from the newest member of ADBC is particularly relevant in light of the President’s decision regarding Ralls Corporation (a Chinese wind farm company) announced in a press release by the Treasu-ry Department on September 28th and the report on CBS 60 Minutes October 7th regarding Huawei. The President’s decision prohibits “the acquisition and ow-nership of four wind farm project companies by Ralls Corporation.” Huawei is the largest telecom manufac-turer in the world and is attempting to build the next generation of digital networks in the US.

- Editor Mary Paul Smith Jespersen

Primer on the Committee on Foreign In-vestment in the United States: Overview of National Security Investigations

By Christine Savage, partner in King and Spalding's

International Trade Group

Foreign direct investment in the United States fre-quently has national security and political implica-tions. U.S. law contains important provisions to en-sure that such foreign direct investment is appropri-ately scrutinized. In particular, under section 721 of title VII of the Defense Production Act of 1950 (hereinafter “Exon-Florio Amendment”), as amended by the Foreign Investment and National Security Act of 2007, the President of the United States has the authority to suspend or prohibit any covered transac-tion when, in the President’s judgment, there is credi-ble evidence to believe that the transaction threatens to impair the national security of the United States. The President delegated this investigative authority to the Committee on Foreign Investment in the United States ("CFIUS").

I. KEY TERMS

National Security

The Exon-Florio Amendment does not define the term national security. Instead, the Exon-Florio Amend-ment provides the following illustrative list of factors for the President to consider in assessing whether the transaction poses national security risks:

The potential effects of the transaction on the domes-tic production needed for projected national defense requirements.

The potential effects of the transaction on the capabil-ity and capacity of domestic industries to meet na-tional defense requirements, including the availability

of human resources, products, technology, materials, and other supplies and services.

The potential effects of a foreign person’s control of domestic industries and commercial activity on the capability and capacity of the United States to meet the requirements of national security.

The potential effects of the transaction on U.S. inter-national technological leadership in areas affecting U.S. national security.

The potential national security related effects on U.S. critical technologies.

The potential effects on the long term projection of U.S. requirements for sources of energy and other critical resources and material.

The potential national security related effects of the transaction on U.S. critical infrastructure, including [physical critical infrastructure such as] major energy assets.

The potential effects of the transaction on the sales of military goods, equipment, or technology to countries that present concerns related to terrorism; missile proliferation; chemical, biological, or nuclear weapons proliferation; or regional military threats.

The potential that the transaction presents for trans-shipment or diversion of technologies with military applications, including the relevant country’s export control system.

Whether the transaction could result in the control of a U.S. business by a foreign government or by an enti-ty controlled by or acting on behalf of a foreign gov-ernment.

The relevant foreign country’s record of adherence to nonproliferation control regimes and record of coop-erating with U.S. counterterrorism efforts.

Notably, after Dubai Ports World’s attempt to acquire terminal facilities at several U.S. ports and China Na-tional Offshore Oil Company’s attempt to acquire Un-ocal, the U.S. Congress passed the Foreign Investment and National Security Act of 2007 (“FINSA”). Among other things, FINSA amended the Defense Production Act of 1950 to make clear that CFIUS should include in its investigation of transactions the impact of the

Membership Article

Q3 2012

transaction on “critical infrastructure,” and indicated that critical infrastructure includes major energy as-sets.

Covered Transaction

Under the regulations implementing the Exon-Florio Amendment, a covered transaction generally is a transaction that results in control of a U.S. business by a foreign person. A U.S. business is any entity that engages in interstate commerce in the United States, regardless of whether the U.S. business is ultimately owned or controlled by a foreign entity or person.

Control

The term control is defined as “the power, direct or indirect, whether or not exercised, through the own-ership of a majority or a dominant minority of the to-tal outstanding voting interest in an entity, board rep-resentation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity; in partic-ular, but without limitation, to determine, direct, take, reach, or cause decisions regarding . . . im-portant matters affecting an entity.” The regulations provide several examples of “important matters affecting an entity” (31 C.F.R. §800.204 ) which indi-cate that the concept of control under the law is very broad and could include certain minority shareholder rights.

II. OVERVIEW OF CFIUS PROCESS

A CFIUS review of a covered foreign investment trans-action may be initiated by the President or any mem-ber of CFIUS at any time, even after the transaction closes. The President cannot exercise this authority, however, if CFIUS has already advised the parties in writing that it has concluded a review of the national security implications of the transaction. For this rea-son, it is common for parties in transactions that may have national security considerations to voluntarily initiate a review by providing a formal notification (called an Exon-Florio notification) to CFIUS that con-tains detailed information about the transaction, par-ties involved, goods, technology and services at issue, and plans for the acquired business. The acquirer also must provide information about its ownership struc-ture, including the ultimate beneficial owners of the company. It also must include personal information about the senior officers and board members of the company, including their full names, date and place of birth, citizenship, passport numbers, national identifi-cation numbers, and U.S. visa status. Finally, the par-

ties must provide a copy of the purchase or share-holder’s agreement. For that reason, parties generally file the CFIUS notice only after signing the purchase or shareholders’ agreement.

Once a voluntary notice or notice from another agen-cy has been received, CFIUS has 30 days to review the

transaction to decide whether to initiate a national security investigation. If, during this 30 day period, all members of CFIUS conclude that the investment does not threaten to impair the national security, the re-view is terminated. If, however, at least one member of CFIUS believes that the transaction threatens to impair the national security and the threat has not been mitigated by the parties, CFIUS will initiate a na-tional security investigation.

A national security investigation also will be initiated in cases where the foreign investor is controlled by a foreign government or that involve critical infrastruc-ture, unless certain certifications by the agency taking the lead in the CFIUS process and the Department of Treasury are made to Congress. Such certifications are infrequently given; thus, most transactions involv-ing acquisitions by foreign investors controlled by a foreign government will involve a national security investigation.

CFIUS has up to 45 days to conduct its national securi-ty investigation. At the conclusion of the investigation or the 45-day review period, whichever comes first, CFIUS may determine that the transaction does not present a threat to the national security and conclude the action. CFIUS may also recommend that the Presi-dent suspend or prohibit the transaction or otherwise refer the case to the President. In such a situation, the President must announce his decision within 15 days.

In some cases, a transaction will only be cleared if the parties agree to enter into an enforceable mitigation agreement with the United States government; such agreements generally establish certain procedures, conditions, or undertakings concerning the operation of the business that the government believes are nec-essary to mitigate the risk to the national security posed by certain aspects of the transaction.


Partner Jeffrey M. Telep

Phone: (703) 400-7280


Membership Article

http://www.kslaw.com/

Q2 2012

November 13: Workshop on Market Access and Government

Contracts

At the Embassy of Denmark, Washington DC, Tuesday 13

November from 9.00 am – 4.00 pm a workshop with experts

from the General Services Administration (GSA) will help

your company acquire inside knowledge of how to optimize

your export potential to American Government entities.

December 4: Extraordinary Annual General Meeting

This year an extraordinary annual general meeting of the

American-Danish Business Council will be held on December

4 at 2 pm at the Embassy. The general meeting will vote on

changes to the bylaws.

Find the current and proposed changes to the bylaws at

www.usadk.org

December 4-5: Creative Christmas

The event draws 700+ of the most influential decisions mak-

ers in Washington and the US in general and is an ideal op-

portunity for an unforgettable evening of networking at the

embassy of Denmark hosted by the ambassador in his resi-

dence.


Mary Paul Smith Jespersen

Executive Secretary of American-Danish Business Council

Phone: +1 (202) 797-5373, E-mail: [email protected]

Website: usadk.org

Q3 2012 Save the Date

Sponsoring Members

Corporate Members

Associate Members

Beaufort Advisors

Danish-American Chamber of Commerce in New York

Danish-American Chamber of Commerce of Northern California

Danish American Chamber of Commerce of North California

Danish-American Chamber of Commerce of Northern Carolina

Danish-American Chamber of Commerce of Southern California

Danish-American Chamber of Commerce of Southern Carolina

Danish-American Chamber of Commerce, Georgia

Danish-American Chamber of Commerce, Midwest

Public Affairs Council

Northwest Danish Foundation

COWI

Danish-American Business Forum

Danish Information Systems Professionals

AmCham Denmark

Innovation Center Denmark (Silicon Valley)

Danish-American Chamber of Commerce (Houston)

http://www.kslaw.com/

The American-Danish Business Council promotes Danish companies in the U.S., and provides networking with Ameri-

can companies. It is engaged in a range of activities aiming at obtaining an even more thriving American-Danish mar-

ket place with increased trade and investment. The Council has 91 Danish and American companies, organizations and

consuls as members.

A number of sector-specific committees are being formed, including Health & Life Science, Maritime and Food, Bever-

age & Agriculture. By using the Danish Embassy's contacts and access to American as well as to Danish Authorities, the

committees work to enhance business opportunities and to create network synergies and corporation.

To read about membership benefits, please visit our homepage, www.usadk.org, or contact Mary Paul Smith Jespersen, [email protected]

adbc newsletter q3 2012

Documents

danish ambassador

danish companies

danish exports

american companies

trade council

ambassador interview

business climate

sector committees