In this issue:

NEWSLETTER June 2005

As these lines are written the Dollar stands at DKK 6.06 - the highest it has been in quite some time. While this may or may not influence the business decisions of our members, it will ease a little of the wallet pain for those of us who are taking that trip back to Denmark this summer.

The DACCNY is doing well; membership is up, our finances are improving and we are in the process of preparing a very active fall schedule. Much of this can be attributed to our new and very successful arrangement with the Danish Consulate General, but it is also hap-pily the result of a general rise in economic activities including trade between our two home countries, the U.S. and Denmark.

There will by and large be a lull in DACCNY activities during the summer, however, if an opportunity presents itself or a speaker comes to town who we would like our members to meet, you can rest assured that we will contact you.

During the summer, you may learn of the availability of someone who could provide an in-formative meeting with our members. If so, we would like to hear about it. You may also find time to favorably consider upgrading your membership from Individual Membership to Corporate Membership or from Corporate Membership to Sustaining Membership. We would very much like to hear about that as well.

We wish everyone in the Danish American Chamber of Commerce and those around them a safe and happy summer!

John Lipsky
Kevin J. Bannon
Christian Dahlberg

Meetings in the Chamber

Joint Nordic Chambers/ASF Meeting on the Outlook for the U.S. Economy and the U.S. Dollar Value
On Monday, May 23rd the Danish American Chamber of Commerce together with the American-Scandinavian Foundation and the other Nordic Chambers hosted a meeting at the Victor Borge Auditorium at Scandinavia House on the outlook for the U.S. economy and the dollar value. The panelists were Kevin J. Bannon, Executive Vice President and the Chief Investment Officer of the Bank of New York, John Lipsky, Chief Economist, JP Morgan Securities, Inc., and Christian Dahlberg, General Manager & President, Skandinaviska Enskilda Banken. The panelist's presentation was followed by a lively question and answer session and a following reception, where our members had the opportunity to continue the discussion. The panelists provided a cautiously optimistic view on the economy and predicted a short-term rise in the dollar, before a further decline. We thank Carlsberg and Arla Foods for their generosity in sponsoring the reception following the panel discussion.

DACC Breakfast Meeting at the ICFF 2005
Those members that were able to attend the breakfast meeting at the International Contemporary Furniture Fair (ICFF) on May 17th were treated to a presentation of a wide range of Danish contemporary furniture, lighting and accessories displayed in 20 exhibits organized by the Danish Consulate General. The Danish pavillion at the Fair also featured the Danish Design Project at MoMA, which is a traveling exhibition showcasing all of the Danish design furniture and accessories now represented at the renovated Museum of Modern Art. Many of the Danish manufacturers or their U.S. representatives were on hand to present their products. The presentations made it clear that Danish design is once again on a major upswing.

A New Consul General in New York

After almost a year in New York, the Danish American Chamber of Commerce bids farewell to Danish Ambassador, Consul General Svend Roed Nielsen and Mrs. Anne-Marie Overbye. Svend Roed Nielsen, who has had a long and distinguished career with the Danish Ministry of Foreign Affairs, has accepted an executive position in the Danish Trade Council as the Under-Secretary of International Trade Politics starting September 1st.

Svend and Anne-Marie's stay in The Big Apple was short, but much was accomplished in this short period of time, and the Danish Trade Council gains a great visionary with the talent and ability to accomplish the visions.

The new Consul General to New York will be Ambassador, Consul General Torben Gettermann, who has been employed in the Danish Ministry of Foreign Affairs since 1980. Ambassador Gettermann has served in the Home- as well as Foreign Service. He has been posted in Jeddah, Mexico, Budapest and Athens and comes to New York from Baghdad, where he has been posted for the past two years.

The Danish American Chamber of Commerce looks forward to welcoming Ambassador Gettermann and his family to New York.

Dynamic Danish Company Set to Conquer the USA

The young and dynamic company Zali has great ambitions and is ready to conquer the USA and the rest of the world. Located in Aalborg, Denmark, Zali was established 2 years ago by Catharina Engqvist, President, and the two brothers Dennis Jensen, Marketing Director, and Jesper Jensen, Designer.

Jesper Jensen is the sole designer in the company and his sleek glass and steel products have the typical Scandinavian design look. Their products quickly became popular in Denmark, but the three partners had bigger plans and set their eyes on the U.S. market.

Zali had their American debut last year at the International Contemporary Furniture Fair (ICFF), New York, in the Danish pavilion and received an overwhelming response. This was followed up with participation in the Danish pavilion at the New York International Gift fair, where the response was just as positive. This has resulted in a co-operation with a U.S. distributor who will handle their future business in the United States.

At the latest ICFF show, where Zali participated again for the second time, they received the same enthusiastic response as the previous year. "However, at this show it was obvious that many of the important buyers had been watching us, and now felt comfortable enough that they were ready to place orders with us" states Catharine Enqvist. "We have experienced an increase in sales of 170% since our last exhibit (2004) at the ICFF, and we plan to double our sales in 2006. It has been a great advantage for us to participate in the Danish pavilions (coordinated by the Danish Consulate General in New York), since it is easy to disappear among hundreds of other exhibitors if you participate by yourself with a small booth. But with a larger presence in a pavilion you get noticed", states Engqvist.

Zali now has distribution in 11 other countries, and plans to keep expanding. On top of ambition and hard work, love for and pride in their products coupled with a healthy sense of humor is part of the package.

Zalis products can be found at www.zali.dk.

Carlsberg USA is Back in the US With Its Own Subsidiary

Carlsberg USA was established in May of last year as a fully owned subsidiary of Carlsberg Breweries. The purpose of Carlsberg USA is for Carlsberg to be able to control the sales and marketing of the Carlsberg brands. All the products are imported from their original country and for the first time in a long time the consumers have the opportunity to taste the real Carlsberg.

A number of challenges were involved in getting the company set up. Everything was new - from hiring employees to getting the new product in from Denmark. Carlsberg was re-launched with the Passport campaign and is currently airing commercials on ESPN to help increase awareness. Carlsberg USA is now steadily increasing national distribution and the products can be purchased in a number of different chain stores and pubs.

For further questions or information on where to buy the product, please contact 203 972 7900.

Avoidable Nightmares: Top Ten Tips for Exporting Products to the U.S.

It is 4 pm on a Tuesday afternoon in Aarhus, Denmark. You just received a call from your partner in the U.S. The shipment that needed to be delivered to your client in Buffalo, New York an hour ago has been put on hold by U.S. Customs in Newark, New Jersey because your product failed a Food and Drug Administration (FDA) inspection upon arrival in the U.S. Your U.S. client calls you, threatening to withhold your payment and never work with you again if he does not receive the product immediately.

You are now frantic and worried about losing your important U.S. client, and wondering if, by some miracle, the shipment is released in the next few hours, whether it can still reach Buffalo, New York, today. You pray that the product at least has not been damaged in transit.

In my eleven years in this industry, both in Denmark and the U.S., I have come across many kinds of situations. In the process, I have learned a few tips that may improve your logistical transactions and business relationships in the U.S. and help you avoid situations like the one described above.

Top Ten Tips

1. U.S. Logistics Partner
Find a good logistics partner. It may be preferable to find a partner who is located both in Denmark and in the U.S. You will need a partner with expertise in freight forwarding, customs brokerage, warehousing and distribution. This partner will help you achieve smooth logistical transactions. Consider the service provided by your logistics partner as well as its rates. Be careful you do not choose a partner who will cut corners.

2. Research
Research the U.S. requirements for your products. This includes knowing all FDA and Alcohol Tobacco and Firearms (ATF) requirements, whether your product is state controlled and thus requires a license, and whether any fumigation rules apply. Make sure your customs broker or freight forwarder knows exactly what product you are shipping so that you can avoid delays and penalties by paying the correct U.S. tariffs/duty rates.

3. Documentation
This is a basic element of shipping, but you would be surprised how many people get it wrong. Always issue your invoices in English, show the correct tariff numbers, currency, and origin of your product (e.g., "Made in Denmark").

4. Packaging/Marking
Remember your product may be traveling across the Atlantic Ocean in a steel container. Packing your product correctly can save you many headaches and expenses in the long run, such as replacement shipments, the loss of valuable time, and disappointed and angry customers. Mark your freight with the name of the shipper, the consignee and your freight forwarder, because it may have to be moved in and out of several warehouses before it reaches its destination. Make sure each package can be identified and referenced to the packing list.

5. Transportation Insurance
Another highly recommended and inexpensive precaution is purchasing transportation insurance. This is the best way to ensure that if your product is damaged, you will be fully compensated.

6. Expectations
Understanding your customers' expectations of you and your product are essential to a healthy and productive relationship. Make sure you can meet their requirements such as transit times and product quality. Discuss with your clients whether their expectations are unrealistic.

7. Structure Logistics and Sales Terms Optimally
Optimize logistical options for your client depending on that client's individual situation by considering your choice of sales terms (incoterms). For example, some U.S. clients are not going to want the hassle of dealing with importing your product and will therefore choose a domestic product over yours. A solution could be to prepay the freight to your chosen U.S. warehouse and sell your product "EXW/New Jersey Warehouse" (if, for example, you are using a New Jersey warehouse). Another choice would be using "DDP," which will put financial responsibility and liability for damage or mistakes on the shipper all the way to the client's door. Your freight forwarder can discuss these options with you.

8. Geography
It is important to consider the correct geographical location if you are planning on setting up a warehouse/distribution service in the U.S. Analyze your sales market; The United States is a big country. If you are selling winter sports equipment, you might not want to set up your warehouse in southern Florida. Also, be realistic about the length of time needed to deliver products within the U.S. Buffalo, New York, for example, is a seven-hour drive from Newark, New Jersey, even though New York borders New Jersey.

9. Registering Your Company in the U.S.
This may help your business in the long run, by allowing smoother import procedures, financial transactions, and more efficient customer service. You may want to contact a U.S. lawyer to discuss your options.

10. Communication
This is the key to a smooth transaction. Make sure you are communicating clearly and regularly with your U.S. logistics partners and clients regarding all aspects of the shipment.

In short, planning and preparing for your shipment will help ensure that you are not faced with the nightmare scenario described above. Talk to your freight forwarder, consider your options, and be careful to issue your invoice and documentation correctly. Working with the right logistics partner will save you from stressful afternoons and allow you to grow and maintain successful relationships with your clients. For any questions, please visit www.lemanusa.com or e-mail Anders.Pedersen@lemanusa.com.

Denmark is World's Top Investment Country, Says Economist

Denmark has overtaken Canada as the most advantageous country in which to place money seen from a five year investment perspective, according to The Economist Intelligence Unit's list of the world's investment magnets. It is the first time Denmark has taken pole po-sition as the world's best place to run a business. And in the EU region, Denmark now oc-cupies the position previously held by Holland as the most business friendly country.

Worldwide, Canada was ranked No.2, followed by USA, Singapore and Hong Kong. "Den-mark scores well in all 10 categories which form part of EIU's model for the relative ability of countries to attract future investments. Denmark's labour market scores highly on flexibil-ity and has a well educated workforce", EIU writes in a press release.

Initiatives such as the pending municipal reform and reorganisation of the tax system result-ing in a larger transparency helped ensure Denmark's high scores. Denmark also has a strong banking sector and an efficient share dealing institution in Copenhagen Stock Exchange, as-sesses the EIU.

The Øresund Bridge (a road-rail fixed link between Zealand and Southern Sweden), the Great Belt Bridge and the prospect of a bridge over Femern Belt linking Zealand and Ger-many have improved the infrastructure significantly and made Denmark into a European junction from where it is easy to transport goods to the rest of the Nordic region and East-ern Europe.

EIU additionally mentions Denmark's position as a leading nation in ICT and its associated infrastructure - aspects which are collectively described as part of "The Danish Model" in the EIU report.

Elisabeth Manford, Director of Invest in Denmark, comments: "We are very happy with the EIU report which supports the arguments we use on a daily basis to convince foreign companies of the benefits of locating in Denmark. To this aim, we are using a customized benchmark tool based on international statistics to illustrate the advantageous combination of cost and quality that Denmark offers. And this report supports the outcome of these benchmark analyses - locating in Denmark gives a competitive advantage."

Danish fashion - finally - in New York

Things are looking up for Danes who have lusted after some of their homegrown fashion brands which have so far been unavailable in New York.

Some of the most popular names in Danish fashion and accessories design have begun to make their mark alongside long-time favorites such as Georg Jensen jewelry and watches from the Skagen company which has just opened a showroom in New York. A range of Julie Sandlau's organic bijouterie designs are now available at Saks 5th Avenue, and model Helena Christensen's new store, "Butik" in the West Village stocks well-known brands such as Susanne Rützou, Baum & Pferdgarten and Mads Nørgaard.

Maybe more is to come. The fashion business "Bible", the magazine Women's Wear Daily, recently ran a lengthy and generally positive piece about Danish fashion which might raise awareness. The article is just one result of a new campaign to promote Danish fashion in North America. Spearheaded by Toronto-based senior trade advisor, Jack Renteria, the aim is to help Danish brands establish themselves on this side of the Atlantic. Next in line is a conference on how to export to North America which takes place late May in Copenhagen, and Renteria plans to bring a number of purchasers from leading retailers to Copenhagen for the autumn fashion show.

If all goes well the results should begin to appear in stores in the coming months.

The Basics of Minimizing Product Liability Exposure in the U.S.

As most foreign manufacturers know, each state in the United States has its own distinctive product liability laws. As a result, manufacturers of products exported to the United States have difficulty in assessing their potential liability and in confidently determining what they should do in order to minimize their exposure. This has sometimes also made it difficult to obtain appropriate insurance.

Manufacturers and others have long hoped that the U.S. Congress would enact a general Federal product liability law that would preempt the inconsistent state laws. Unfortunately, efforts at a uniform Federal product liability law have not succeeded.

State legislatures have been more successful in reforming certain troublesome aspects of their products liability laws. Most states have enacted reform legislation over the past decade. Of course, some reforms may have some adverse consequences. For example, a limitation on joint and several liability may cause a claimant in a case to sue more defendants than the claimant would have normally sued under the prior law. Legislative limitations on joint and several liability have generally been confined to liability for non-economic damages, such as pain and suffering. Some states have also imposed limitations (caps) on recoveries for such non-economic losses.

Economic damages have also been limited, but by the courts, not the state legislatures. In 1986, in an admiralty case involving defective steam turbines installed in chartered ships, the United States Supreme Court decided that a manufacturer of a defective product purchased in a commercial transaction cannot be held strictly liable or liable for negligence for damage to the product itself that results in solely economic losses to a contractual party. The Supreme Court stated that a manufacturer could be held liable in such a situation under warranty law, but warranty liability is generally subject to the terms of the purchase contract. Although this was an admiralty case, this approach has had great influence on non-maritime cases involving commercial product transactions and now is probably the usual approach in cases of all kinds.

Punitive damages, which punish manufacturers for willful or reckless disregard of the likelihood of serious product-caused injury, have also been addressed by state legislatures. Some have limited recoveries, while others have made it more difficult to prove liability for such damages. Decisions of the U.S. Supreme Court have also reduced defendant's exposure to punitive damages. However, punitive damages are frequently sought, and successfully defending against them can be quite expensive.

While these and other recent changes in the U.S. product liability laws have generally benefited manufacturers, they have not eliminated the doctrine of strict liability. Accordingly, manufacturers (and suppliers) may be held strictly liable for furnishing products (including components) that were defective or unreasonably dangerous and that caused personal injury or property damage.

When manufacturers are alleged to be strictly liable as a result of a design defect, in most U.S. states the lawsuit will involve an examination of whether the design was a reasonable one. In other words, would a reasonable manufacturer sell the product that has certain known risks resulting from conscious design choices intended to improve the product's usefulness?

Likewise, in a products liability lawsuit an award of punitive damages will be based on the jury's review of the manufacturer/designers' conduct: was that conduct willful or wanton or even just simply reckless or indifferent to the likelihood of injury. This jury will have to consider complex design decisions, including analyses of risk versus utility, costs versus benefits, and so forth. Jurors are not especially sophisticated in these matters, and they can sometimes be led astray by engineering experts who second-guess the defendant's decisions and by lawyers who put those decisions in the worst possible light.

In any event, jurors will always be critical of design decisions that seem to put profit ahead of the safety of the product's users. Unfortunately, it is frequently difficult to draw a distinction between improper profit-oriented decisions and proper utility-oriented decisions, especially since the latter may also involve sacrificing the safety of some users in some instances.

A review of punitive damage cases reveals that the following factors will be considered by a jury in a design case:

1. The nature, extent, and/or frequency of injuries resulting from the product's design.

2. The feasibility of reducing the dangerousness of the design to an acceptable level. Considerations include (a) the cost involved; (b) the available technology and the state of the art in the industry; (c) the industry custom and practice; and (d) the utility or effectiveness of the product if it had incorporated the danger-reducing design alternative proposed by plaintiff's experts.

3. The manufacturer/designer's knowledge or notice (from prior experience, complaints, or lawsuits) of (a) a design defect in the product and/or an unreasonable danger to users created by the product; (b) the magnitude of the danger created; and (c) the availability of a feasible remedy.

4. The manufacturer/designer's actions in light of this knowledge or notice. On this point, a jury will be interested in the nature of, the duration of, and the reasons for the manufacturer/designer's failure to act appropriately to discover the danger or to reduce it by taking corrective measures.

5. The extent to which the manufacturer/designer purposely created or ignored the danger. In this connection, a jury will consider (a) whether there was any disregard or violation of the safety norms in the particular industry or of statutory and regulatory safety standards; (b) whether the design decisions overemphasized profit potential while decreasing safety; (c) whether the product's safety was affirmatively misrepresented in an effort to induce customers to buy the product; (d) whether clearly necessary research and testing was not accomplished; and (e) whether there was a failure to warn of dangers not obvious or known to the product's users.

Many of the factors that will be considered by a jury in determining the appropriateness of punitive damages in a particular case are the same factors that will be used to determine whether or not a product is actually defective. The emphasis on intangible and difficult-to-prove factors relating to product design will make it imperative that manufacturers/designers and their attorneys be prepared to deal with the intricate technical and economic aspects that must be balanced in each case. From the beginning of their preliminary design efforts on a particular product, managers and designers will have to keep these considerations in mind and keep appropriate records of how they handle these various considerations. Staff counsel, in consultation with outside counsel, will have to be heavily involved in this preparation for future product liability cases. And when those cases do arise, in addition to having a full understanding of the many subtleties of product liability law, outside trial counsel will have to be able to understand the engineering and economic factors involved. With the assistance of the managers and designers, trial counsel must be prepared to explain to the jury precisely how the challenged design was decided upon and developed. Trial counsel must also be prepared to respond to the plaintiff's arguments that one or more alternative designs should have been utilized instead.

It is probably not enough for a manufacturer's attorney to show that the product design meets industry standards. Adherence to design and construction practices of an industry may be some evidence of reasonable prudence, but this adherence is not conclusive. Neither is compliance with standards in governmental regulations. On the other hand, failure to adhere to industry standards or failure to comply with government regulatory standards will generally cause the manufacturer to be held liable.

Manufacturers may also be held liable for insufficient manuals, instructions, and warnings regarding operation, maintenance, and repair of their products. The manuals, instructions, warnings and package labels that accompany a product are generally considered to be part of a product, and, if they are insufficient, then the product may be considered defective.

The law regarding product warnings is of particular interest. Claimants' attorneys frequently find that it is easier to attack a product's warning labels than to attack the design of the product. The design usually involves various technical considerations that are very difficult to explain, even with expert witnesses. However, the adequacy of a warning label is something that juries understand relatively easily, and it is usually simpler for a claimant's attorney to make a successful argument about the warning label than about a technical design issue.

A warning will not relieve a manufacturer of liability for a product that is unreasonably dangerous. As noted above, a jury will usually determine whether a design is unreasonably dangerous by balancing the product's risk against its utility. If the product cannot reasonably be made safer without destroying its utility, the manufacturer is required to give warnings of those hazards. If the warnings are not adequate, the product is considered to be defective and unreasonably dangerous.

On certain products, the Federal government requires certain kinds of warnings, but sometimes compliance with even these specific requirements will not preclude liability for inadequate warnings. Various national organizations may also have issued standards for warning labels, etc. In addition, the courts across the U.S. have generally concluded that, in order to be adequate, a warning of a non-obvious risk must (1) describe the nature of the risk, (2) identify the severity of the risk, and (3) provide information that will allow the hazard to be avoided. Thus, manufacturers' labels must give specific warnings that tell (unless it is already obvious) how an injury could be caused by the product, the potential seriousness of such an injury, and how such an injury can be avoided. All this information has to be presented in a fashion that the users of the products will recognize and understand.

These principles are easy to describe but are difficult to put into practice for specific products. Therefore, as counsel for manufacturers, we spend considerable time analyzing court opinions dealing with warnings that were found to be either acceptable or unacceptable. We then use this analysis as the basis for our advice regarding warnings to be put on specific products of our clients. Of course, there are different considerations for each product.

It is important to note that the European requirements for product warnings are different from the United States' requirements in both theory and practice.

In some instances where hazards are discovered after the sale of certain products, it may be necessary for manufacturers to issue post-sale warnings or, in some extreme instances, to recall the product. Fortunately, such situations are unusual, but, when they occur, these situations are very dangerous for the manufacturer and must be handled thoughtfully with the legal ramifications in mind. Manufacturers who have planned in advance for such contingencies will be much better off than those who find themselves unprepared.

In order to keep track of their consumer products, manufacturers frequently have the consumers fill out and return to the manufacturers small forms showing the consumers' addresses and the places from which the products were purchased. Manufacturers may make some warranties conditional on the return of these forms, which are frequently referred to as "warranty registration cards".

In this connection, it should be noted that the U.S. Government has certain requirements that apply to warranties on most consumer products. The manufacturers and the retailers must comply with these requirements in order to limit their warranties to consumers.

In contrast to consumer transactions, in commercial transactions manufacturers may use contractual agreements to allocate between themselves and their customers (including distributors) the responsibility, risk of loss, insurance costs, etc., provided that the parties' bargaining positions are not too unequal and that the contract provisions otherwise comply with public policy. But such contractual provisions have been interpreted in many different ways by the courts of this country. Manufacturers must be extremely careful in the ways that they draft their sales contracts in order to minimize their risks under U.S. product liability law. Exculpatory agreements will probably have little or no effect on the rights of anyone who is not, directly or indirectly, a party to the contract. Moreover, manufacturers who have attempted to disclaim or limit their product warranties must remember that their promotional statements in brochures, advertisements, etc., may be considered as express warranties.

Manufacturers may find it extremely profitable to export their products to the United States. There will be unavoidable risks of being held liable for product-caused accidents, but, with careful advance planning and advice from insurance and legal experts, manufacturers can take significant steps to assess and minimize those risks.