The US Federal Trade Commission (FTC) has published the final rule for “Made in USA” claim on product labels.
On July 14, 2021, Federal Trade Commission has published the final rule, 16 CFR 323 establishing rule regarding ‘Made in USA’ and other unqualified US origin claims.
The commission received more than 700 comments from stakeholders on the notice of proposed rulemaking issued in July 2020 for this rule. Most comments supported the rule and some raised concerns or recommended changes to the proposal. The commission adopted the proposed rule with minor modification and it will become effective on August 13, 2021.
Commissioner Rohit Chopra said: “The final rule provides substantial benefits to the public by protecting businesses from losing sales to dishonest competitors and protecting purchasers seeking to buy American-made goods. More broadly, this long-overdue rule is an important reminder that the Commission must do more to use the authorities explicitly authorized by Congress to protect market participants from fraud and abuse.”
The rule defines the term Made in the United States as “any unqualified representation, express or implied, that a product or service, or a specified component thereof, is of U.S. origin, including, but not limited to, a representation that such product or service is “made,” “manufactured,” “built,” “produced,” “created,” or “crafted” in the United States or in America, or any other unqualified U.S.-origin claim.”
The rule prohibits the promotion of or offer for sale in commerce any product with a ‘Made in USA’ label unless all of these three criteria are met:
- The final assembly or processing of the product occurs in the United States
- All significant processing that goes into the product occurs in the United States; and
- All or virtually all ingredients or components of the product are made and sourced in the United States
The rule covers any mail order catalog or mail order promotional material including a seal, mark, tag, or stamp labeling a product Made in the United States. The term Mail order catalog and mail order promotional material is defined in the rule as “any materials, used in the direct sale or direct offering for sale of any product or service, that are disseminated in print or by electronic means, and that solicit the purchase of such product or service by mail, telephone, electronic mail, or some other method without examining the actual product purchased.”
With this final rule the FTC will now be able to impose civil penalties of up to $43,280 for first-time violations of the rule while also seeking redress, damages, and other relief from those who make false, unqualified Made in USA claims.
The rule allows any person to apply to the commission for partial or full exemption if they can show proof that their unqualified Made in USA claim is not deceptive.
Reference
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