SAFEGUARDS | Consumer ProductsNO. 080/21
US manufacturers making unqualified “Made in USA” claims need to be aware that the Federal Trade Commission (FTC) has recently stepped-up enforcement of its rule for such claims and are levying significant monetary penalties.
The FTC is charged with preventing deception and unfairness in the marketplace and the FTC Act gives it the power to bring law enforcement action against false or misleading claims that a product is of US origin. Traditionally, the Commission has required that a product advertised as “Made in USA” be all or virtually all made in the US. After a comprehensive review of “Made in USA” and other U.S. origin claims in product advertising and labeling, the Commission announced in December 1997 that it would retain the "all or virtually all" standard.
The FTC’s Enforcement Policy provides that, to substantiate a “Made in USA” claim, a product must be wholly domestic manufactured, or all or virtually all components must be made in the U.S.
Specifically, a product that is all or virtually all made in the U.S. will ordinarily be one in which all or virtually all significant parts ingredients or components, and where the final assembly or processing that go into the product are of US origin and should contain no (or negligible) foreign content.
The Commission concludes that consumers are likely to understand a US origin claim to mean that the advertised product is "all or virtually all" made in the United States.
“Produced in USA of US and China Components” claim not only describes the extent, amount, or type of a product’s domestic content or processing but also indicates that the product is not entirely of domestic origin.
The Enforcement Policy Statement applies to US origin claims that appear on products and labeling, advertising, and other promotional materials. It also applies to all other forms of marketing, including marketing through digital or electronic medias such as Internet or e-mail.
FTC has issued a notice of proposed rulemaking to amend the 16 CFR Part 323, Made in USA Labeling Rule “consistent with the statutory provisions of the FTC Act, the NPRM covers labels on products that make unqualified MUSA claims”.
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