COMPLIANCE
The Pitfalls of “Made in America” By AMY LALLY AND JACQUELYN FRADETTE
“M
ade in the USA” claims on products, also known as country-of-origin claims, have been a hotbed for litigation and regulatory enforcement for decades. In the 1990s, the Federal Trade Commission (FTC) developed a working definition of what constituted a false or misleading Made in the USA claim. But until recently, the FTC did not issue any regulations to codify a particular definition.
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That changed on July 1, 2021, when a new rule was finalized, which the FTC claims “will crack down on marketers who make false, unqualified claims that their products are Made in the USA.” While the FTC does not substantively depart from longstanding enforcement policy, by enacting the new rule as a regulation it now has more power to issue substantial penalties for what it deems to be a misuse of the term. Thus, the FTC’s new final rule could
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represent a sea change in this area and have downstream effects. Under the rule, companies are prohibited from including unqualified U.S.-origin claims on labels unless: 1. Final assembly or processing of the product occurs in the United States. 2. All significant processing for the product occurs in the United States. 3. All or virtually all of the product’s ingredients or components BACK TO CONTENTS