‘Made in USA’ Claim and Penalties for Violation Defined

Top Quote A look at the US FTC’s final rule for the ‘Made in USA’ claim. End Quote
  • (1888PressRelease) August 06, 2021 - The US Federal trade Commission (FTC) published a final rule on July 14, 2021, establishing a rule regarding ‘Made in USA’ claims and the penalties that can be applied to those that violate the rule.

    Final rule 16CRF 323 was issued following a consultation in 2020 in which the FTC received 700+ comments. Commenting, 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.”

    ‘Made in USA’ is defined as:
    “Any unqualified representation, express or implied, that a product or service, or a specified component thereof, is of US 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 US-origin claim.”

    Only products that conform to these three criteria can bear the label ‘Made in USA’:
    1. The final assembly or processing of the product occurs in the United States
    2. All significant processing that goes into the product occurs in the United States; and
    3. All or virtually all ingredients or components of the product are made and sourced in the United States

    The rule also applies to mail order retailers and their promotions materials.

    If an operator is found to be in violation of this rule, the FTC can impose a civil penalty of up to USD 43,280 for first-time offenders. They can also seek redress, damages and other relief. However, if a person can prove their unqualified ‘Made in USA’ claim was not deceptive, they can apply to the FTC for partial or full exemption.

    The final rule will come into effect on August 13, 2021.

    SGS Consumer Products Services
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    SGS SafeGuardS keep you up to date with the latest news and developments in the consumer goods industry. Read the full New FTC Rule, “Made in USA” Violators Will Face Monetary Penalties SafeGuardS. [www.sgs.com/en/news/2021/07/safeguards-10221-new-ftc-rule-made-in-usa-violators-will-face-monetary-penalties]

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    For further information contact:

    Dennis Lancion
    Technical Manager – Hardlines
    Tel: +1 905 364 3757
    Email: crs.media ( @ ) sgs dot com
    Website: www.sgs.com/hardlines
    LinkedIn: sgs-consumer-goods-&-retail

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