FTC Rule Cracks Down on Unqualified “Made in USA” Claims
Earlier this month, the Federal Trade Commission (FTC) finalized a rule addressing products that make unqualified claims on their United States origins. Though the rule is not yet published, it will go into effect thirty days after it was finalized on July 1, 2021.
The FTC’s July rule concerns products that indicate, without qualification, that a good or part of a good was made in the United States. Products cannot use phrases that indicate that they made in the United States, such as “Made in the USA” or “American-made” unless:
- The product is subject to final assembly or processing in the United States
- All significant processing that goes into the product occurs in the United States
- All or virtually all ingredients or components are made or sourced in the United States
This rule applies to physical labels on a product or the product’s packaging that indicates the product is American-made, but also applies to any claims that appear in mail-order catalogs or mail-order promotional materials. This includes printed advertisements, as well as advertisements sent by phone, email, or other electronic means. Claims made on websites are also included.
The FTC’s new rule on unqualified United States origins claim is very similar to their former practices on unqualified “Made in the USA” claims. However, due to a desire to crack down on fraud and protect consumers, the FTC finalized the new rule to require more consequences for those who make unqualified claims about a product’s American origins. Once the new rule goes into effect, making unqualified “Made in the USA” claims will formally allow the FTC to seek monetary penalties for each violation. Under this rule, the FTC will be able to seek claims of up to $43,280 for each violation of the “Made in USA” standard.
This content is intended for informational purposes. Due to the generality of this content, the provided information may not be applicable in all situations. We encourage the reader to review the most up-date-regulations directly with the U.S. government’s sources, which can be found here.