‘Made in USA’ Claim and Penalties for Violation Defined

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

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

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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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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

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further information contact:


Technical Manager – Hardlines
Tel: +1 905 364 3757
Email: crs.media@sgs.com




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