The U.S Federal Trade Commission (FTC) recently codified product labelling rules related to unqualified "Made in USA" (MUSA) claims under 16 CFR Part 323. In summary, the rule does not impose any new requirements on businesses; instead, it codifies the FTC's longstanding enforcement policy statement regarding U.S.-origin claims. However, by codifying this guidance into a formal rule, the Commission can increase deterrence of MUSA fraud in the form of increased penalties and seek restitution for victims.
This codification follows an extended review of the FTC's longstanding program to prevent deceptive MUSA claims, including a 2019 public workshop and public comment period, followed by a July 202 Notice of Proposed Rulemaking (NPRM). The NPRM proposed to codify the established principle that unqualified U.S.-origin claims imply to consumers no more than a de minimis amount of the product is of foreign origin.
The FTC's original approach to MUSA compliance and enforcement consisted of compliance monitoring, counseling, and targeted enforcement pursuant to the FTC's general authority under 15 U.S.C. 45. Further, under the original approach sellers and marketers had to look primarily to the FTC's 1997 Enforcement Policy Statement on U.S. Origin Claims (the ''Policy Statement'') regarding actual FTC rules related to unqualified MUSA claims.
The Policy Statement set forth the general (but very strict) criteria that "all or virtually all" of the production and content...
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