U.S. – FTC Publishes 16 CFR 323 ‘Made in USA’ Labeling

Vol. 1259 | 16 Jul 2021

On July 14, 2021, the U.S. Federal Trade Commission (FTC) published the final rule for ‘Made in USA’ Labeling, 16 CFR 323. The FTC adopted the rule proposed last year with limited modifications. The final rule is effective August 13, 2021.

The FTC is tasked with protecting consumers from deceptive acts and practices under FTC Act. Section 5(a) of the FTC Act authorizes the FTC is to ensure that a ‘Made in USA’ claim, like any other claim, be truthful, non-deceptive and substantiated. The ‘Made in USA’ claims fall into two broad categories – those that meet the ‘all or virtually all’ standard and those that are ‘qualifying’ claims. The enforcement action by the FTC for ‘Made in USA’ claims has been based on the Enforcement Policy Statement on U.S. Origin Claims, published by the FTC in 1997. However, last year the FTC proposed rule for the ‘Made in USA’ claim. The rule was intended to strengthen enforcement while making it easier for businesses to understand the requirements of ‘Made in USA’ labeling.

Based on the final rule, the FTC will allow for an unqualified ‘Made in USA’ claim, if:

• final assembly or processing of the product occurs in the United States,
• all significant processing that goes into the product occurs in the United States, and
• all or virtually all ingredients or components of the product are made and sourced in the United States

The Rule authorizes the FTC to seek civil penalties consistent with 15 U.S.C. § 57a, which are currently set at $43,280 per violation.

The final rule can be viewed at: https://www.govinfo.gov/content/pkg/FR-2021-07-14/pdf/2021-14610.pdf

For questions, please contact Dr. Pratik Ichhaporia (pratik.ichhaporia@intertek.com, +1-847-212-8273).