The Federal Trade Commission reports that a U.S. company will pay $1.2 million to settle charges regarding the use of deceptive “made in USA” claims. The FTC states that this is the highest monetary judgment ever for a “made in USA” case.
According to an FTC press release, the company and its president were charged with supplying pre-labeled and pre-packaged products with deceptive, unqualified “made in USA” claims to trade customers for use in marketing those products under retailer brand names.
In response, the consent order prohibits the respondents from making unqualified U.S.-origin claims for any product unless they can show that (1) its final assembly or processing – and all significant processing – takes place in the U.S. and (2) all or virtually all ingredients or components of the product are made and sourced in the U.S.
In addition, any qualified “made in USA” claims must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, components or processing.
Finally, to claim that a product is assembled in the U.S., it must be last substantially transformed in the U.S., its principal assembly must take place in the U.S., and U.S. assembly operations must be substantial.
In addition to paying the penalty, the company will be required to provide compliance reports and notify certain third-party trade customers of the consent order.
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