FTC finalizes ‘Made in the USA’ rule that includes possibility of fines

According to FTC, the new rule​ codifies for the first time potential fines for each violation.  FTC may now seek civil penalties of as much as $43,280 for each violation of the rule.

The Commission stated that the rule is expected to be of special benefit to smaller companies legitimately making Made in the USA claims but which do not have the resources to defend themselves against imitators fraudulently making similar claims.

“The final rule provides substantial benefits to the public by protecting businesses from losing sales to dishonest competitors and protecting purchasers seeking to purchase American-made goods,” ​said FTC Commissioner Rohit Chopra. “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.”

Policing of claims ramped up after NAFTA

The process of crafting a final rule on such claims began after the signing of the North American Free Trade Agreement (NAFTA) in 1994 that created a free trade zone between Canada, Mexico and the United States. Until now the enforcement of such claims has been done without the assessment of penalties.

According to the final rule, it is a deceptive act to “[L]abel any product as Made in the United States unless the 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.”

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