FTC's 'Made in USA' Probes Leading to Stiff Penalties, but They Sometimes Shrink
Attorney Anthony DiResta, who co-chairs Holland & Knight's Consumer Protection Defense and Compliance Team, was quoted in a Corporate Counsel article that broke down cases of violations of the Federal Trade Commission's (FTC) Made in America rule by companies that incorrectly label their products. Mr. DiResta provided his opinion on how having a general counsel to vet marketing claims about where a product was made could save a company from government penalties.
"There is no hard-and-fast rule to prove compliance with the FTC's 'all or virtually all' standard, but the product should contain no (or negligible) foreign content," Corporate Counsel quoted from a client alert Mr. DiResta co-authored.
In general, the FTC's Made in the USA (MUSA) rule has three major parts, but there is room for ambiguity. The MUSA rule prohibits companies from making "unqualified" claims for any product, and "qualified" claims require a disclosure on how much of the product contains foreign parts. Companies must also show that all components of a product are made and sourced domestically.
“Companies have a continuing obligation to ensure that their claims are truthful and substantiated, including when temporarily changing a supply chain to outside the United States,” Mr. DiResta said.