Truth In Advertising, Inc. (truthinadvertising.org) (hereinafter “TruthinAdvertising” or “the Petitioner”) submitted a petition to the Federal Trade Commission (“FTC”) on August 22, 2019, requesting that the agency issue regulations that would allow for the imposition of civil penalties on first-time violators of the “Made in the USA” rules.
According to the petition, the FTC may currently impose civil penalties for unfair or deceptive acts that are either knowing violations of an FTC rule, or a knowing violation of a cease and desist order. But, because there are no formal “Made in the USA” regulations, the FTC cannot directly seek penalties for violations of those rules. Rather, the FTC must first issue a cease and desist order, and then proceed to penalties if that order is violated. In essence, that means that the FTC can only impose penalties for a second violation. The Petitioner asserts that this approach has not proven effective, and encourages companies to violate the Made in the USA rules thereby stealing sales from honest competitors without fear of a penalty when an FTC enforcement action is commenced. By establishing “Made in the USA” regulations, the FTC would be able to impose penalties against first-time violators, and deter other companies from making deceptive and false claims from the outset.
By way of background, the FTC’s “Made in the USA” rules prohibit companies from making “Made in the USA” claims for goods sold or advertised in the United States unless they are “all or virtually all” made in the United States. That means that the goods can contain absolutely no non-US-origin content or only negligible amounts of non-US-origin content.
The FTC will respond to the petition within 90 days, and will recommend to the FTC commissioners that the be granted or denied based on whether the rule is in within FTC’s jurisdiction, whether the request is enforceable, and whether the granting of the request would have a beneficial impact.
If you have any questions relating to rules of origin, country of origin marking requirements, and the FTC’s “Made in the USA” rules, please contact Melissa Proctor (email@example.com) or Peggy Chaplin Louie (firstname.lastname@example.org) at Miller Proctor Law PLLC (https://millerproctorlaw.com ).