Just in time for July 4th, the federal government has made it a little easier to be a Patriot when shopping.
The Federal Trade Commission has released a new ruling to crack down on traders who falsely claim their products are made in the United States. According to the new guidelines, traders must be able to prove that products bearing such labels are “all or virtually all” made in the United States.
According to the FTC, products cannot be labeled unless all of the following apply:
- Final assembly or processing of the product takes place in the United States
- All major product transformations take place in the United States
- All or substantially all of the ingredients or components of the product are made and originate in the United States.
The FTC says the rule, known as the Made in USA labeling rule, will particularly benefit small businesses that rely on the “Made in USA” label but lack the resources to defend themselves against imitators. . For the first time, the FTC will have the power to seek civil penalties of up to $ 43,280 per rule violation.
In a press release, FTC Commissioner Rohit Chopra said:
“The Final Rule provides substantial benefits to the public by protecting businesses from lost sales to dishonest competitors and by protecting buyers seeking to purchase products made in the United States. More broadly, this long-awaited rule is an important reminder that the committee must do more to use authorities explicitly authorized by Congress to protect market participants from fraud and abuse.
According to the FTC, following the entry into force of the North American Free Trade Agreement in 1994, Congress enacted legislation authorizing the FTC to seek sanctions and other remedies for fraud related to allegations ” Made in USA ”. However, these powers were contingent upon the issuance of a rule by the FTC.
For a long time, there was a bipartisan consensus in the FTC that such fraud should not be sanctioned. As the FTC notes, “The latest Made in USA labeling rule changes course on the long-standing approach to the commission.”
The Made in USA labeling rule will take effect 30 days after publication in the Federal Register.
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