FTC Issues Rule to Deter Rampant Made in USA Fraud - Federal Trade Commission
The Federal Trade Commission finalized a new rule that will crack down on marketers who make false, unqualified claims that their products are Made in the USA. Under the rule, marketers making unqualified Made in USA claims on labels should be able to prove that their products are “all or virtually all” made in the United States.
Commissioner Rohit Chopra was joined by Chair Lina Khan and Commissioner Rebecca Kelly Slaughter in a statement, which noted the rule will especially benefit small businesses that rely on the Made in USA label, but lack the resources to defend themselves from imitators. The new rule codifies a broader range of remedies by the FTC, including the ability to seek redress, damages, penalties, and other relief from those who lie about a Made in USA label. It will enable the Commission for the first time to seek civil penalties of up to $43,280 per violation of the rule.
While stiff penalties are not appropriate in every instance, they send a strong signal to would-be violators that they abuse the Made in USA label at their peril.
“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 Commissioner 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.”
In 1994, after the North American Free Trade Agreement took effect, Congress enacted legislation authorizing the FTC to seek penalties and other relief for Made in USA fraud, but only after the Commission issued a rule. However, there had long been a bipartisan consensus at the FTC that Made in USA fraud should not be penalized. The final Made in USA Labeling Rule changes course on the Commission’s longtime approach.
The rule does not impose any new requirements on businesses. Instead, it codifies the FTC’s longstanding enforcement policy statement regarding U.S.-origin claims. By codifying this guidance into a formal rule, the Commission can increase deterrence of Made in USA fraud and seek restitution for victims.
Over the course of the rulemaking, the FTC heard from hundreds of ranchers and shrimpers concerned about Made in the USA labels that mislead consumers. The Commission is pleased that in conjunction with this announcement, USDA Secretary Tom Vilsack has announced that the USDA will complement the FTC’s efforts with its own initiative on labeling for products such as beef, and other agricultural products regulated by the Food Safety and Inspection Service.
The Commission issued a notice of proposed rulemaking for this rule in June 2020. The Commission received more than 700 comments on the proposed rule, most of which either were supportive, or sought changes that were not legally permissible. The final rule adds a provision allowing marketers to seek exemptions if they have evidence showing their unqualified Made-in-USA claims are not deceptive. .
The Made in USA Labeling Rule, which will be published in the Federal Register, incorporates guidance set forth in the Commission’s previous Decisions and Orders and its 1997 Enforcement Policy Statement on U.S. Origin Claims.
Consistent with this guidance, the rule will prohibit marketers from including unqualified Made in USA claims on labels unless: 1) final assembly or processing of the product occurs in the United States; 2) all significant processing that goes into the product occurs in the United States; and 3) all or virtually all ingredients or components of the product are made and sourced in the United States.
The rule applies only to labeling claims. The FTC will continue to bring enforcement action against marketers that make deceptive U.S.-origin claims falling outside the rule under Section 5 of the Federal Trade Commission Act. The FTC is authorized to seek penalties for violations of the rule. It does not supersede, alter, or affect any other federal statute or regulation relating to country-of-origin labels.
The Commission vote approving publication of the final Made in USA Labeling Rule in the Federal Register was 3-2. Commissioner Christine Wilson also issued a dissenting statement on the rule, and another dissenting statement regarding the overall meeting agenda.
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Federal Register Notices:
• Quarterly Update to Annual Listing of Foreign Government Subsidies on Articles of Cheese Subject to an In-Quota Rate of Duty
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Passenger Vehicle and Light Truck Tires From the Republic of Korea, Taiwan, and Thailand: Antidumping Duty Orders and Amended Final Affirmative Antidumping Duty Determination for Thailand
• Passenger Vehicle and Light Truck Tires From the Socialist Republic of Vietnam: Countervailing Duty Order
• Certain Steel Nails From the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission of Antidumping Duty Administrative Review; 2019-2020
• Application for Production Authority: Foreign-Trade Zone (FTZ) 38-Spartanburg County, South Carolina; Application for Production Authority; Teijin Carbon Fibers, Inc.; (Polyacrylonitrile-based Carbon Fiber); Invitation for Public Comment
• Rules: Addition of Entities and Revision of Entry on the Entity List
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Electronic Devices, Including Streaming Players, Televisions, Set Top Boxes, Remote Controllers, and Components Thereof; Notice of Request for Submissions on the Public Interest
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Ripe Olives From Spain: Final Results of Countervailing Duty Administrative Review; 2017-2018; Correction
• Fresh Garlic From the People's Republic of China: Final Results and Final Rescission, in Part, of the 25th Antidumping Duty Administrative Review; 2018-2019
• Covered Merchandise Referral: Certain Steel Wheels From the People's Republic of China: Notice of Covered Merchandise Referral
• Determination of Sales at Less Than Fair Value Investigation: Utility Scale Wind Towers From India: Postponement of Final Determination of Sales at Less Than Fair Value Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Notice of Institution of Investigation; Certain Silicon Photovoltaic Cells and Modules With Nanostructures, and Products Containing the Same
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Nails From the People's Republic of China: Notice of Court Decision Not in Harmony With Final Scope Ruling and Notice of Amended Final Scope Ruling Pursuant to Court Decision
• Citric Acid and Certain Citrate Salts From Colombia: Preliminary Results of Antidumping Duty Administrative Review; 2019-2020
• Monosodium Glutamate From the Republic of Indonesia: Final Results of Antidumping Duty Administrative Review; 2018-2019
• Corrosion-Resistant Steel Products From the Republic of Korea: Amended Final Results of Antidumping Duty Administrative Review; 2018-2019
• Citric Acid and Certain Citrate Salts From Belgium: Preliminary Results of Antidumping Duty Administrative Review; 2019-2020
• Fine Denier Polyester Staple Fiber From India: Preliminary Results of Antidumping Duty Administrative Review; 2019-2020
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CPSC Sues Amazon to Force Recall of Hazardous Products Sold on Amazon.com - U.S. Consumer Product Safety Commission
WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) today filed an administrative complaint against Amazon.com, the world’s largest retailer, to force Amazon to accept responsibility for recalling potentially hazardous products sold on Amazon.com.
“Today’s vote to file an administrative complaint against Amazon was a huge step forward for this small agency,” says Acting Chairman Robert Adler. “But it’s a huge step across a vast desert—we must grapple with how to deal with these massive third-party platforms more efficiently, and how best to protect the American consumers who rely on them.”
The complaint charges that the specific products are defective and pose a risk of serious injury or death to consumers and that Amazon is legally responsible to recall them. The named products include 24,000 faulty carbon monoxide detectors that fail to alarm, numerous children’s sleepwear garments that are in violation of the flammable fabric safety standard risking burn injuries to children, and nearly 400,000 hair dryers sold without the required immersion protection devices that protect consumers against shock and electrocution.
The Commission voted 3-1 to approve the complaint, which seeks to force Amazon, as a distributor of the products, to stop selling these products, work with CPSC staff on a recall of the products and to directly notify consumers who purchased them about the recall and offer them a full refund. Although Amazon has taken certain action with respect to some of the named products, the complaint charges that those actions are insufficient.
CPSC urges consumers to visit SaferProducts.gov to check for recalls prior to purchasing products and to report any incidents or injuries to the CPSC.
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OTEXA: Announcements - Office of Textile & Apparel
[07/19/2021] – The U.S. Federal Trade Commission (FTC) has published the final rule for ‘Made in USA’ Labeling (16 CFR Part 323). The rule, effective August 13, 2021, is intended to strengthen enforcement while making it easier for businesses to understand the requirements of ‘Made in USA’ labeling.
[07/02/2021] – May 2021 Textile and Apparel Import Report
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CBP Agriculture Specialists Prevent Smuggled Animal Products from Entering United States - U.S. Customs & Border Protection
PEMBINA, N.D. — U.S. Customs and Border Protection Agriculture Specialists (CBPAS) issued 246 emergency action notifications during the second quarter of 2021. Emergency Action Notifications (EAN) alert trade entities of non-compliance with Animal and Plant Health Inspection Service (APHIS) regulations. The EAN provides options for phytosanitary actions that must be taken to prevent the entry of plant pests, prohibited plant products, or animal products capable of introducing foreign animal diseases.
During the inspection of rail containers in International Falls, Minnesota, CBPAS intercepted more than 18,500 pounds of smuggled animal products. The animal products were seized because they were not manifested and lacked the required import permits and health certificates. A few of the products seized included seeds for planting accompanied by soil, balut eggs, and hotdogs.
CBPAS in Portal, North Dakota, found Camaenidae, a land snail, within a shipment of excavator parts from China. According to APHIS, the snail is a pest to numerous crops and vegetation. The container and contents were returned to China.
CBPAS in Pembina discovered a shipment of prohibited pork products from British Columbia. The product is referred to as “Fried Isaw” and is usually found in Asian food markets. The shipment did not have the required health certificates to enter the United States.
“These agriculture seizures show the significant priority Customs and Border Protection places on our agriculture inspection program at our ports of entry,” said Acting Pembina Area Port Director Christopher Misson. “Preventing harm to domestic crops and vegetation is an important role our Agriculture Specialists provide this country.”
CBP Agriculture Specialists are the front line in the fight against the introduction of harmful insects and diseases into the U.S. They safeguard American agriculture by stopping plant pests and exotic foreign animal diseases that could harm vital agriculture resources at our nation’s borders.
During a typical day last year, CBP agriculture specialists across the nation seized 3,091 prohibited plant, meat, animal byproducts, and soil, and intercepted 250 insect pests at U.S. ports of entry. See what else CBP achieved on a typical day during 2020.
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Opioids & Pain Pills Flood International Mail Facility at O’Hare - U.S. Customs & Border Protection
CHICAGO— U.S. Customs and Border Protections (CBP) officers at the Chicago International Mail Branch (IMF) have seen a lot of prescription pills come through the mail- while some are legal, many are not. From January 1 to June 30, officers have seized 14,021 unapproved prescriptions. Of these seizures, 1,785 parcels contained Tapentadol pills, an opioid, and another 566 shipments contained Carisoprodol, a dangerous pain medication.
Tapentadol is a Schedule II narcotic, and has a potency comparable to Tramadol and morphine, and its effects mirror Oxycodone. In the last six months, officers have seized 640,582 of these pills weighing 785 pounds, a sharp increase from the 110 pounds seized in all fiscal year 2020. The Tapentadol are mostly being shipped from India, come in various dosages, and are destined for address across the U.S. These pills would have had a street value of $1.3 million. This trend shows no signs of slowing down. During the first few days of July, CBP officers intercepted a package arriving from India containing 3,100 pills.
“I am very proud of our officers,” said Lafonda Sutton-Burke, Director, Field Operations-Chicago. “The dedication and vigilance of our officers prevented these illicit prescriptions from hitting our streets and infecting our communities.”
And Tapentadol isn’t the only prescription CBP officers are seeing a lot of, 688,500 tablets or 1,245 pounds of the medication Carisoprodol have been in seized in the same six-month timeframe. Carisoprodol is a schedule IV prescription used to treat musculoskeletal pain. Carisoprodol has serious side-effects to include addiction and seizures. Additionally, when mixed with opiates, this prescription could cause users to aspirate while they are unconscious, and Carisoprodol is sometimes mixed with date-rape drugs. The parcels containing this prescription also mostly came from India, were in various dosages, and were heading to addresses across the U.S. These parcels would have had a street value of $1.7 million.
“Our officers are exceptional at what they do and are part of the best frontline defense in the world,” said Shane Campbell, Area Port Director-Chicago. “Their skill and determination saved lives by taking hundreds of pounds of these dangerous prescriptions off the streets.”
CBP conducts operations at ports of entry throughout the United States, and regularly screens arriving international passengers and cargo for narcotics, weapons, and other restricted or prohibited products. CBP strives to serve as the premier law enforcement agency enhancing the Nation’s safety, security, and prosperity through collaboration, innovation, and integration.
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FTC Votes to Reverse Course on Repeal of Fabric Care Labels - Federal Trade Commission
The Federal Trade Commission voted in an open Commission meeting to retain the FTC Care Labeling Rule to ensure American consumers continue to get accurate information on how to take care of their fabrics and extend the life of their clothes. In a statement, the Commission also indicated that it will continue to consider ways to improve the Rule to the benefit of families and businesses.
The Care Labeling Rule has been in effect since 1971 and requires manufacturers and importers to attach labels with care instructions for garments and certain piece goods, providing instructions for dry cleaning or washing, bleaching, drying and ironing clothing. Public comments solicited by the FTC over the past decade show the Care Labeling Rule continues to provide valuable guidance and serve as an important tool for consumers, manufacturers, retailers, designers and dry cleaners alike.
In July 2020, in the middle of the pandemic, the Commission voted 3-2 to propose repealing this consumer protection altogether. Following that action, the FTC received more than 200 comments, with an overwhelming majority opposed to the repeal of the rule.
“The Federal Trade Commission first promulgated the Care Labeling Rule in 1971, with the goal of ensuring buyers were provided clear and accurate information on how to take care of their fabrics. Since then, the agency periodically has reviewed the rule, seeking public comments to ensure the rule is keeping pace with new developments and still providing buyers with relevant information,” said FTC Chair Lina Khan in the open Commission meeting. “After careful consideration, I believe the record supports retaining the Care Labeling Rule and that it should not be rescinded.”
Submissions to the most recent public comment period led the Commission to conclude that repealing the rule would not be in the public interest. Many individuals and small businesses opposed the repeal, emphasizing that buyers rely on labels to help extend the life of their clothes.
Other comments the FTC received from the apparel manufacturing and cleaning industries indicated that removing the labels would increase the likelihood that their customers’ items might be damaged in the wash and, as a result, expose their businesses to unnecessary liability, the Commission noted.
The Commission voted 5-0 to issue a statement to notify the public that it will not repeal the Care Labeling Rule, as previously proposed.