FTC Reminds Businesses that “Made in USA” Means What It Says

The FTC took action against three New England-based clothing accessories companies (Chaucer Accessories and related entities) and their owner, Thomas Bates, for falsely claiming that their products were “Made in USA,” “Hand Crafted in USA,” or “Made in USA with Global Materials,” when in fact the products were barely assembled in the United States or contained materials from foreign countries. For example, belts marketed as “Made in USA from Global Materials” were made from imported belt straps affixed to buckles in the United States and shoes labeled “Made in USA” were made from either wholly imported materials or contained a significant amount of imported content. Notably, the FTC brought this action under Section 5 of the FTC Act and not the Made in USA Labeling Rule, which may not cover statements made on social media, websites, etc., or qualified “Made in USA” claims.

In the final order, the FTC reiterated that products cannot be marketed as “Made in the United States” unless “[t]he 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.” Qualified “Made in the United States” claims must contain a clear and conspicuous qualification “immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients or components, and/or processing.” And for claims that a product is assembled in the United States, the product must be “last substantially transformed in the United States,” the product’s principal assembly must take place in the United States, and the United States assembly operations must be substantial.

The FTC alleged that Chaucer’s claims did not meet the above requirements because the promotional materials expressly stated or implied that the products were “Made in USA” or “Made in USA from Global Materials” when they were either wholly imported or substantially imported. For the assembly claims, the FTC alleged that Chaucer’s products did not meet the above requirements because activities like affixing a buckle to a strap are “de minimus finishing.” With the final order, Chaucer and Bates are prohibited from (1) making unqualified “Made in USA” claims or “assembled in USA” claims unless the above requirements are met and (2) making qualified “Made in USA” claims without the required qualifications. The FTC also required Chaucer and Bates to pay civil penalties for their violations.

This case makes clear that “Made in USA” means what it says. It also serves as a reminder that the FTC will continue to enforce deceptive or misleading “Made in USA” claims even if they do not expressly violate the Made in USA Labeling Rule.

Citations

In re Chaucer Accessories, Inc., Docket No. C-4797 (August 22, 2023)