Federal Laws on "MADE IN
THE U.S.A." Labeling
Federal Laws on "MADE IN THE
U.S.A." Labeling
The views expressed are those of the author and do not
necessarily reflect the views of any department or agency
of the Federal Government.
I. Article 5 of the Federal Trade Commission Act, 15
U.S.C. 45
The Federal Trade Commission Act is a consumer protection
statute whereby any false or misleading representations
as to the origin of a commodity constitutes an unfair or
deceptive practice in commerce.
The rationale for the rules stem from the belief that the
public sometimes prefers domestic over foreign products
and will assume a product is of domestic origin unless
stated otherwise. Consequently, the public is deceived if
not informed of foreign origin.
II. Customs vs. FTC Jurisdiction
Customs has jurisdiction over foreign articles entering
the U.S. customs territory. Customs determines origin,
and whether the good is properly labeled under the
substantial transformation rule and other judicial and
administratively created rules.
The FTC then has jurisdiction over the proper labeling of
goods that have undergone substantial
transformation in the United States pursuant to the rules
set out below.
III. FTC Practice
No statutes or regulations govern specific labeling
requirements with regard to FTC labeling requirements
(with certain exceptions referenced below). FTC practice
is completely administrative (advisory & staff
opinions). For purposes of determining if a product may
be labeled "made in the U.S.A." or an
equivalent expression, the FTC employs the following cost
analysis:
1. 100% U.S. - If the product is 100% U.S. parts and
labor, it may be labeled as "Made in the
U.S.A." or any equivalent expression.
2. 100% Foreign - If the product is entirely of foreign
origin it must be labeled with a foreign country of
origin label pursuant to Customs jurisdiction.
3. 50% or More U.S. - If more than 50% of the value of
the product (parts plus labor) is U.S., the manufacturer
may:
(i) remain completely silent about country of origin
(thereby not deceiving the public); or
(ii) provide an accurate disclosure of foreign component
parts, i.e., "Made in the U.S.A. of American and X
country component parts". [in other words, if less
than 50% of the value is foreign, it is not considered to
be deceptive to remain silent, but if disclose anything,
must disclose it all.]
4. 50% or More Foreign - If more than 50% of the value of
the product is foreign, the manufacturer must accurately
disclose the foreign component parts "Made in U.S.A.
of American, Taiwanese and Chinese parts".
5. 50%-50% Split - No advisory opinion has been issued
regarding a 50%-50% split of U.S. and foreign value.
According to the FTC, given the nature of a complete cost
breakdown (parts plus labor), it is unlikely that an
exact 50-50 split would occur.
IV. Enforcement
1. Federal Trade Commission Act - Pursuant to Article 5
of the FTC Act, the FTC may issue a cease and desist
order requiring a person using unfair or deceptive acts
or practices in commerce to cease and desist from using
such act or practice found to be unlawful. Such order is
subject to review by the U.S. Court of Appeals. If a
person violates a final order by the Commission, a fine
not to exceed $10,000 for each violation may be levied.
2. Lanham Trade Mark Act, 15 U.S.C. 1125 (1993)
-- Provides a private right of action against another
private party for false declaration of origin or any
false description or representation with regard to goods
entering commerce if it is likely to cause confusion or
to deceive purchasers into believing that the source of
origin of goods is another. This does not merely refer to
geographical origin but also to origin of source of
manufacture.
-- Statute provides for civil action by any person that
believes that he or she is likely to be damaged by such
act.
-- The purpose of the provision is to
prevent unfair competition by enabling producers to
differentiate their products from those of others and to
protect consumers against deceptive designations of
origin of goods.
V. Special Rules
1. The Federal Trade Commission also regulates several
specific labeling acts:
a. The Wool Products Labeling Act of 1939, 16 C.F.R.
300.1-300.35, generally requires that all wool products
bear a label indicating: the percentage of the total
fiber weight of the wool product of wool, recycled wool,
each
fiber other than wool, and the aggregate of all other
fibers of the product. The label must also indicate the
maximum percentage of the total weight of the wool
product, of any nonfibirous loading, filling or
adulterating matter. Moreover, the Label must include the
identification of the manufacturer. Additionally, the
label must include the name of the country where the wool
product was processed or manufactured, including if
processed or manufactured in the United States (if the
product is advertised in mail order promotional
material).
b. The Fur Products Labeling Act, 16 C.F.R.
301.1-301.49, generally requires that all fur products
bear a label indicating: the name(s) of the animal(s)
that produced the fur; that used fur is present in the
product if such is the case; that the fur product was
artificially colored, if such is the case; that the
product is composed of tails, paws, bellies or waste fur,
if such is the case; the name of the manufacturer; and
the name of the country of origin of imported fur used in
the product.
c. The Textile Fiber Products Identification Act, 16
C.F.R. 303-303.14, generally requires that all
textile products bear a label indicating: the name of the
constituent fiber or combination of fibers in the textile
product; the percentage of each fiber present, by weight;
the name of the manufacturer; and the name of the country
where the product was processed or manufactured,
including if processed or manufactured in the
United States.
2. American Automobile Labeling Act, 15 U.S.C. 1950
(1993), regulated by the Department of Transportation
provides new labeling requirements for passenger
automobiles for sale in the U.S. Labels must indicate the
percentage of equipment originating in the U.S. and
Canada, the names of at least two foreign countries
contributing the greatest value of parts, as well as the
country of origin of the engine, the transmission.
Allyson L. Senie
Office of the Chief Counsel for International Commerce
U.S. Department of Commerce
202/482-0937
May 1994
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