FTC Closing Letter Provides Guidance on Making Qualified "Made in USA" Claims

The Federal Trade Commission recently closed two investigations into marketers' U.S.-origin claims.  In the investigation involving ROKA Sports, the FTC provided some helpful guidance on making qualified U.S.-origin claims.  Here are the details. 

ROKA Sports

The FTC looked into advertising claims made by ROKA Sports that its eyewear is “Handbuilt in USA” or “Handbuilt in Austin, TX.”  The FTC expressed concerns that ROKA overstated the extent to which its products are made in the United States due to the fact that some of its products incorporate imported frames, lenses, or other significant components. 

According to the FTC's Enforcement Policy Statement on U.S. Origin Claims, in order to make an unqualified claim that a product is made in the United States, the advertiser must be able to substantiate that the product was “all or virtually” all made here.  That means that all significant parts and processing that go into the product are of U.S. origin and that the product was last substantially transformed in the United States.  (This standard has also been codified in the FTC's Made in USA Labeling Rule.)

Interestingly, in its letter closing the investigation, the FTC provided some detailed guidance to the company about making qualified U.S.-origin claims.  The FTC explained that marketers may make “any qualified claim that is truthful and substantiated," and then the FTC gave some examples of types of qualifications that would acceptable.  First, the FTC explained that a marketer could simply alert consumers to the existence of foreign content in the product by making a statement such as “Made in USA of Imported Parts.”  The agency also said that the marketer could identify the particular countries where where the parts came from, such as by saying, ""Made in USA from French and Korean parts."  The FTC also indicated that the marketer could also choose just to specify the amount of content that comes from the United States, such as by saying, “60% U.S. Content.” 

The FTC also provided guidance on making a claim that a product was assembled in the United States.  As a general matter, in order to make an “Assembled in USA” claim, the marketer must be able to substantiate that the product was last substantially transformed in the United States, that the principal assembly took place in the United States, and that the United States assembly operations were substantial.  Significantly, the FTC indicated that, “In most cases, marketers need not qualify 'Assembled in USA' claims with information about the origin of the parts or materials the product contains."  In other words, if you can substantiate that the product was assembled here, you don't need to provide information about the fact that the product contains foreign components.  

Finally, the FTC cautioned marketers not to make U.S. origin claims if a product is last substantially transformed abroad and is thus required by Customs and Border Protection to be marked with a foreign country of origin. 

Maverick Abrasives Corporation

The FTC also looked into claims by Maverick Abrasives Corporation that its abrasive, polishing, and other products are “American Made” and that the company is a “USA made manufacturer.”  In its letter closing the investigation, the FTC expressed concerns that these claims may be misleading because many of the company's products contain significant imported content.