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Federal Register / Vol. 86, No. 132 / Wednesday, July 14, 2021 / Rules and Regulations beans in ground coffee. 62 However, the flexibility inherent in the all or virtually all analysis accounts for the possibility a marketer could substantiate an unqualified claim for a product containing nonindigenous raw materials if the manufacturer has evidence demonstrating the specific claim in context does not deceive consumers.63
Third, the record also does not support adopting government standards developed for other purposes e.g., the CBP substantial transformation standard developed for the imposition of tariffs as part of the rule. Based on its enforcement experience, the Commission is concerned the standards adopted by CBP for purposes of calculating tariffs are not an appropriate fit for the Commissions regulation of MUSA claims on product labels for purposes of consumer disclosure. For example, there is ample evidence consumers care deeply about the source of the components used to manufacture drywall for construction projects. Under a substantial transformation analysis, drywall made wholly of materials from one nation, but substantially transformed in a different country, would be labeled as originating from the country where those materials were ultimately transformed into a final product. Marketers would not need to disclose the origin of the inputs other than labor information highly material to many consumers. Thus, employing such a standard would in some cases conflict with the Rules purpose of ensuring consumers have the material information necessary to make informed purchasing decisions.
Finally, the rule does not include an explicit carve-out for businesses that act in good faith. Courts have long held good faith is not a defense for a violation of Section 5 of the FTC Act,64
and the Commission intends to enforce the rule consistent with this precedent.
Violative claims made in good faith can still deceive and cause significant harm to consumers. However, the FTC
clarifies it will continue to: 1 Advise marketers that, if provided in good faith, 62 Id.

at 63769 n.117.
Policy Statement explains in some cases where a raw material is not found or grown in the United States and that raw material does not constitute the whole or essence of the finished product, consumers are likely to understand that a Made in USA claim on a product that incorporates such materials e.g., vanilla ice cream that uses vanilla beans, which, the Commission understands, are not grown in the United States means that all or virtually all of the product, except for those materials not available here, originated in the United States. Id. The Policy Statement provides that this guidance applies only to raw materials, not manufactured inputs.
64 See, e.g., FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1029 7th Cir. 1988.

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marketers can rely on information from suppliers about the domestic content in the parts, components, and other elements they produce; 65 2 generally conserve enforcement resources for intentional, repeated, or egregious offenders; and 3 provide informal staff counseling where appropriate.
C. Requests for Additional Definitions and Other Clarifications The Commission received several comments arguing the proposed Rule was unclear or provided insufficient guidance for marketers. To remedy these asserted problems, several commenters urged the FTC to add definitions for particular terms, including all or virtually all and significant processing. Other commenters expressed concern the Rule was not sufficiently clear about the range of claims it would cover, suggesting the FTC list additional synonyms for Made in USA to which the rule would apply.
Finally, others requested a delayed effective date to allow marketers to update materials and come into compliance.
1. Definitions More than twenty commenters recommended adding definitions or providing more information to clarify the rule. Without definitions, the commenters feared marketers would lack clear guidance for verifying MUSA claims and thus may be deterred from making them altogether.66 Some of these commenters offered clarifying edits or proposed definitions, often as fallback positions to their main arguments advocating alternative standards entirely.67
In particular, in addition to commenters who recommended specifying percentage thresholds for all or virtually all, several commenters requested the Commission generally define the phrase, without providing specific information on what that definition should include e.g., factors considered, etc..68 As AAEI elaborated:
One of the FTCs stated reasons for this proposed rulemaking is to provide 65 See FTC, Complying with the Made in USA
Standard, at 78 Dec. 1998, available at https
www.ftc.gov/system/files/documents/plainlanguage/bus03-complying-made-usa-standard.pdf also providing an example of a certification a marketer could request from a supplier that generally would constitute an acceptable basis for determining the appropriate country-of-origin designation for a product.
66 RILA 570.
67 E.g., AAEI 605 advocating adoption of the substantial transformation standard.
68 See, e.g., Shirley Boyd 6; Pacific Coast Producers 27; RILA 570; Vietnam 577; AAEI
605; NFI 628; ACA 666; AAFA 675.

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more certainty to marketers about the standard for making unqualified claims on product labels. Yet, the proposed all or virtually all standard does not provide that certainty . . . It simply codifies the FTCs already existing ambiguous standards. 69 Two commenters specifically asked the Commission to incorporate information on whether marketers should consider the origin of product packaging into such a definition.70
Similarly, three commenters requested the Commission define significant processing. 71 As Pacific Coast Producers explained, the significant processing and all or virtually all terms have always been ambiguous, and the proposed rule does not help to remove the ambiguity or provide any meaningful guidance to industry. 72
Finally, more than thirty commenters, primarily representing the domestic shrimp industry, argued the Commission should clarify that the definitions of mail order catalog and mail order promotional material include restaurant menus. As the Louisiana Shrimp Association LSA
explained, inappropriate practices by some restaurants in offering menu items that falsely indicate to customers that imported shrimp is domestic, such as Gulf Shrimp. . . not only confuse consumers, but fatally undermine the marketing efforts of restaurants that do carry domestic shrimp. 73 To solve this problem, SSA urged the Commission to exercise jurisdiction over Made in U.S.A. statements on restaurant menus, as a form of Mail order promotional material or mail order catalog. 74
2. Covered Claims Several commenters suggested the Rule was not sufficiently clear about which U.S.-origin claims it covers. In particular, commenters requested a longer list of claims the Commission considers equivalent to Made in USA, as well as a specific statement that the Rule covers implied claims.
One commenter suggested adding constructed, fabricated, and assembled to the list.75 Another 69 AAEI

605.
Lafayette 20; Jaymee Westover 358.
71 Shirley Boyd 6; Pacific Coast Producers 27;
RILA 570.
72 Pacific Coast Producers 27.
73 LSA 404.
74 SSA 380 further explaining menus should fall under this definition because they are used in the direct sale or offer for sale of a product, are disseminated in print or can be delivered by electronic means, and are solely disseminated to solicit the purchase of a product.
75 Frost Brown Todd LLC 522.
70 Deontae
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