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Federal Register / Vol. 86, No. 132 / Wednesday, July 14, 2021 / Rules and Regulations
proposed processed, fabricated, and packaged. 76 Finally, one commenter suggested, to deter unscrupulous marketers effectively, the list should include claims that products are Distributed by: a company name followed by a U.S. address.77
Several commenters also asked the Commission to clarify that the Rule covers implied claims.78 As AAM
explained, the use of iconography, such as the American flag, used in the promotion of products should also be considered for its potential to evoke the positive qualities consumers associate with Made in USA, as well as the prospect of such iconography being used in a deceptive manner. 79
3. Effective Date Finally, two commenters requested the FTC provide an extended compliance period before the rules effective date. Specifically, ACA and McKenna Walsh argued companies would need time to come into compliance with the Rule. In their view, the FTC should delay implementation to give companies the opportunity to generate new marketing materials and run out old stock.80
4. Analysis After analyzing the comments, the Commission finds the rule and its coverage clear on its face, with sufficient flexibility to address a changing marketplace. Therefore, as discussed further below, the Commission issues the rule without additional definitions or clarifications, or a delayed effective date.81
i. Definitions The Commission declines to adopt definitions of all or virtually all and significant processing, or to expand the existing definition of mail order catalog or mail order promotional material. The Commission has issued extensive guidance to help marketers understand the all or virtually all standard. As the Policy Statement explains, A product that is all or virtually all made in the United States will ordinarily be one in which all significant parts and processing that go into the product are of U.S. origin. In 76 RCALF

USA 588.
J. Versaggi 496.
78 See, e.g., Shirley Boyd 6; Power Planter Inc.
325; AAM 611; American Shrimp Processors Association ASPA 633.
79 AAM 611.
80 ACA 666; McKenna Walsh 581.
81 As discussed in Section III, the Final Rule contains a provision clarifying that, in appropriate circumstances, covered entities may petition the Commission for an exemption from the Rules requirements.

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other words, where a product is labeled or otherwise advertised with an unqualified claim, it should contain only a de minimis, or negligible, amount of foreign content. Although there is no single bright line to establish when a product is or is not all or virtually all made in the United States, there are a number of factors to consider in making this determination. First, in order for a product to be considered all or virtually all made in the United States, the final assembly or processing of the product must take place in the United States. Beyond this minimum threshold, the Commission will consider other factors, including but not limited to the portion of the products total manufacturing costs attributable to U.S.
parts and processing; how far removed from the finished product any foreign content is; and the importance of the foreign content to the form or function of the product. Accordingly, the Commissions existing guidance and enforcement documents, including the Policy Statement, decisions and orders enforcing the all or virtually all standard, and staff closing letters, together provide ample guidance to marketers.
As discussed above in Section II.B.3., all or virtually all and significant processing intentionally incorporate flexibility to allow marketers to substantiate their claims consistent with consumer perception of their particular products. The Commissions enforcement program has long recognized the need for such flexibility as described in the Policy Statement, which was based on the Commissions decisions and orders. The Commission has continued to follow this flexible approach, and incorporated it into its post-Policy Statement decisions and orders. Adding specific definitions for these terms may increase clarity for marketers in the short term because the rule covers so many product categories across a range of circumstances, but the Commission has determined adding further specificity also increases the risk the rule would chill certain nondeceptive claims. Marketers seeking additional guidance may look to the Policy Statement, decisions and orders, and other Commission guidance to understand how the FTC has analyzed all or virtually all and significant processing. 82
The Commission also declines to adopt a definition of mail order catalog or mail order promotional material that specifically incorporates restaurant menus. The Commission has 82 See Policy Statement, 62 FR 63756, 63768 Dec.
2, 1997.

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not reviewed perception evidence regarding consumer understanding of MUSA claims on restaurant menus, and therefore declines to define such claims as covered labels for purposes of Section 45a.
ii. Covered Claims The Commission also concludes it is unnecessary to revise the definitions to provide an expanded list of synonyms for the term Made in U.S.A., or provide further clarification the rule covers implied claims. Section 323.1 as proposed already defines Made in U.S.A. as any unqualified representation, express or implied, that a product or service, or a specified component thereof, is of U.S. origin, including, but not limited to, a representation that such product or service is made, manufactured, built, produced, created, or crafted in the United States or in America, or any other unqualified U.S.-origin claim emphasis added.83
The list of equivalents to Made in USA set forth in Section 323.1 is not exhaustive because the means of communicating U.S. origin are too numerous to list. The Commission believes the non-exhaustive list of examples given provide sufficient guidance on the scope of covered express and implied claims. These examples are based on the Commissions decades of enforcement experience addressing MUSA claims.
For other claims, the Commission will analyze them in context, including the terms used, their prominence, and their proximity to images and other text.
iii. Effective Date Lastly, the Commission declines to delay the rules effective date. As discussed above in Section I, the rule codifies the FTCs longstanding guidance on MUSA claims. The FTC has incorporated the all or virtually all standard into decisions and orders and guidance for industry and the public since the 1990s.84 Because the rule merely codifies these longstanding enforcement principles and imposes no new requirements on marketers, the Commission concludes a delayed effective date is unnecessary.
83 16

CFR 323.1.
generally https www.ftc.gov/tips-advice/
business-center/advertising-and-marketing/madein-usa. The Commission has explained that prior to the 1990s, this standard was described as the wholly domestic standard, and both wholly domestic and all or virtually all refer to the concept that unqualified claims of domestic origin have been treated as claims that the product was in all but de minimis amounts made in the United States. 62 FR 63756 Dec. 2, 1997.
84 See
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