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Federal Register / Vol. 86, No. 132 / Wednesday, July 14, 2021 / Rules and Regulations all or virtually all ingredients or components of the product are made and sourced in the United States.

compliance with alternative standards or requirements to be prescribed by the Commission.

323.3 Applicability to mail order advertising.

By direction of the Commission.
April J. Tabor, Secretary.

To the extent that any mail order catalog or mail order promotional material includes a seal, mark, tag, or stamp labeling a product Made in the United States, such label must comply with 323.2.
323.4

Enforcement.

Any violation of this part shall be treated as a violation of a rule under section 18 of the Federal Trade Commission Act, 15 U.S.C. 57a, regarding unfair or deceptive acts or practices.
323.5

Relation to Federal and State laws.

a In general. This part shall not be construed as superseding, altering, or affecting the application of any other federal law or regulation relating to country-of-origin labeling requirements, including but not limited to the Federal Meat Inspection Act, 21 U.S.C. 601 et seq., the Poultry Products Inspection Act, 21 U.S.C. 451 et seq., and the Egg Products Inspection Act, 21 U.S.C. 1031
et seq. In addition, this part shall not be construed as superseding, altering, or affecting any other State statute, regulation, order, or interpretation relating to country-of-origin labeling requirements, except to the extent that such statute, regulation, order, or interpretation is inconsistent with the provisions of this part, and then only to the extent of the inconsistency.
b Greater protection under State law.
For purposes of this section, a State statute, regulation, order, or interpretation is not inconsistent with the provisions of this part if the protection such statute, regulation, order, or interpretation affords any consumer is greater than the protection provided under this part, as determined by the Commission on its own motion or upon the petition of any interested party.

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323.6

Exemptions.

Any person to whom this Rule applies may petition the Commission for a partial or full exemption. The Commission may, in response to petitions or on its own authority, issue partial or full exemptions from this part if the Commission finds application of the Rules requirements is not necessary to prevent the acts or practices to which the Rule relates. The Commission shall resolve petitions using the procedures provided in 1.25 of this chapter. If appropriate, the Commission may condition such exemptions on
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The following Appendices will not Appear in the Code of Federal Regulations.
Appendix I: Statement of Commissioner Rohit Chopra Joined by Chair Lina Khan and Commissioner Rebecca Kelly Slaughter Today, the Commission has voted to adopt a final Made in USA rule. The final rule reflects a substantial number of comments from the public, which overwhelmingly supported this policy change by the Commission. By formally codifying this rule, the Commission has activated a broader range of remedies, including the ability to seek redress, damages, penalties, and other relief from those who lie about a Made in USA label. The rule will especially benefit small businesses that rely on the Made in USA label, but lack the resources to defend themselves from imitators.
Absent this rule, the Commission would be unable to seek this full set of sanctions.
Importantly, this is a restatement rule, which affirms longstanding guidance and legal precedent with respect to Made in USA
labelsthereby imposing no new obligations on manufacturers and sellers. Because of the stricter sanctions they trigger, restatement rules such as this one will increase fraud deterrence and ensure that victims can be made whole.
Background on the FTCs Permissive Policy on Made in USA Fraud For decades, there has been a bipartisan consensus among Commissioners that Made in USA fraud should not be penalized. In my view, this policy posture was in direct contravention of both the letter and spirit of the law Congress enacted.
In 1994, shortly after the North American Free Trade Agreement took effect, Congress enacted legislation to protect the integrity of our national brand by explicitly authorizing the FTC to trigger penalties and other relief for Made in USA fraud, but only after formally codifying a rule.1 However, the Commission never even proposed one.2
Instead, over the past quarter century, Commissioners implemented a highly permissive Made in USA fraud policy, where violators faced essentially no consequences whatsoever. Even in cases of blatant abuse of the Made in USA label, Commissioners routinely voted to allow wrongdoers to settle for no restitution, no forfeiture of ill-gotten gains, no admission or findings of liability, 15 U.S.C. 45a.
generally Statement of Commissioner Rohit Chopra Regarding Activating Civil Penalties for Made in USA Fraud Apr. 17, 2019, https
www.ftc.gov/public-statements/2019/04/statementcommissioner-rohit-chopra-regarding-activatingcivil-penalties.

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and no notice to victims.3 In adopting this rule, the Commission acknowledges that this longstanding policy was misguided and agrees that the codification of todays final rule is long overdue.
Noteworthy Provisions of the Final Rule In 2019, TINA.org filed a petition with the Commission to promulgate a rule, given the rampant Made in USA fraud across sectors of the economy. In 2020, the Commission issued a Notice of Proposed Rulemaking and then analyzed a substantial number of comments from producers, consumers, foreign governments, and others.4 After considering these comments, the Commission has adopted a rule consistent with the authority granted by Congress in 1994. There are several aspects worthy of brief discussion.
First, the Commission has codified the all or virtually all standard, consistent with the FTCs longstanding Enforcement Policy Statement on U.S. Origin Claims.5 This standard covers unqualified claims. The Commission must protect the public from deception, and the agency declines to adopt alternative approaches, as explained in the final rule.
Second, the Commission has outlined a definition of label consistent with the Commissions expertise on labeling. While the Commission declines to adopt a definition that includes a list of specific examples, such as restaurant menus, the definition of label does extend beyond labels physically affixed to a product. As described in the rule, other depictions of labels are also covered; in some circumstances, labels appearing online may also be subject to the rule.6 The Commission declines to cover advertising more broadly, as this is inconsistent with the authority granted by Congress.
Third, there was considerable interest in the rulemaking from farmers, ranchers, and others in the meat and agricultural industry, with the majority of comments arguing in favor of stricter standards. The rule declines to grant an exemption sought by the meatpacking industry, as this would be inconsistent with the Commissions authority prescribed by Congress under the Packers and Stockyards Act.7 However, contemporaneous with the FTCs vote today, the U.S. Department of Agriculture has announced that it will be conducting a topto-bottom review of its labeling standard.
USDA has previously acknowledged that its 3 Even without a final rule, Commissioners could have sought more in administrative settlements, given that much of the Made in USA fraud detected by Commission staff met the definition of dishonest or fraudulent in Section 19 of the FTC
Act. 15 U.S.C. 57b. Instead, Commissioners routinely accepted settlements with no meaningful relief at all.
4 The Commission received over 700 comments in response to its Notice of Proposed Rulemaking on Made in USA labeling. See FTC Seeks Comments on MUSA Rulemaking, Matter No. P074204, Docket ID FTC20200056 July 16, 2020, https
www.regulations.gov/docket/FTC-2020-0056.
5 See Made in USA and Other U.S. Origin Claims, 62 FR 63756 Dec. 2, 1997.
6 See 16 CFR 323.3.
7 See 7 U.S.C. 227.

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