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Federal Register / Vol. 86, No. 132 / Wednesday, July 14, 2021 / Rules and Regulations authority in Section 5 of the FTC Act.115
Marketers should continue to consult the Policy Statement for guidance on the application of the Commissions Section 5 analysis to such claims including, but not limited to, Assembled in USA, claims indicating the amount of U.S.
content e.g., 60% U.S. Content, claims indicating the parts or materials that are imported e.g., Made in USA
from imported leather, or claims about specific processes or parts e.g., claims a product is designed, painted, or written in the United States.
5. Civil Penalties Some commenters argued that larger businesses may not be sufficiently deterred by the current maximum civil penalty amounts for violations of Commission rules and recommended that civil penalties should be increased for larger firms.116 The Commission lacks authority, however, to establish civil penalty maximums that depart from the levels provided by statute.
Civil penalty amounts for violations of the Commissions rules are established by the FTC Act.117 Nonetheless, the Commission believes that its civil penalty authority generally provides an effective deterrent against rule violations, and notes that civil penalties for violations of a rule are assessed per violation. Moreover, the FTC Act establishes a series of factors for courts to consider in assessing appropriate civil penalty amounts in individual enforcement matters, including the degree of culpability, any history of prior such conduct, ability to pay, effect on ability to continue to do business, and such other matters as justice may require. 118 To the extent firm size is an appropriate consideration within one or more of these factors, the Commission will take that factor into account in seeking civil penalties.

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III. Final Rule For the reasons described above, the Commission has determined to adopt the substantive provisions of the rule as initially proposed. Specifically, the rule covers labels on products that make unqualified MUSA claims. It codifies the Commissions previous MUSA
Decisions and Orders and prohibits marketers from making unqualified MUSA claims on labels unless: 1 Final assembly or processing of the product occurs in the United States, 2 all 115 15

U.S.C. 45a.
Posey 7.
117 See 15 U.S.C. 45m1A establishing civil penalties for violations of Commission rules; see also 16 CFR 1.98 stating currently applicable maximum civil penalty amounts.
118 15 U.S.C. 45m1C.
116 Chris
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significant processing that goes into the product occurs in the United States, and 3 all or virtually all ingredients or components of the product are made and sourced in the United States. The rule also covers labels making unqualified MUSA claims appearing in mail order catalogs or mail order advertising.
To avoid confusion or perceived conflict with other country-of-origin labeling laws and regulations, the rule specifies that it does not supersede, alter, or affect any other federal or state statute or regulation relating to countryof-origin labels, except to the extent that a state country-of-origin statute, regulation, order, or interpretation is inconsistent with the rule.
Finally, the Commission has adopted a new Section, 323.6, to address commenter concerns about the applicability of the all or virtually all standard across product categories. This provision allows marketers and other covered persons to seek full or partial exemptions if they can demonstrate application of the rules requirements to a particular product or class of product is not necessary to prevent the acts or practices to which the rule relates. The Commissions rules of practice governing petitions for rulemaking provide the procedures for submitting such petitions.119 Pursuant to this process, interested persons may file relevant consumer perception evidence and data with the Commission. If the Commission deems the petition sufficient to warrant further consideration, it will follow the procedures outlined in Section 1.25 of its rules.
IV. Paperwork Reduction Act The Paperwork Reduction Act PRA, 44 U.S.C. 3501 et seq., requires federal agencies to seek and obtain Office of Management and Budget OMB approval before undertaking a collection of information directed to ten or more persons. The Commission has determined that there are no new requirements for information collection associated with this final rule.
V. Regulatory Flexibility Act The Regulatory Flexibility Act RFA, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, requires that the Commission provide an Initial Regulatory Flexibility Analysis with a proposed rule, and a Final Regulatory Flexibility Analysis with the final Rule, unless the Commission certifies that the proposed Rule will not have a
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119 See
significant impact on a substantial number of small entities.120
The Commission recognizes some affected entities may qualify as small businesses under the relevant thresholds. However, the Commission anticipates that the final Rule will not have the threshold impact on small entities. First, the rule includes no new barriers to making claims, such as reporting or approval requirements.
Second, the rule merely codifies standards established in FTC
enforcement Decisions and Orders for decades. Therefore, the Rule imposes no new burdens on law-abiding businesses.
Accordingly, the Commission certifies that the final rule will not have a significant economic impact on a substantial number of small businesses.
Although the Commission certifies under the RFA that the amendment will not have a significant impact on a substantial number of small entities, the Commission has determined, nonetheless, that it is appropriate to publish a Final Regulatory Flexibility Analysis in order to explain the impact of the amendments on small entities as follows:
A. Description of the Need for and Objectives of the Rule The Commission proposed the MUSA
Labeling Rule for two primary reasons:
To strengthen its enforcement program and make it easier for businesses to understand and comply with the law.
Specifically, by codifying the existing standards applicable to MUSA claims in a rule as authorized by Congress, the FTC will be able to provide more certainty to marketers about the standard for making unqualified claims on product labels, without imposing any new obligations on market participants.
In addition, enactment of the Rule will enhance deterrence by authorizing civil penalties against those making unlawful MUSA claims on product labels.
B. Issues Raised by Comments in Response to the IRFA
The Commission received six comments specifically related to the impact of the Rule on small businesses.121 Of those six, all 120 5

U.S.C. 603605.
24 commenter is unaware of small entities affected by the NPRM; UIUCBADM
403A02 25 commenter is unaware of small entities affected by the NPRM; Family Farm Action Alliance 543 anticipating positive economic outcomes for small business entities as a result of the rule; Leo McDonnell 578 anticipating benefits for small businesses, including ranchers and feeders; McKenna Walsh 581 stating the Rule will be helpful for small businesses lacking resources to engage in MUSA litigation; Natural 121 Anonymous
16 CFR 1.25.

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