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Federal Register / Vol. 86, No. 132 / Wednesday, July 14, 2021 / Rules and Regulations
anticipated the rule would benefit small businesses, with the exception of the Natural Products Association, which argued that the Rule would impose costs on dietary supplement manufacturers that would have to relabel products.122
The FTC notes that the rule imposes no new requirements on dietary supplement manufacturers, and that products requiring relabeling as a result of the FTCs rule were likely deceptively labeled prior to the Rules publication.
The Chief Counsel for Advocacy of the Small Business Administration did not submit comments.
C. Estimate of Number of Small Entities to Which the Rule Will Apply The Small Business Administration estimates that in 2018 there were 30.2
million small businesses in the United States. The rule will apply to small businesses that make MUSA claims on product labels. The Commission estimates the rule will not have a significant impact on these small businesses because it does not impose any new obligations on law-abiding businesses; rather, it merely codifies standards established in FTC
enforcement Decisions and Orders for decades.

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D. Projected Reporting, Recordkeeping, and Other Compliance Requirements, Including Classes of Covered Small Entities and Professional Skills Needed To Comply The rule imposes no affirmative reporting or recordkeeping requirements. The rules compliance requirements, consistent with the Policy Statement and longstanding Commission case law, require that marketers may not make unqualified U.S.-origin claims on product labels unless final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States. The small entities potentially covered by the rule will include all such entities that make MUSA claims on product labels.
The rule codifies the standard for MUSA claims established in Commission Decisions and Orders, and no new obligations are anticipated.
Products Association 618 stating the rule would require small dietary supplement businesses to relabel products.
122 Natural Products Association 618.

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E. Description of Steps Taken To Minimize Significant Economic Impact, if Any, on Small Entities, Including Alternatives The Commission sought comment and information on the need, if any, for alternative compliance methods that would reduce the economic impact of the rule on such small entities. Several commenters proposed alternatives to the proposed rule including: 1 Introducing a percentage-of-costs standard; 2
adopting a standard that makes allowances for imported parts or materials not available in the United States; 3 aligning with CBPs substantial transformation standard; or 4 adding a safe harbor for good faith efforts to comply. Other commenters proposed that the Commission provide for a delayed effective date to allow businesses additional time to comply.
As discussed above, the Commission has declined to adopt these alternatives because it believes they would undermine the effectiveness of the rule.
In addition, the Natural Products Association recommended the FTC
incorporate an example specific to dietary supplements.123 The Commission has declined to include examples specific to any particular industry in the Rule. The rule codifies the standards articulated in Commission enforcement decisions that have been applicable to MUSA claims for decades.
FTC guidance and enforcement decisions provide numerous examples demonstrating how to apply the all or virtually all standard in a variety of industries. Accordingly, the Commission has concluded that it is unnecessary to provide industryspecific examples in the Rule.
As described previously, the rule merely codifies standards already established in FTC enforcement Decisions and Orders. It does not impose new substantive obligations on businesses that have already been complying with their obligations to avoid deceptive claims under Section 5
of the FTC Act. Under these circumstances, the Commission does not believe a special exemption for small entities or significant compliance alternatives are necessary or appropriate to minimize the compliance burden, if any, on small entities while achieving the intended purposes of the rule.
Nonetheless, the Commission has adopted a provision allowing covered persons to petition the Commission for an exemption from the Rule if application of the rules requirements is
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not necessary to prevent the acts or practices to which the rule relates.
VI. Other Matters Pursuant to the Congressional Review Act 5 U.S.C. 801 et seq., the Office of Information and Regulatory Affairs has designated this rule as not a major rule, as defined by 5 U.S.C. 8042.
VII. Final Rule Language List of Subjects in 16 CFR Part 323
Labeling, U.S. origin.
For the reasons stated in the preamble, the Federal Trade Commission adds part 323 to subchapter C of title 16 of the Code of Federal Regulations as follows:
PART 323MADE IN USA LABELING
Sec.
323.1 Definitions.
323.2 Prohibited acts.
323.3 Applicability to mail order advertising.
323.4 Enforcement.
323.5 Relation to Federal and State laws.
323.6 Exemptions.
Authority: 15 U.S.C. 45a.
323.1

Definitions.

As used in this part:
a The term Made in the United States means 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.
b The terms mail order catalog and mail order promotional material mean any materials, used in the direct sale or direct offering for sale of any product or service, that are disseminated in print or by electronic means, and that solicit the purchase of such product or service by mail, telephone, electronic mail, or some other method without examining the actual product purchased.
323.2

Prohibited acts.

In connection with promoting or offering for sale any good or service, in or affecting commerce as commerce is defined in section 4 of the Federal Trade Commission Act, 15 U.S.C. 44, it is an unfair or deceptive act or practice within the meaning of section 5a1 of the Federal Trade Commission Act, 15
U.S.C. 45a1, to label any product as Made in the United States unless the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and
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