Page 31 - September2019_BarJournal

BUSINESS BANKING & CORPORATE COUNSEL FEATURE

manufacturing businesses, in utilizing means that the product must be substantially de minimis finishing process) outside
“Made in USA” designation as a patriotic transformed in the U.S. A substantial the U.S., the “all or virtually all” standard
marketing tool for purpose of driving sales. transformation is a manufacturing or other is not met. For example, if a product is
However, in today’s highly interdependent process that results in a new and different manufactured primarily in the U.S., but
global economy, companies should make article of commerce, having a new name, then sent to Canada or Mexico for final
sure they understand laws regulating U.S. character, and use that is different from assembly, then any U.S. origin claim should
origin claims before waving the American flag. that which existed before the processing. be qualified to disclose the assembly that
The Federal Trade Commission (FTC) Even though a product is last substantially took place outside the U.S.
regulates product representations that transformed in the U.S., if the product is After the FTC is satisfied with the first
may be seen as deceptive or unfair to U.S. thereafter assembled or processed (beyond factor, it will then examine the portion
consumers, including the use of U.S. origin
claims. Claims that a product is “Made in
USA” (an “unqualified claim”) or “Partially
Made in USA” (a “qualified claim”) are
subject to the Federal Trade Commission OBTAINING AMERICAN CITIZENSHIP
Act (15 U.S.C. §45) and various state
consumer protection laws.

Unqualified “Made in USA” Claim
An unqualified “Made in USA” claim can OPTION
be either express or implied. Examples of
express claims include “Made in USA” or
“Our products are American-made.” In
identifying the implied claims, the FTC
focuses on the overall impression of the
advertising, label and promotional materials.
For example, U.S. symbols or geographic
references, such as U.S. flags, outlines of U.S.
maps, may convey a claim of U.S. origin.
To make an unqualified “Made in USA”
claim, the product must be “all or virtually
all” made in the U.S.; and the marketer shall
have “competent and reliable evidence” to
substantiate such claim. OPTION

“All or Virtually All” Standard
“All or virtually all” means that all significant
parts and processing that go into the product
must be of U.S. origin. That is, the product
should contain no — or negligible — foreign
content. The FTC has articulated its “all or
virtually all” standard that “a product can be
labeled as Made in USA if it contains only
de minimis, or negligible amount of foreign
content.” However, this standard is unclear
and ambiguous. As the FTC stated, there is For complex immigration matters made simple,
no bright line to establish when a product this is where you want to
is “all or virtually all” made in the U.S. and
because of the highly complex nature of
factual scenario in this area of law, issues
will be resolved on a case-by-case basis. But
there are certain factors the FTC will look to
in making its determination.
The first factor is that the product’s final
significant manufacturing or processing BrownImmLaw.com
must be done in the U.S. This requirement

SEPTEMBER 2019 CLEVELAND METROPOLITAN BAR JOURNAL | 31