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BUSINESS BANKING & CORPORATE COUNSEL FEATURE

component is 100% U.S. made. Rather, the Qualified “Made in USA” Claim Conclusion
marketer has an affirmative duty to conduct If one of the marketer’s products does not The increasingly globalized business has
reasonable due diligence investigation, so meet the “all or virtually all” standard but the made it more difficult for U.S. companies
that the marketer will have “competent and product contains a significant U.S. content to meet the “all or virtually all” standard.
reliable evidence” to make an unqualified or U.S. processing, the marketer can make a But failure to comply with laws regulating
“Made in USA” claim. The marketer shall qualified claim to highlight the Made in USA country of origins claim may result in
maintain accurate documentation that will advantage without deceiving consumers. For fines, regulation and litigation costs
substantiate its country of origin claim. example, the marketer may make claims like and damage of company’s good will, etc.
The marketer and/or its suppliers should “80% U.S. content” or “Made in USA of U.S. With products’ contents and components
look back far enough in the manufacturing and imported parts.” costs changing constantly, companies
process to be reasonably sure that any should regularly review their products’
significant foreign content has been “Assembled in USA” Claim information to make sure the products are
included in their assessment of foreign If a product contains a large portion of foreign really “Made in USA.”
costs. Foreign content incorporated early components, then it is not eligible to make
in the manufacturing process will be less either the unqualified or qualified “Made in
significant than content that is a direct USA” claim. But the marketer may make an Yao Liu is an attorney with
part of the finished product or components “Assembled in USA” claim if the product’s Cavitch Familo & Durkin Co.,
produced by the immediate supplier. As principal assembly takes place in the U.S. A L.P.A. As a bi-lingual and bi-
the FTC noted, “even where a raw material product that includes foreign components cultural lawyer, trained in both
is nonindigenous to the United States, may be called “Assembled in USA” without the United States and China,
if that imported material constitutes the qualification when its principal assembly he routinely assists clients with unique
whole or essence of the finished products, takes place in the U.S. and the assembly is issues that arise in cross-border transactions.
it would likely mislead consumers to label substantial. For the assembly claim to be valid, He has been a CMBA member since 2014.
the final product as an unqualified Made the product’s last substantial transformation He can be reached at (216) 621-7860 or
in USA claim.” should have occurred in the U.S. yliu@cavitch.com.

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Ulmer’s Corporate Restructuring and Creditors’ Rights Practice provides restructuring-
related services to borrowers/debtors, creditors, and other parties in complex
reorganizations and workouts, bankruptcy proceedings, foreclosures, receiverships,
and other proceedings involving financially distressed entities.

Richard Hardy Michael Tucker Reuel Ash Todd Atkinson Manju Gupta
rhardy@ulmer.com mtucker@ulmer.com rash@ulmer.com tatkinson@ulmer.com mgupta@ulmer.com
216.583.7108 216.583.7120 513.698.5118 216.583.7162 216.583.7066

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