[Federal Register Volume 60, Number 47 (Friday, March 10, 1995)]
[Notices]
[Pages 13158-13159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5876]



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FEDERAL TRADE COMMISSION


Publication of ``Made in the USA'' Provisions of the Violent 
Crime Control and Law Enforcement Act of 1994

AGENCY: Federal Trade Commission.

ACTION: Notice of provisions of statute.

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SUMMARY: On September 13, 1994, Congress enacted the Violent Crime 
Control and Law Enforcement Act of 1994 (``Crime Bill''). Section 
320933 of the Crime Bill states, inter alia, that ``Made in the 
U.S.A.'' or ``Made in America'' claims or their equivalent shall be 
consistent with decisions and orders of the Federal Trade Commission 
(``Commission''). Section 320933 further states that it ``shall be 
effective upon publication in the Federal Register of a Notice of the 
provisions of this section.'' This notice implements the latter 
requirement.

DATES: Section 320933 of the Crime Bill is effective on March 10, 1995.

FOR FURTHER INFORMATION CONTACT:
Robert Easton, Special Assistant, Division of Enforcement, Federal 
Trade Commission, Washington, DC 20580, telephone 202/326-3029.

SUPPLEMENTARY INFORMATION: Section 5 of the Federal Trade Commission 
Act (``FTC Act''), 15 U.S.C. 45, directs the Commission to prevent 
``deceptive acts and practices,'' including deceptive claims of 
domestic origin. Although goods manufactured in the United States 
generally are not required to have a label identifying domestic 
content, a manufacturer may choose to make an unqualified or a 
qualified domestic origin claim for its products.\1\ An example of an 
unqualified claim is that a product is ``Made in USA,'' while an 
example of a qualified claim is that a product is ``Made in USA of 
foreign components.'' The Commission reviews Made in USA claims 
principally under its section 5 authority to prohibit deceptive acts or 
practices.\2\

    \1\Some statutes require disclosure of domestic origin or 
domestic content for certain products. E.g., Textile Products 
Identification Act, 15 U.S.C. 70; Wool Products Labeling Act, 15 
U.S.C. 68 (both enforced by the Federal Trade Commission); American 
Automobile Labeling Act, 15 U.S.C. 1950 (enforced by the U.S. 
Department of Transportation.
    \2\The Commission will find deception ``if there is a 
representation, omission or practice that is likely to mislead the 
consumer acting reasonably in the circumstances, to the consumer's 
detriment.'' Letter dated October 14, 1983, from the Federal Trade 
Commission to the Honorable John D. Dingell, Chairman, Committee on 
Energy and Commerce, U.S. House of Representatives (``Deception 
Statement''), reprinted in Cliffdale Associates, Inc., 103 F.T.C. 
110, 176 (1984).
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    On September 13, 1994, Congress enacted the Crime Bill, P.L. 103-
322, 108 Stat. 2135. Section 320933 of the [[Page 13159]] Crime Bill 
(15 U.S.C. 45a) governs the use of certain Made in USA claims. Section 
320933 states, inter alia, that ``Made in the U.S.A.'' or ``Made in 
America'' claims or their equivalent shall be consistent with decisions 
and orders of the Federal Trade Commission. The section further states 
that the section ``shall be effective upon publication in the Federal 
Register of a Notice of the provisions of this section. The Commission 
shall publish such notice within six months after the enactment of this 
section.''
    The text of Section 320933 of the Crime Bill is as follows:

    To the extent that any person introduces, delivers for 
introduction, sells, advertises, or offers for sale in commerce a 
product with a ``Made in the U.S.A.'' or ``Made in America'' label, 
or the equivalent thereof, in order to represent that such product 
was in whole or substantial part of domestic origin, such label 
shall be consistent with decisions and orders of the Federal Trade 
Commission issued pursuant to section 5 of the Federal Trade 
Commission Act. This section only applies to such labels. Nothing in 
this section shall preclude the application of other provisions of 
law relating to labeling. The Commission may periodically consider 
an appropriate percentage of imported components which may be 
included in the product and still be reasonably consistent with such 
decisions and orders. Nothing in this section shall preclude use of 
such labels for products that contain imported components under the 
label when the label also discloses such information in a clear and 
conspicuous manner. The Commission shall administer this section 
pursuant to section 5 of the Federal Trade Commission Act and may 
from time to time issue rules pursuant to section 553 of Title 5, 
United States Code for such purpose. If a rule is issued, such 
violation shall be treated by the Commission as a violation of a 
rule under section 18 of the Federal Trade Commissions [sic] Act (15 
U.S.C. 57a) regarding unfair or deceptive acts or practices. This 
section shall be effective upon publication in the Federal Register 
of a Notice of the provisions of this section. The Commission shall 
publish such notice within six months after the enactment of this 
section.

    Section 320933 provides that Made in USA claims are to be 
consistent with section 5 of the FTC Act, 15 U.S.C. 45 (``unfair or 
deceptive acts or practices''), and that the Commission may reexamine 
the application of its legal standard to particular facts as 
circumstances warrant. This provision authorizes the Commission to 
issue rules with respect to certain Made in USA claims. The Commission 
has made no determination whether rulemaking would be appropriate. 
However, the comments the Commission has received in response to a 
proposed consent agreement in Hyde Athletic Industries, Inc.\3\ 
suggests that additional guidance may be appropriate in this area. 
Should the Commission so determine, further opportunity for public 
input will be considered.

    \3\File No. 922-3236 (accepted for public comment Sept. 20, 
1994, Commissioners Azcuenaga and Owen dissenting). In that mater, 
the Commission alleged that the company falsely implied that all, or 
virtually all, of the component parts of its product and all, or 
virtually all, of the labor used in assembling its product was 
domestic when, in fact, a substantial portion of the firm's product 
line was assembled overseas of foreign component parts, and a 
substantial portion of the products assembled in the United States 
was composed of foreign component parts. The proposed order provided 
that unqualified Made in USA claims will be permitted ``so long as 
all, or virtually all, of the component parts of the footwear are 
made in the United States and all, or virtually all, of the labor in 
assembling the footwear is performed in the United States.'' 59 FR 
48892, 48893 (1994). After reviewing the comments received, the 
Commission will issue a public notice of its disposition in Hyde. (A 
consent agreement that the Commission has accepted subject to final 
approval is placed on the public record for a 60-day comment period, 
after which the Commission decides whether to make the agreement 
final. See Rule 2.34 of the Commission's Rules of Practice, 16 CFR 
2.34).
    At the same time that it published its proposed consent 
agreement with Hyde, the Commission also issued a complaint against 
New Balance Athletic Shoe, Inc., Docket No. 9268 (Commissioner 
Azcuenaga dissenting). That matter is currently in litigation before 
an administrative law judge.
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    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 95-5876 Filed 3-9-95; 8:45 am]
BILLING CODE 6750-01-M