Consider those three little words that many people long to hear. “I love you?” No. This is the Business Blog and that would be weird. We’re talking about “Made in USA.” A proposed FTC settlement – including a financial judgment – with a marketer of promotional products reminds companies of the need to substantiate their Made in USA representations.
Gennex Media LLC and owner Akil Kurji sell branded wristbands, lanyards, temporary tattoos, and other gizmos and gadgets often distributed at trade shows or given to customers or employees. Gennex – which also does business as Brandnex, BrandStrong, PMGOA, and Promotional Manufacturing Group of America – prominently promoted its promotional swag on websites, in social media, and on YouTube as “Made in USA,” “USA MADE,” and “Manufactured Right Here in America!” But according to the FTC, in numerous instances, the products were wholly imported from China.
Among other things, the proposed settlement addresses both unqualified claims (claims made with no limitations) and qualified claims (claims that include explanatory information). In the future, Gennex and Kurji are prohibited from making unqualified U.S.-origin claims unless they have proof to establish that the product’s final assembly or processing – and all significant processing – takes place in the United States, and that all or virtually all ingredients or components are made and sourced in the U.S.
For qualified claims, they must include a clear disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing.
If they want to say a product is assembled in the United States, they must ensure that it is last substantially transformed in the U.S., that its principal assembly takes place in the U.S., and that United States assembly operations are substantial.
The order includes a financial remedy of $146,249. Once the proposed settlement appears in the Federal Register, the FTC will accept public comments for 30 days.
The FTC’s Enforcement Policy Statement on U.S. Origin Claims offers guidance on making Made in USA claims. Visit the Business Center’s Made in USA page for more resources.