Thursday, February 18, 2021

FTC Approves Final Order Stopping the Manufacturer of Superglues, and Company President, from Marketing Products with Misleading ‘Made in USA’ Claims

Following a public comment period, the Federal Trade Commission has approved a final consent order settling charges that glue maker Chemence, Inc., and its company president, James Cooke, supplied pre-labeled and pre-packaged glues with deceptive “Made in USA” claims to its trade customers for use in marketing the strong, fast-acting glues under retailer brand names. As part of the settlement Chemence and Cooke are required to pay $1.2 million to the FTC, the highest monetary judgment ever for a Made in USA case.

First announced in December 2020, the FTC’s complaint alleges that Chemence and Cooke supplied glues in packages labeled with deceptive, unqualified “Made in USA” claims.

Under the terms of the final order, Chemence and Cooke are prohibited from making unqualified U.S.-origin claims for any product, unless they can show 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 of the product are made and sourced in the United States. Under the order, any qualified Made in USA claims must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing. Finally, to claim that a product is assembled in the United States, Chemence and Cooke must ensure that it is last substantially transformed in the United States, its principal assembly takes place in the United States, and U.S. assembly operations are substantial. The order also prohibits Chemence and Cooke from making any country-of-origin claim about a product or service unless the claim is not misleading and they have a reasonable basis that substantiates their claim.

The order also contains provisions requiring Chemence and Cooke to (1) notify certain third-party trade customers of the order and (2) provide compliance reports.

The Commission has an Enforcement Policy Statement on U.S. Origin Claims and other business guidance on how companies can comply with the Made in the USA standard. The FTC’s Made in USA page features cases, instructive closing letters, and the brochure Complying with the Made in USA Standard, which answers many of the questions companies ask.

Complying with the FTC rules can be complex and some manufacturers run afoul of the rules through ignorance, not the intent to deceive. I am pleased to announce that my business, Agathon Associates, offers a "Made in U.S.A. Certification" service. Manufacturers desiring to make a Made in U.S.A. claim can have me evaluate their manufacturing process and certify that under the FTC rules they can honestly say "Proudly Made in the U.S.A."

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