Manufacturer of Kwik Fix, Hammer Tite, and Krylex Glues Settles with FTC, Agrees to Drop Misleading ‘Made in USA’ Claims

Georgia-based specialty chemical company Chemence, Inc. will stop making misleading unqualified claims that its strong, fast-acting glues are made in the United States, under a settlement with the Federal Trade Commission.

Chemence also has agreed to pay a $220,000 judgment to resolve the lawsuit the FTC brought against the company in February 2016.

In its complaint against Chemence, the FTC alleged that the company deceived consumers by making “Made in USA” or “Proudly Made in USA” claims for its cyanoacrylate glue products such as Kwik Fix, Hammer Tite, and Krylex. While Chemence’s claims allegedly implied that the products were all, or virtually all, made in the United States, approximately 55 percent of the costs of the chemical inputs to Chemence’s glues are attributable to imported chemicals that are essential to the glues’ function, according to the FTC. The complaint also alleged that Chemence assisted others in deceiving consumers by distributing its Made-in-USA marketing materials to private-label sellers and third-party websites and storefronts.

The stipulated final order prohibits the company from making unqualified “Made in USA” claims for any product unless it can show that the product’s final assembly or processing – and all significant processing – take 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. The order permits Chemence to make qualified “Made in USA” claims as long as they include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, and/or processing. Chemence also is prohibited from providing others with the means to make deceptive Made-in-USA claims about its products.

Jos. A. Bank Submits FTZ Application

An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the Maryland Aviation Administration, on behalf of the Maryland Department of Transportation, grantee of FTZ 73, requesting subzone status for the facilities of Jos. A. Bank Manufacturing Company, located in Hampstead and Eldersburg, Maryland. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the FTZ Board (15 CFR part 400). It was formally docketed on October 13, 2016.

The proposed subzone would consist of the following sites: Site 1 (38.5 acres) 500 Hanover Pike, Hampstead; Site 2 (13.5 acres) 626 Hanover Pike, Hampstead; and, Site 3 (3.2 acres) 1332 Londontown Blvd., Eldersburg. The proposed subzone would be subject to the existing activation limit of FTZ 73. No authorization for production activity has been requested at this time.

Agathon Associates Files FTZ Application for Claremont Flock

On October 19, 2016, the FTZ Board published in the Federal Register (81 FR 72038) Foreign-Trade Zone (FTZ) 27—Boston, Massachusetts; Notification of Proposed Production Activity; Claremont Flock, a Division of Spectro Coating Corporation (Textile Flock); Leominster, Massachusetts.

Claremont Flock, a Division of Spectro Coating Corporation (Claremont Flock), submitted a notification of proposed production activity to the FTZ Board for its facility in Leominster, Massachusetts within Subzone 27N. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on October 13, 2016.

Claremont Flock already has authority to produce textile flock using acrylic and rayon tow within Subzone 27N. The current request would add polyester tow as a material/component to the scope of authority. Pursuant to 15 CFR 400.14(b), additional FTZ authority would be limited to the specific foreign-status material/component described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.

Production under FTZ procedures could exempt Claremont Flock from customs duty payments on polyester tow used in export production. On its domestic sales, Claremont Flock would be able to choose the duty rate during customs entry procedures that applies to textile flock (duty-free) for polyester tow (duty rate 7.5%). Customs duties also could possibly be deferred or reduced on foreign-status production equipment.

Public comment is invited from interested parties. The closing period for their receipt is November 28, 2016.

The application was filed on behalf of Claremont by Agathon Associates.

NOTE, that we are fully aware that there is domestic production of polyester fiber, including tow. Claremont does not make any broad claim that polyester fiber is not available from domestic sources. Claremont's Application relates solely to a narrow claim that certain polyester tow for use in producing textile flock is not available domestically. Other than Palmetto, which, exited this market in January of this year, U.S. producers of polyester tow have not sold it to the flock cutting industry for some years, rather it is used in the production of staple fiber for use by the yarn spinning industry. Approval of this Application would not, and ought not, be viewed as a precedent opening the way for FTZ procedures to be used in the case of other polyester fibers.

Colombia Rayon Fabric Short Supply Filed

The Committee for the Implementation of Textile Agreements ("CITA") is considering Commercial Availability Request for Certain 100% Rayon Twill Challis, as specified below.

Responses are due by 11:59 P.M. (EST), October 31, 2016.

SPECIFICATIONS: Certain 100% Rayon Twill Challis

HTSUS: 5516.12.0020; 5516.13.0000; 5516.14.0025; 5516.14.0030

Fabric Type: Twill Challis

Fiber Content: 100% Rayon

Yarn Size:

Weft 27-33 denier x Warp 27-33 denier / 97.2-118.8 warp ends x 61.2-74.8 weft filling yarns per square inch (English)

627- 767 warp ends x 394-483 weft filling yarns per square centimeter (metric)

*range represents a +/-10% tolerance.

Weave Type: Twill

Weight: 152 to 168 grams per square meter – this is the equivalent of +/- 5% tolerance of 160 grams per square meter used in due diligence

Width: 55 in to 56 in (English) / 139.7 to 142.24 centimeters (metric)

Coloration Process: Various (including bleaching, piece dyed, yarn dyed, and/or printed)

Finishing Process: Various

Ranges: Ranges in these specifications reflect a tolerance from the target figures of up to five % (equal to range of 152-168 grams per square meter) for fabric weight. Yarn size is a tolerance of ten % (equal to range of 627-767 warp ends x 394-483 weft filling yarns per square centimeter).

Rug Manufacturing Seeks Foreign-Trade Zone

According to a report on centralmaine.com, Flemish Master Weavers ("FMW") of Sanford, Maine, has filed an application to the Foreign-Trade Zone ("FTZ") Board in Washington for authorization to use FTZ procedures in their production of rugs of man-made fiber yarns.

If this story is correct (Agathon Associates could not independently verify it) it would be the company's second attempt at this proposal which could save them around $1 million annually. On March 31, 2016, they submitted a Notification Requesting Production Authority ("Notification"). A Notification is a short document answering four questions. In the case of Flemish Master Weavers, the Notification was two pages long. The Notification requested production under FTZ procedures which could exempt FMW from customs duty payments on foreign status materials used in export production. On its domestic sales, FMW would be able to choose the duty rate during customs entry procedures that applies to area rugs (free) for the polypropylene and polyester yarns (duty rates: 8.0% and 8.8%, respectively) sourced from abroad. Customs duties also could possibly be deferred or reduced on foreign status production equipment.

Authorization for production was opposed by National Spinning Co., Inc., the American Fiber Manufacturers Association, the National Council of Textile Organizations, and the United States Industrial Fabrics Institute. On July 29, 2016, the FTZ Board approved FMW's application, but with restrictions that eliminated most of the value of the authorization. With FTZ procedures as approved, FMW will avoid duty on the imported yarn, but only until the rugs made from the yarn enter the U.S. market. In other words, they got a brief deferral of the duty, plus avoidance of duty on rugs they export outside of the U.S.

In granting FMW limited authorization, the Board also informed FMW that have the option of re-filing, using the more extensive Application for Production Activity. It appears, from the news account, that they have opted to re-file, using that longer, 41-question, application.

To learn if your company can save money using FTZ procedures, contact David Trumbull at david@agathonassociates.com for an initial free consultation. In his FTZ work David works closely with Glenn Page of FTZ Solutions.

Introducing: Foreign Trade Zone Solutions

On Thursday, October 13, 2016, Glenn Page of FTZ Solutions, and David Trumbull of Agathon Associates, appeared as subject matter experts on behalf of Gino Marconi, Director of Ports and Harbors, Pease Development Authority (Foreign-Trade Zone #81) at the Fourteenth Annual Governor's Advanced Manufacturing and High Technology Summit, held in Concord, New Hampshire. Page and Trumbull conducted one-on-one discussions with New Hampshire manufacturing companies regarding the potential for cost savings using FTZ procedures for production, warehousing, and distribution activity. Recently the team assisted a textile manufacturing in Massachusetts to save $200,000 per year, and hire 20 new workers, using FTZ procedures.

Above Glenn Page of FTZ Solutions, and David Trumbull of Agathon Associates. Photo credit: Marilyn Page.

Edinburgh Woollen Mill in Court over 'Pure Cashmere' Mislabelling

Following a tip from the Cashmere and Camel Hair Manufacturers Institute, Scottish officials arranged for independent laboratory analysis of textile products sold at Edinburgh Woollen Mill and labeled as 100% cashmere. The laboratory analysis contradicted the labeling claim, and the business is now facing a court case in Scotland over mislabeling. Read more at www.theguardian.com.