FTC Brings First Civil Penalty Action Under New “Made in USA” Rule

The FTC entered right into a consent order with Lithionics Battery LLC and its Common Supervisor, settling allegations the corporate misrepresented its lithium ion cells are made in america. That is the primary case the FTC has introduced underneath its new civil penalty authority supplied in the Made in USA Labeling Rule, which we wrote about final summer time.

In accordance with the FTC, Lithionics expressly claimed – in movies posted to social media and on the corporate’s web site and in catalogs – that their merchandise had been “Made in USA” and “Proudly Designed and Built in USA,” displayed alongside American flag imagery, to convey Made in USA advertising messages for his or her battery, battery module, and battery administration system merchandise. The FTC alleged that, in truth, the merchandise had been made in China.

The FTC’s order imposes a $105,319.56 civil penalty, which, because the FTC’s press launch signifies, is the same as 3 times Lithionics’ income attributable to the claimed criminality. As well as, the defendants are prohibited from making unqualified US-origin claims for his or her merchandise until all vital processing and the ultimate meeting or processing takes place in america, and all or just about all parts are additionally made and sourced domestically. Nor could the defendants make certified Made in USA claims until they embrace clear disclosures concerning the extent to which the merchandise comprise overseas parts or concerned overseas processing. And if the defendants convey {that a} product is assembled in the US, they have to guarantee it was final considerably remodeled right here, principal meeting befell right here, and that US meeting operations are substantial.

In all, it seems the FTC is poised to implement its Made in USA Labeling Rule past mere “labeling” and with vital penalties hooked up.

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