California amends 'Made in the USA' law

11 Sep '15

3 min read

California has amended its “Made in the USA. law” and taken a step toward the mainstream. California Governor Jerry Brown has signed into law Senate Bill 633 on September 1, amending a portion of California's Business & Professions Code known as the “Made in the USA.” Law, The National Law Review has reported

This amendment marks a break for California manufacturers and marketers, as it relaxes California's standard for merchandise labeled as “Made in the USA.” and aligns the state's requirement more closely with the federal standard, widely followed by other states.

The Federal Trade Commission (FTC) standard for products labeled and marketed as “Made in the USA.” requires that “all or virtually all” of a product be made in the US, examining the foreign content of a product as a whole. According to the FTC's guidelines, “all or virtually all” means that “all significant parts and processing that go into the product must be of U.S. origin,” or “the product should contain no — or negligible — foreign content.”

Until now, California has implemented a stricter standard, prohibiting the use of the phrase “Made in the USA.” when any merchandise or “any article, unit, or part thereof”—no matter how small—has been “made, manufactured, or produced outside of the US.” And as is often the case when different standards are imposed on goods that are distributed nationally, that stricter California standard has exposed many unsuspecting manufacturers to litigation, some of which remains pending.

California's new amendment, Senate Bill 633, now recognizes that merchandise made, manufactured, or produced in the US can be labeled “Made in the USA.” even if it includes one or more articles, units, or parts from outside of the US. In particular, merchandise can be labeled “Made in the USA.” “if all of the articles, units, or parts of the merchandise obtained from outside the US constitute not more than 5 per cent of the final wholesale value of the manufactured product.” Additionally, merchandise can be labeled “Made in the USA.” “if the manufacturer makes a showing that it cannot produce or obtain a certain article, unit, or part” within the US for reasons other than cost and that the article, unit, or part does not constitute more than ten per cent of “the final wholesale value of the manufactured product.”

But manufacturers will still need to go through the exercise of determining if their products meet the new California standard, and it's not entirely clear how this new standard will affect pending litigation that was filed under the old standard. But going forward, this recent amendment should help reduce the number of instances where manufacturers have to create one set of labeling materials for California and another set for the rest of the country. (SH)

Fibre2Fashion News Desk – India

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