Federal Trade Commission Finalizes Action Against “Made in USA” Offender Who Ripped “Made in China” Tags Out of Apparel, Replacing Them with “Made in USA” Tags

The Federal Trade Commission has finalized an order against apparel company Lions Not Sheep Products, LLC, and its owner Sean Whalen for falsely claiming that its imported apparel is Made in USA. Lions Not Sheep Products, LLC, and Whalen will pay $211,335.

First announced in May 2022, the FTC’s complaint alleged that the company added phony Made in USA labels to clothing imported from China and other countries. In addition to the monetary judgment, the FTC’s order requires Whalen and Utah-based Lions Not Sheep to:

• Stop making bogus Made in USA claims, and
• Come clean about foreign production.

Under the order, Whalen and Lions Not Sheep must stop claiming that products are made in the United States unless they can show that the product’s final assembly or processing—and all significant processing—takes place here and that all or virtually all ingredients or components of the product are made and sourced here.

Also 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 or components, or processing. Finally, to claim that a product is assembled in the United States, Whalen and Lions Not Sheep 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 FTC’s Enforcement Policy Statement on U.S. Origin Claims provides further guidance on making non-deceptive “Made in USA” claims. The agency’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. Threading Your Way Through the Labeling Requirements Under the Textile and Wool Acts provides further information on labeling textile products. The FTC’s Made in USA Labeling Rule went into effect on August 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.

The Commission voted 5-0 to approve the final order in this case.

https://www.ftc.gov/news-events/news/press-releases/2022/07/federal-trade-commission-finalizes-action-against-made-usa-offender-who-ripped-made-china-tags-out