August 2020 Regulatory Update

The FTC has been enforcing the MUSA policy pursuant to the Enforcement Policy Statement on U.S. Origin Claims (“Policy Statement”). This policy requires that a marketer making an unqualified claim for its product should, at the time of the representation, have a reasonable basis for asserting that “all or virtually all” of the product is made in the United States.

The FTC is now proposing a MUSA Labeling Rule to prevent unfair or deceptive acts or practices relating to MUSA labeling. The proposed rule tracks the FTC’s previous MUSA Decisions and Orders by prohibiting marketers from including unqualified MUSA claims on labels unless:

1. Final assembly or processing of the product occurs in the United States
2. All significant processing that goes into the product occurs in the United States, and
3. All or virtually all ingredients or components of the product are made and sourced in the United States. The proposed rule also covers labels making unqualified MUSA claims appearing in mail order catalogs or mail order advertising.

The FTC proposes the Made in USA Labeling Rule for two primary reasons: to strengthen its enforcement program and make it easier for businesses to understand and comply with the law. Specifically, by codifying the existing standards applicable to MUSA claims in a rule as authorized by Congress, the FTC will be able to provide more certainty to marketers about the standard for making unqualified claims on product labels. In addition, enactment of the NPRM will enhance deterrence by authorizing civil penalties against those making unlawful MUSA claims on product labels. The MUSA rule would be listed under 16 CFR Part 323.

The EPA first proposed a SNUR for LCPFAC and perfluoroalkyl sulfonate chemical substances in 2015. On March 3, 2020, the EPA issued a proposed supplemental SNUR for LCPFAC chemical substances that would invalidate the exemption for persons who import a subset of LCPFAC chemical substances as part of surface coatings on articles under 85 Fed. Reg. 12479.

The final SNUR will require persons to notify the EPA at least 90 days before commencing:

• The manufacturing (including importing) or processing of a subset of LCPFAC chemical substances for any use that was not ongoing after December 31, 2015;
• The manufacturing (including importing) or processing of all other LCPFAC chemical substances for which there were no ongoing uses as of January 21, 2015 (the date of the original proposed SNUR);
• The import of a subset of LCPFAC chemicals as part of a surface coating on articles; and
• The import of perfluoroalkyl sulfonate chemical substances as a part of carpets.

The final SNUR will preclude the commencement of such manufacturing and processing until the EPA has conducted a review of the notice, made an appropriate determination on the notice, and taken such actions as required in association with that determination.

Manufacturers or distributors of products that contain intentionally added amounts of PFOS or its salts, must report to the state’s Department of Environmental Protection (DEP) the amount and function of PFOS or its salts in reported products, among other information. This requirement applies to the products listed below.

• Childcare articles;
• Clothing;
• Footwear;
• Sleepwear;
• Toys;
• Cookware, tableware, reusable food and beverage containers;
• Cosmetics and personal care products;
• Craft supplies;
• Electronic devices; and
• Household furniture and furnishings.

Products in the categories below are exempt:

• Used products;
• Food and beverage packaging;
• Transportation (motor vehicles or watercraft or their component parts).

The deadline for reporting children’s products containing PFOS or its salts will be January 24, 2021 (no later than 180 days after the effective date), or 30 days after the sale commences if the products start to be sold after that date. A regulated entity may request a waiver of the reporting requirements for reasons set forth in Department Rule 06-096 C.M.R. ch. 880 §5(C).

Comparing to previous version, there is no technical change, but there are a few editorial changes. Below is a comparison table of both versions of standard.

The definitions in the new Order are as follows:

• Toys are exclusively or partially designed or intended to be used by children aged 0-3 years (0-36 months) during play.
• Toddler articles are any product intended for or normally expected to be put in the mouth of children aged 0-3 years (0-36 months), including in particular dummy pacifiers, bibs, jewelry and bathing equipment, etc.
• Phthalates are esters of o-phthalic acid.

The Executive Order does not cover phthalates that are restricted by the following regulations:

• The Executive Order on safety requirements for toy products' Annex II on special safety requirements.
• Entry 51 and 52 in Annex XVII of EU REACH Regulation (EC) No 1907/2006.

The Executive Order does not cover articles for young children, which are intended to come into contact with food.

*Other Hazards include Burn Hazard, Chemical Hazard, Damage to eyesight Hazard, Drowning Hazard, Entrapment Hazard, Fall Hazard,Health Risk Hazard with a frequency of less than 7.

^Other Categories include Cosmetics, Eyewear, Food Contact Material, Home Electrical Appliances (Hair Dryer, Iron, etc.), Personal Protective Equipment, Footwear, Lighting Equipment, Jewellery with a frequency of less than 4.

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