Japan's Kubota hit with $2m penalty over false 'Made in USA' claims

WASHINGTON, Jan 27 (Reuters): The US Federal Trade Commission (FTC) on Friday said tractor maker Kubota North America Corp will pay a $2 million civil penalty for falsely labeling some of its replacement parts as being "Made in USA."

In addition to the penalty, Kubota will be prohibited from making deceptive claims, according to a court order filed by the US Justice Department on the FTC's behalf, it said.

"Today's settlement includes the largest civil penalty assessed for violating the Made in USA Labeling Rule," Samuel Levine, director of the Bureau of Consumer Protection, said in a statement.

According to the complaint, "Kubota has labeled thousands of replacement parts for its tractors and other agricultural equipment as Made In USA, even though they were made entirely overseas."

The company also moved manufacturing for some parts from the United States to other countries but did not update the products' labeling to reflect that change, the FTC said.

As part of the agreement, Kubota will be prohibited from making U.S.-origin claims for any product, unless it can show that the product's final assembly or processing takes place in the United States.

Kubota must also make a clear disclosure about the extend to which any product contains foreign parts, the FTC said.