#cool faq

You have created a new product, with the country of origin now where you are, if you substantially transformed the item. “Substantial transformation means that the good underwent a fundamental change (normally as a result of processing or manufacturing in the country claiming origin) in form, appearance, nature, or character, which adds to its value an amount or percentage that is significant in comparison to the value which the good (or its components or materials) had when exported from the country in which it was first made or grown.”

So if you take fabric, thread, a zipper and buttons and make an item of clothing, you have substantially transformed those supplies into a new product.

Yes, it will apply to any products you sell to consumers in the US.

"What are the marketplaces’ responsibility in all this?"

Marketplaces are required to notify sellers of the new country of origin labeling requirements. They are also required to provide a way to list that information in the product’s description.

"How will this be enforced?"

Anyone who violates this rule is subject to Federal Trade Commission’s regulations about unfair and deceptive business practices. But this is a civil violation, not criminal. The process can involve a hearing or interviews, or even formal subpoenas for information from the company. The FTC then brings the complaint to a judge, who either issues a cease and desist order or dismisses the complaint. Only if the company violates a cease and desist order are they liable to penalties.The penalty is up to $10,000 per violation. FTC cases tend to result in financial penalties paid back to consumers. The FTC can also forward a case on to law enforcement agencies if they believe a crime has been committed. Source 1, Source 2

Read the full analysis and FAQ here.

If you are creating a new product from those materials then no. You have created a new product and the country of origin is where you are. You do not need to provide country of origin information for all of the components used. If part of your handmade product has a clear “Made in ______” label of its own, for example a t-shirt you dyed, you could provide that information to customers if you want for full transparency, but it is not required by this bill. It would just be so that customers wouldn’t get confused upon seeing that tag.

Read the full analysis and FAQ here.

The COOL Online Act has an exception for small sellers. If you make less than $20,000 revenue and sell less than 200 items in a year for each marketplace you sell on, this bill would not apply to you if it becomes law.

The each marketplace part of that means each place you sell would count towards its own total. So if you sell 150 items/$15,000 on Etsy and 75 items/$4000 on Facebook marketplace and 10 items/$2000 on Ebay, you would still be exempt as a small seller because your total at one marketplace never crossed the threshold.

If you are a handmade seller, then you are producing the new products and the country of origin would be where you live. Some countries have specific laws about labeling products as “Made in your country”, so please check the applicable laws for the best way to phrase your country of origin labeling. If you can’t find anything else more applicable, we recommend “Country of origin for US import law _______” as something to cover you for the COOL Online Act if it passes without going against any labeling laws in your country. If you are a craft supply seller, this would be the country the item was manufactured in, so check the “Made in _____” labeling on the product and list that. If you are a vintage seller this bill does not apply to you.

It should be listed on the product or product packaging as a “Made in _____” label put on by the manufacturer. As long as you provide this information clearly in a listing, you are good to go. The limitations of liability in the bill means that you are only responsible for providing the information given to you by the manufacturer, and not liable if the manufacturer’s listing was wrong or false.

For a seller that creates their products (a handmade seller), the country the seller made it in would be the country of origin.