Kubota North America Group has agreed to pay a $2 million civil penalty to settle a complaint in the U.S. District Court for the Northern District of Texas. That complaint alleged Kubota violated the FTC Act and the Made in the USA Rule by falsely marketing foreign manufactured replacement parts as “Made in the USA.”

According to the FTC, Kubota has labeled thousands of imported replacement parts as “Made in the USA” since 2021. While the company moved multiple manufacturing operations outside of the country, it continued to label those items as American-made.

According to the FTC’s Made in American Labeling Rule, products cannot be labeled “Made in the USA” unless their final assembly or processing occurs in the United States. All significant processing that goes into a product must also occur in the U.S. Additionally, “all or virtually all” ingredients or components of a product must be made and sourced in the U.S.

Per the settlement agreement, Kubota is prohibited from making country-of-origin claims about any of its products unless it can prove they were assembled or processed in the United States. It is also prohibited from making any other unsubstantiated claims about its products.

“Today’s settlement includes the largest civil penalty assessed for violating the Made in USA Labeling Rule,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, says. “The FTC will continue cracking down on deceptive Made in USA claims that cheat consumers and honest businesses.”

Kubota officials say the company has cooperated fully with government officials throughout the investigation. In a statement following the settlement agreement, the company said it is “voluntarily addressing the FTC’s concerns” and is committed to complying with the laws and FTC regulations. The company adds that it has worked with its U.S. subsidiaries to implement new policies and process improvements, including regular reviews of its supplier information regarding the accuracy of labels.

As for the parts that were sold since 2021, Kubota says they were produced by approved suppliers. The company says it continues to stand behind those products “Kubota Genuine Parts.”

“Kubota regrets that this matter has occurred. But we recognize that our company, our process, and our business have been improved by sincerely learning from this matter,” the company said at the conclusion of its public statement. “Kubota will continue to take steps to improve and enhance our commitment to compliance.”