During the last few decades, consumers in the United States have shown a significant interest in purchasing consumer products and packaging that appear to be beneficial—or at least not harmful—to the natural environment. In response to consumers' willingness to pay a premium for these products, manufacturers and others have increasingly touted the positive environmental attributes of their products in marketing materials, such as in advertising or on product labels. These environmental marketing claims may be self-declared by manufacturers or made by a government or third party through a certified "seal of approval" or "environmental label" awarded to products that meet certain environmental criteria. Some Members of Congress and commentators have argued that consumers may have difficulty verifying claims made about the environmental attributes of a particular product, and thus that environmental marketing messages have the potential to deceive consumers. According to these arguments, misleading claims may lead consumers to purchase products that lack the advertised environmental benefits or cause consumers to become indifferent to the claims. In addition, some commentators have argued that the prevalence of misleading claims in the marketplace could potentially discourage companies from competing to produce more environmentally beneficial products. This report examines the Federal Trade Commission's (FTC's) role in regulating environmental marketing claims under the Federal Trade Commission Act (FTC Act) and other federal laws. It begins with an overview of the FTC's enforcement powers under the FTC Act, including their potential extraterritorial application to unfair or deceptive claims made by foreign entities outside of the United States' territorial jurisdiction (e.g., labels on products that are imported into the United States). It then examines how the FTC has exercised its powers under the act and other laws in the environmental marketing context. The report concludes by considering legal issues potentially implicated by regulating environmental marketing claims, including questions involving the First Amendment, international trade law, and federal preemption of state law. This report does not examine the role that other federal agencies may play in regulating or monitoring the use of environmental marketing claims. It also does not consider the possible use of the Lanham Act to bring a private cause of action against an entity that makes a false or deceptive environmental marketing claim. Finally, it does not address "private industry self-regulation" of claims by the National Advertising Division (NAD) administered by the Council of Better Business Bureaus, which issues nonbinding decisions in alternative dispute resolution proceedings regarding advertising claims. The FTC derives its general consumer protection powers from Section 5 of the FTC Act. That section declares it unlawful for certain "persons, partnerships, or corporations" to engage in "unfair or deceptive acts or practices in or affecting commerce." The FTC Act's definition of "commerce" encompasses both domestic commerce among the states, U.S. territories, and the District of Columbia, as well as commerce with foreign nations. Under the FTC Act, the commission has authority to promulgate or issue trade regulation rules, interpretive rules, and policy statements, and to investigate certain trade practices. The FTC may enforce the act using administrative or judicial processes. There is no private right of action in the FTC Act. The commission's powers under the FTC Act are summarized below. Although a rule addressing a particular unfair or deceptive act or practice does not have to exist in order for the FTC to bring an enforcement action under Section 5 of the FTC Act, Section 18 of the act authorizes the commission to promulgate trade regulation rules, interpretive rules, and policy statements addressing unfair or deceptive acts or practices in or affecting commerce. When the commission promulgates a trade regulation rule under the FTC Act, the agency must follow the procedures outlined in the FTC Act and the Administrative Procedure Act (APA) (5 U.S.C. §553). In addition, promulgation (and in certain cases, amendment) of trade regulation rules requires the commission to publish a regulatory analysis. Trade regulation rules are subject to judicial review, and entities may petition the FTC for exemptions from them. In addition to granting the FTC general rulemaking powers, the FTC Act authorizes the commission to investigate certain trade practices, including foreign practices. The FTC may require persons to submit reports or answers to questions; make the submitted information publicly available (except for confidential or privileged information); and share the obtained information with federal, state, and foreign law enforcement agencies under certain conditions. This section discusses the general administrative and judicial processes that the FTC may use to enforce the FTC Act. The commission may bring an administrative complaint against an entity subject to its jurisdiction when the agency has "reason to believe" that the entity has violated the act. After notice and an opportunity for a hearing, the commission may issue an order instructing the entity to cease and desist from acts or practices that violate the act. If the entity subsequently violates an order that is in effect after it has become final, the United States may seek civil penalties (generally, up to $16,000 per violation), injunctions, and other equitable relief in federal district court. Often, however, respondents opt to settle with the FTC, and the parties enter into an agreement containing a consent order in which the respondent does not admit liability; waives judicial review of the order; and agrees not to engage in the allegedly unfair or deceptive acts or practices in the future. Depending on the circumstances, the FTC Act may provide one or more avenues for the FTC or Attorney General to seek judicial relief when an entity subject to FTC jurisdiction has violated, or is about to violate, the FTC Act. As described below, potential forms of relief include injunctive relief, civil penalties, and consumer redress (e.g., refunds). However, the FTC and defendants often settle these cases prior to trial. Section 13(b) of the FTC Act authorizes the commission to seek preliminary and permanent prohibitive injunctive relief in the proper federal district court in cases in which the commission has "reason to believe" that an entity subject to its jurisdiction is violating or is about to violate a provision of law enforced by the FTC, provided that such relief would be in the public interest. Several federal courts of appeals have held that Section 13(b)'s authorization of injunctive relief allows a federal court to exercise the full scope of its inherent equitable powers, permitting the court to order other equitable relief such as monetary consumer redress. The FTC may also bring a complaint in federal district court seeking imposition of a civil penalty (generally, up to $16,000 per violation) against an entity that knowingly violates a rule (not an interpretive rule) under the FTC Act respecting unfair or deceptive acts or practices. Moreover, the commission may bring an action seeking a civil penalty against an entity subject to FTC jurisdiction under the FTC Act that engages in an unfair or deceptive act or practice that was the subject of a prior final cease and desist order (not a consent order), regardless of whether that entity was originally subject to the order and provided that the entity had actual knowledge that its conduct was unlawful under Section 5(a)(1) of the FTC Act. Under Section 19 of the FTC Act, the commission may seek redress for consumers and others in state or federal court when an entity subject to its jurisdiction has violated (1) a trade regulation rule or (2) a final cease and desist order that applies to the entity, provided that a reasonable person would have known that the entity's violation was "dishonest or fraudulent." Available relief under this section includes "rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and public notification" of the rule violation or unfair or deceptive act or practice, but Section 19(b) does not authorize "the imposition of any exemplary or punitive damages." The FTC frequently receives complaints from consumers about cross-border fraud, including allegations that a foreign business located outside of U.S. territory has engaged in unfair or deceptive acts or practices causing injury to consumers in the United States. It is possible that a foreign entity in a foreign country could make false or misleading environmental marketing claims that injure U.S. consumers. For example, a foreign manufacturer might affix deceptive labels to its products prior to their import into the United States. Partly in order to address cross-border fraud, Congress amended the FTC Act in 2006 to expand and clarify further the FTC's international enforcement authorities, allowing greater cooperation between the agency and foreign countries and specifically allowing extraterritorial application of the FTC Act by U.S. courts to certain conduct by foreign entities located in foreign countries. However, despite these amendments, the FTC may face several procedural hurdles in litigating cases against a foreign defendant who lacks a legal presence in the United States, including the challenges involved in serving process on foreign defendants in a foreign country; overcoming defendants' motions to dismiss for lack of personal jurisdiction or forum non conveniens ; engaging in discovery abroad; and obtaining recognition and enforcement of U.S. judgments by foreign courts. In addition to the commission's general investigative powers described above, the FTC may also assist certain foreign law enforcement agencies with investigations and enforcement actions involving potential violations of foreign consumer protection laws upon written request of the foreign agencies. The FTC may, with State Department approval, negotiate and enter into international agreements with foreign law enforcement agencies in certain circumstances for the purposes of receiving information and enforcement assistance from the agencies. Provisions of the FTC Act state that commission attorneys may assist the Attorney General in foreign litigation in which the FTC has an interest—and that the FTC may use appropriated funds to reimburse the Attorney General for retaining foreign counsel—with approval of the Attorney General. Complaints about cross-border fraud committed by foreign companies in foreign countries that injures U.S. consumers in the United States have raised questions about the extraterritorial application of the FTC Act to this conduct by U.S. courts.