[Federal Register Volume 61, Number 248 (Tuesday, December 24, 1996)]
[Proposed Rules]
[Pages 67739-67748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32260]
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FEDERAL TRADE COMMISSION
16 CFR Part 300
Rules and Regulations Under the Wool Products Labeling Act
AGENCY: Federal Trade Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Trade Commission (Commission or FTC) has completed
its regulatory review of the Rules and Regulations under the Wool
Products Labeling Act (Wool Rules). Pursuant to that review the
Commission concludes that the Wool Rules continue to be valuable to
both consumers and firms. The regulatory review comments suggested
various substantive amendments to the Wool Rules. The Commission has
considered these proposals and other proposals that it believes merit
further inquiry. The Commission seeks comment on whether it should
amend the Wool Rules to: Allow the listing of generic fiber names for
fibers that have a functional significance and are present in the
amount of less than 5% of the total fiber weight of a wool product,
without requiring disclosure of the functional significance of the
fiber, as presently required by Wool Rule 3(b); eliminate the
requirement of Wool Rule 10(a) that the front side of a cloth label,
which is sewn to the product so that both sides of the label are
readily accessible to the prospective purchaser, bear the wording
``Fiber Content on Reverse Side'' when the fiber content disclosure is
listed on the reverse side of the label; allow for a system of shared
information for manufacturer, importer, or other marketer
identification among the North American Free Trade Agreement (NAFTA)
countries; add a provision to Wool Rule 4 specifying that a Commission
registered identification number (RN) will be subject to cancellation
if, after a change in the material information contained on the RN
application, a new application that reflects current business
information is not promptly submitted; allow the use of abbreviations
for generic fiber names; and allow the use of abbreviations and symbols
in country of origin labeling. The Commission also seeks comment on the
possible need to expand the fiber content disclosure requirement in
Wool Rule 19 to include specialty fibers other than the hair or fleece
of the angora or cashmere goat.
DATES: Written comments will be accepted until January 22, 1997.
ADDRESSES: Comments should be submitted to: Office of the Secretary,
Federal Trade Commission, Room H-159, Sixth Street and Pennsylvania
Avenue, NW, Washington, DC 20580. Submissions should be identified as
``Rules and Regulations under the Wool Act, 16 CFR Part 300--Comment.''
If possible, submit comments both in writing and on a personal computer
diskette in Word Perfect or other word processing format (to assist in
processing, please identify the format and version used). Written
comments should be submitted, when feasible and not burdensome, in five
copies.
FOR FURTHER INFORMATION CONTACT: Bret S. Smart, Program Advisor, Los
Angeles Regional Office, Federal Trade Commission, 11000 Wilshire
Blvd., Suite 13209, Los Angeles, CA 90024, (310) 235-4040 or Edwin
Rodriguez, Attorney, Federal Trade Commission, Sixth Street and
Pennsylvania Avenue, NW, Washington, DC 20580, (202) 326-3147.
SUPPLEMENTARY INFORMATION:
I. Background Information
The Wool Products Labeling Act of 1939 (Wool Act), 15 U.S.C. 68,
requires marketers of covered wool products to mark each product with
(1) the generic names and percentages by weight of the constituent
fibers present in the product; (2) the name under which the
manufacturer or other responsible company does business, or in lieu
thereof, the RN issued to the company by the Commission; and (3) the
name of the country where the product was processed or manufactured.
The Wool Act also contains advertising and recordkeeping provisions.
Pursuant to Section 6(a) of the Act, 15 U.S.C. 68d, the Commission has
issued implementing regulations, the Wool Rules, which are found at 16
CFR Part 300.
As part of the Commission's ongoing regulatory review of all its
rules, regulations, and guides, on May 6, 1994, the Commission
published a Federal Register notice (FRN), 59 FR 23645, seeking public
comment on the Wool Rules. That same day a similar FRN was published,
59 FR 23646, seeking public comment on the Textile Rules, which are
required by the Textile Fiber Products Identification Act.1 Though
not identical, the Wool Rules and the
[[Page 67740]]
Textile Rules are closely related. Generally, the former covers
products comprised in whole or in part of wool, while the latter covers
products containing no wool at all. The FRNs solicited comments about
the overall costs and benefits of the Wool Rules and the Textile Rules,
as well as their regulatory and economic impact. The FRNs also sought
comment on what changes in these Rules would increase their benefits to
purchasers and how those changes would affect the costs the Rules
impose on firms subject to their requirements. The deadline for
submission of comments was extended twice, on July 7, 1994 and
September 12, 1994. The final deadline for comments was October 15,
1994.
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\1\ 15 U.S.C. 70 et seq. The Rules and Regulations under the
Textile Fiber Products Identification Act are found at 16 CFR Part
303. A Notice of Proposed Rulemaking seeking comment on proposed
changes to the Textiles Rules was published earlier this year, 61 FR
5340 (February 12, 1996). The comment period closed on May 13, 1996,
and Commission staff members are currently analyzing the
submissions. Most of the proposals discussed in this Notice with
regard to the Wool Rules parallel similar proposals advanced with
regard to the Textile Rules.
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II. Regulatory Review Questions and Comments
A. Introduction
The Commission received twenty-eight comments in response to the
Textile Rules FRN and twelve comments in response to the Wool Rules
FRN. Seven of the twelve Wool Rules comments were merely copies of
correspondence submitted in response to the Textile Rules FRN. Because
of the many points in common between the Textile Rules and the Wool
Rules provisions, Textile Rules submissions that contain
recommendations or comments relevant to both sets of Rules will be
considered as responses to the Wool Rules as well.2 The comments
were submitted by trade associations 3 and companies subject to
the Textile Rules and the Wool Rules.4 In addition, one comment
was submitted by an industry-wide committee formed to address issues
concerning the harmonization of textile regulations among the NAFTA
countries.\5\
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\2\ Unless otherwise identified (e.g., ``Wool Rules Submission),
all footnote citations to comments refer to Textile Rules
submissions.
\3\ National Knitwear & Sportswear Association [NKSA] (1),
National Association of Hosiery Manufacturers [NAHM] (2), American
Textile Manufacturers Institute [ATMI] (3), Cordage Institute [CORD]
(4), National Retail Federation [NRF] (5), American Fiber
Manufacturers Association, Inc. [AFMA] (7), American Textile
Manufacturers Institute [ATMI] (10), Ross & Hardies, on behalf of
United States Association of Importers of Textiles and Apparel [USA-
ITA] (11), American Apparel Manufacturers Association [AAMA] (15),
Liz Claiborne, Inc. and Labeling Committee, Industry Sector Advisory
Committee on Wholesaling and Retailing [ISAC 17] (17). Wool Rules
Submissions: Wool Bureau [WB] (1), Northern Textile Association
[NTA] (4), Harris Tweed Authority [HT] (6), Northern Textile
Association [NTA] (7).
\4\ Warren Featherbone Company [WFC] (6), Dan River Inc. [DR]
(8), Ruff Hewn [RUFF] (9), Gap, Inc. [GAP] (12), Fieldcrest Cannon,
Inc. [FIELD] (13), Fruit of the Loom [FRUIT] (14), Wemco Inc.
[WEMCO] (18), Sara Lee Knit Products [SARA] (19), Horace Small
Apparel Company [HORACE] (20), Perry Manufacturing Company [PERRY]
(21), Milliken & Company [MILL] (22), Cranston Print Works Company
[CRAN] (23), Angelica Corporation [ANGEL] (24), Russell Corporation
[RUSS] (25), Haggar Apparel Company [HAGGAR] (26), Capital Mercury
Shirt Corp. [CAP] (27), Biderman Industries Corporation [BIDER]
(28). Wool Rules Submission: Northwest Woolen Mills [NWM] (2).
\5\ Trilateral Labeling Committee [TLC] (16). Other comments
appear to track TLC's recommendations closely: WFC (6), RUFF (9),
WEMCO (18), SARA (19), ANGEL (24), RUSS (25) HAGGAR (26), CAP (27),
and BIDER (28) explicitly adopt or endorse the recommendations of
TLC (16).
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B. Specific Comments
Twelve comments explicitly express support for the Wool Rules as a
whole 6 because the Wool Rules protect consumers from deceptive
fiber claims and provide them with valuable information about the fiber
content of apparel, allowing them to make educated product comparisons
and purchasing decisions.7 The comments recognize minimal costs
but do not identify any specific costs imposed by the Wool Rules on
consumers.8
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\6\ NKSA (1) p.1, NAHM (2) p.1, ATMI (3) p.1, CORD (4) p.2, DR
(8) p.1, ATMI (10) p.1, FIELD (13) p.1, FRUIT (14) p.1, PERRY (21)
p.1, MILL (22) p.1. Wool Rules Submissions: NTA (4) pp. 1-2, HT (6)
pp. 2-4. These comments were submitted by companies covered by the
Textile and Wool Rules, but they express the belief that the Wool
Rules help consumers.
\7\ NAHM (2) states, at p.1, that the regulations should be
retained ``because they provide a framework for fiber content
disclosure, labeling, country-of-origin clarification, and
provisions for guarantees, all of which protect manufacturers,
buyers, and retail consumers.'' NKSA (1) states, at p.1, that the
Rules serve an important and useful purpose for consumers who may
not be aware of the various fibers in the multi-fiber blends that
have become common in the marketplace. PERRY (21) states, at p.1,
that the Rules are ``both necessary and desirable if we are to have
orderly trade within this hemisphere.''
\8\ NAHM (2) states, at p.1, that the Rules impose costs on
consumers, but does not identify what the costs are. The comment
states that ``the assurances offered by the Rules to purchasers far
outweigh the costs associated with fiber content disclosure on
labeling and the use of guarantees.'' ATMI (10) states, at p.1, that
it ``has no knowledge of additional imposed costs to the consumer
because of the rules.''
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In addition, the comments show that the Wool Rules are valuable to
manufacturers and firms. They allow firms to distinguish their products
from others in the marketplace based on the products' fiber
content.9 They improve the credibility of firms and their products
by assuring consumers that the products they are purchasing will meet
specific standards and consumer tastes.10 The Wool Rules also
``maintain the integrity of fiber type information from the fiber
supplier to the textile manufacturer to the apparel manufacturer to the
consumer.'' 11 Although the Wool Rules impose labeling and
packaging costs,12 they are small and have become an accepted part
of doing business in the textile industry.13 The commenters
consider the costs of compliance to be minimal and the benefits to
companies and consumers to be tangible and great.
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\9\ NKSA (1) p.1.
\10\ NAHM (2) p.2.
\11\ ATMI (3) p.1. See also DR (8) p.1; ATMI (10) p.1, MILL (22)
p.2.
\12\ NAHM (2) p.2. ATMI (3) states, at p.1, that ``[t]here are
minimal costs associated with the manufacture of the label, its
attachment to the textile product, and costs carried by the
manufacturer to maintain records.''
\13\ NKSA (1) p.1, ATMI (3) pp.1-2, DR (8) p.1, ATMI (10) p.5,
FIELD (13) p.6, MILL (22) p.6. ATMI (3) states, at pp.1-2, that
``[p]rior to the rules, textile mills typically kept records of
fiber content and performed fiber identification tests to certify
that fiber being supplied to the mill was indeed what the supplier
stated. These costs and practices have become a generic part of
textile business operations. The rules only add the cost of a
consumer label.''
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The comments submitted in response to the regulatory review of the
Wool Rules propose certain amendments to the Rules. On the basis of the
comments and other available information, the Commission has considered
recommendations to amend the Wool Rules to: (1) Allow the listing of
generic fiber names for fibers that have a functional significance and
are present in the amount of less than 5% of the total fiber weight of
a wool product, without requiring disclosure of the functional
significance of the fiber, as presently required by Wool Rule 3(b); (2)
require labels of covered products containing reprocessed fibers to
disclose whether such reprocessed fibers consist of all new pre-
consumer or untreated post-consumer materials; (3) state specifically
that selvages are exempt; (4) modify country of origin disclosure
requirements; and (5) eliminate the requirement of Wool Rule 10(a) that
the front side of a cloth label, only one end of which is sewn to the
product in such a manner that both sides of the label are readily
accessible to the prospective purchaser, bear the wording ``Fiber
Content on Reverse Side'' when the fiber content disclosure is listed
on the reverse side of the label.
C. NAFTA Related Comments
The goal of NAFTA is to establish a trade zone in which goods can
flow freely among Canada, Mexico, and the United States, a goal that
may be impeded by the multiple burdens imposed on companies by
regulations in the NAFTA countries. Several comments discussed NAFTA
and the need for regulatory convergence. For example, some comments
focus on the problems posed by linguistic differences among the NAFTA
countries, and
[[Page 67741]]
regulations based on these differences, that affect the printing of
fiber content information, country of origin names, and care
instructions.14 Manufacturers must either print separate labels
for each market, which may inhibit the efficient allocation of
inventories within the NAFTA territory and increase costs to
consumers,15 or print unwieldy, multilingual labels that satisfy
all of the regulatory requirements of each NAFTA country.16 In
addition, some comments suggested that differences in labeling
requirements, including label attachment requirements, the definition
of key terms, and responsible party identification systems in the NAFTA
countries, may also impede trade.17 The comments generally agree
that the NAFTA signatories must consult and coordinate with each other
to simplify textile and apparel labeling so that differences in
labeling rules and the manner in which compliance is determined do not
pose trade barriers.18
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\14\ This notice does not address the issue of the use of
symbols in care labeling. The Commission has published separately a
notice regarding that issue. 60 FR 57552 (Nov., 16, 1995).
\15\ FRUIT (14) p.3.
\16\ USA-ITA (11) p.2, see also FRUIT (14) p.2. The comments,
however, do not provide extrinsic evidence that long labels cause
consumer confusion or that they are financially burdensome to
manufacturers or distributors.
\17\ AFMA (7) p.1, FRUIT (14) p.2, SARA (19) p.4. FRUIT states
that differences in labeling requirements may ``function as non-
tariff trade barriers and significantly impede the free flow of
goods within the NAFTA territory,'' inhibiting sales and harming
American industry.
\18\ WFC (6) p.1, AFMA (7) p.1, DR (8) p.1, RUFF (9) pp.1-2,
ATMI (10) pp.1-2, USA-ITA (11) p.2, FIELD (13) pp.1-2, FRUIT (14)
pp.1-2, AAMA (15) p.1, TLC (16) p.1, ISAC 17 (17) p.1 WEMCO (18)
p.1, SARA (19) p.4, HORACE (20) p.2, MILL (22) p.2, ANGEL (24) p.1,
RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.
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NAFTA requires the harmonization of labeling regulations. Article
906 of NAFTA states that ``the Parties shall, to the greatest extent
practicable, make compatible their respective standards-related
measures, so as to facilitate trade in a good or service between the
Parties.'' Article 913 of the Act requires the creation of a Committee
on Standards-Related Measures, including a Subcommittee on Labelling of
Textile and Apparel Goods.
Many of the comments contend that harmonizing labels would benefit
manufacturers and consumers alike by decreasing the costs of production
and distribution. One commenter stated that prices charged to consumers
may decline if the costs associated with labeling decline.19 A few
comments contend that harmonized labeling would be less confusing to
consumers.20
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\19\ FRUIT (14) p.2.
\20\ WFC (6) p.1, AAMA (15) pp.1, 2, TLC (16) p.2, WEMCO (18)
p.1, SARA (19) pp.2, 3, ANGEL (24) p.1, HAGGAR (26) p.1, CAP (27)
p.1, BIDER (28) p.1.
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The Commission has considered the comments and other available
information and NAFTA-related proposals to amend the Wool Rules to: (1)
Allow for a system of shared information for manufacturer or importer
identification among the NAFTA countries; (2) add a provision
specifying that a Commission RN will be subject to cancellation if,
after a change in the material information contained on the RN
application, a new application that reflects current business
information is not promptly submitted; (3) allow the use of
abbreviations for generic fiber names; and (4) allow the use of
abbreviations and symbols in country of origin labeling.
D. Conclusion
Although no comments were received from consumers or consumer
groups, the Commission believes that consumers benefit directly from
the Wool Rules and consider the mandated disclosures material in making
purchase decisions. A consumer with a preference for a particular fiber
can readily determine the presence and percentage of that fiber in
covered products. Likewise, a consumer who is allergic to a certain
fiber can avoid textiles containing that fiber. Companies at all levels
of manufacture, distribution, and sales of textile products support and
accept these regulations. The Commission has decided, however, to seek
additional comment on possible amendments to the Wool Rules.
Passage of NAFTA, which highlighted the importance of reconciling
the labeling requirements of the member countries, prompted many of the
changes proposed in the comments. After reviewing specific
recommendations, the Commission is considering some of the suggested
changes, as well as other possible amendments. The Commission has,
however, rejected other changes to the Wool Rules proposed in the
comments as infeasible or unnecessary. This Notice of Proposed
Rulemaking (NPR) seeks comment concerning the proposed changes. All of
the recommendations for change are discussed below.
III. Proposals for Amendments to the Wool Rules
This section discusses specific recommendations and proposed
changes on which the Commission sought comment in the FRN and
additional issues raised by the comments or the Commission. This
discussion includes a summary and analysis of the comments and a
discussion of the proposed changes that the Commission has made.
A. Use of Generic Fiber Names for Fibers with a Functional Significance
Present in the Amount of Less Than 5% of the Total Weight of a Wool
Product
One commenter recommended that the Commission revise Wool Rule 3(b)
to allow the listing of generic fiber names for fibers that have a
functional significance and are present in the amount of less than 5%
of the total fiber weight of a textile product, without disclosing the
functional significance of the fibers, as the Wool Rule currently
requires.21 The commenter maintains that the existing Wool Rule is
``archaic'' because consumers know, for example, that the functional
significance of spandex is elasticity. In addition, the commenter
expresses the view that the Rule is not well known in the international
textile industry. As a result, wool imports into the United States may
be held by the Customs Service until they have been marked in a manner
consistent with U.S. law. Such delays may be costly to businesses and
ultimately to consumers.
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\21\ GAP (12) pp.1-2.
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Another commenter 22 specifically recommended that the Wool
Rules be amended to recognize the relatively recent and growing trend
of manufacturers' blending small amounts (less than 5%) of nylon (or
perhaps some other synthetic fiber) with ``coarser, less expensive wool
fibers * * *. to give the lightweight wool yarn sufficient strength to
be woven or knitted into fabric form.''
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\22\ Wool Rules Submission: WB (1) pp.1-12
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The Commission believes that amending Wool Rule 3(b) to dispense
with an unnecessary labeling requirement might benefit manufacturers,
importers and other marketers, as well as consumers. In addition, the
cost to consumers is likely to be low because consumers generally may
know the functional significance of many fibers, and manufacturers are
likely to disclose voluntarily the functional significance of others
that may be less familiar. Therefore, the Commission proposes to amend
Wool Rule 3(b) to read as follows:
Sec. 300.3 Required Label Information.
(a) * * *
[[Page 67742]]
(b) In disclosing the constituent fibers in information required
by the Act and regulations or in any non-required information, no
fiber present in the amount of less than five percentum may be
designated by its generic name or fiber trademark but shall be
designated as ``other fiber,'' except that the percentage of wool or
recycled wool shall always be stated, in accordance with Section
4(a)(2)(A) of the Act. Where more than one of such fibers, other
than wool or recycled wool, are present in amounts of less than five
percentum, they shall be designated in the aggregate as ``other
fibers.'' Provided, however, that nothing contained herein shall
prevent the disclosure of any fiber present in the product which has
a clearly established and demonstrable functional significance when
present in the amount stated, as for example:
98% wool
2% nylon
when nylon has a functional significance (e.g., adding strength to
the fabric).
The only difference between existing Wool Rule 3(b) and the
proposed amendment is that the requirement to disclose the fiber's
functional significance has been deleted. The proposed amendment would
still prohibit disclosing generic fiber names for fibers present in an
amount of less than 5% that do not have a functional significance when
present in the amount contained in the wool product. Thus, the proposed
amendment would still allow the consumer to distinguish between fibers
constituting less than 5% of the total weight that have a functional
significance and those that do not. The statement, ``98% wool, 2%
nylon,'' is a common example of a disclosure that includes a fiber
constituting less than 5% of a covered product's weight yet having a
demonstrable functional significance when present in such small
amounts. The Commission solicits comment on the benefits and costs to
consumers and manufacturers of this proposed amendment.
B. Labels of Covered Products Containing Reprocessed Fibers
One commenter 23 suggests that certain untreated ``post-
consumer'' reprocessed textiles might contain harmful bacteria and
organisms and consequently might be a breeding ground for disease. The
commenter says that the same potential for disease does not arise with
respect to reprocessed fibers derived from ``pre-consumer'' (or
manufacturer) materials. The commenter recommends that the Wool Rules
be amended to require products containing reprocessed fibers to
disclose whether the reprocessed fibers were reclaimed from ``pre-
consumer'' or ``post-consumer'' materials.
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\23\ Wool Rules Submission: NWM (2) pp.2-3.
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The Commission does not propose to amend the Wool Rules to require
such disclosures because it does not believe factual support exists for
this contention or other problems relating to reprocessed fibers.
Should evidence of a health hazard arise, the Commission will address
the issue at that time.
C. Fiber Content of Selvages
One commenter 24 recommends that the Wool Rules be amended to
state specifically that the fiber content of selvages need not be taken
into account in the calculation and disclosure of fiber content.
Selvages are narrow strips of material attached or woven to the edges
of a bolt of fabric and used by the manufacturer to hold the fabric
while it is being dyed. Selvages also prevent the fabric from fraying
or raveling. Selvages are not incorporated into a garment or other
finished product, but are discarded during the manufacturing process.
The Commission does not construe the Wool Act and the disclosure
provisions in the Wool Rules to cover selvages. Consequently, because
the selvages at issue are not subject to the Wool Act marking
requirements, there is no need to amend the Wool Rules.
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\24\ Wool Rules Submission: HT (6) pp. 1-6.
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D. Country of Origin Labeling
Under the Wool Act and Wool Rule 25a, an imported wool product must
bear a label disclosing the name of the country where the product was
processed or manufactured. One commenter recommends that domestic
companies that add value to imported greige goods (unfinished plain
fabric) through printing and finishing be allowed to label the finished
product simply as ``Made in USA,'' without mention of imported fabric,
to encourage value-added manufacturing in the United States.25
Such a label would not comply with Wool Rule 25a, which states that a
wool product made in the United States of imported fabric must contain
a label disclosing those facts, as for example: ``Made in USA of
imported fabric.'' Only wool products completely made in the United
States of fabric that was also made in the United States may be labeled
``Made in USA'' without qualification.26 At present, the
Commission does not propose any amendments to this Wool Rule.27
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\25\ CRAN (23) pp. 1-2.
\26\ In determining the appropriate disclosure for country of
origin, the manufacturer or processor needs to look only one step
back in the process. For example, the label ``Made in USA'' would be
appropriate if the finished article were made from fabric produced
in the U.S., regardless of whether the yarn that went into the
fabric was imported.
\27\ The Commission is currently examining issues pertaining to
``Made in USA'' advertising and labeling claims generally in a
separate context. On July 11, 1995, the Commission announced that it
would re-examine its ``Made in U.S.A.'' policy by (1) conducting a
comprehensive review of consumers' perceptions of ``Made in USA''
and similar claims and (2) holding a public workshop to examine
issues relevant to the standard. The Commission issued a notice, 60
FR 53922 (Oct. 18, 1995), requesting public comment in preparation
for the workshop. The workshop was held on March 26-27, 1996.
Following the workshop, the Commission sought further public comment
on the issues. 61 FR 18600 (April 26, 1996). The second comment
period closed on June 30, 1996.
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E. Label Mechanics and Wool Rule 10(a)'s ``Fiber Content on Reverse
Side'' Disclosure Requirement
Several comments addressed the interrelated issues of label type,
label attachment, label placement, and use of both sides of a label to
set out required information.28 The comments recommend that the
Wool Rules not specify a type of label (e.g., woven, non-woven,
printed) to be used or the method of label attachment, to allow for
changes in labeling technology. The comments recommend that the Wool
Rules require only that the label remain securely affixed to the
product and that the information be legible and remain legible for the
useful life of the product. The comments also recommend that the Wool
Rules allow both sides of a label to be used to display the required
information.29 The comments discuss the issue of label attachment
in the context of NAFTA and recommend that U.S. label attachment
regulations be harmonized with those of the NAFTA countries.
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\28\ WFC (6) p.1 DR (8) p.1, RUFF (9) p.2, ATMI (10) p.5, FIELD
(13) p.6, FRUIT (14) p.5, AAMA (15) p.3, TLD (16) p.4, WEMCO (18)
p.1, SARA (19) p.4, HORACE (20) p.2, MILL (22) p.6, ANGEL (24) p.1,
RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1. The
work program of the NAFTA subcommittee on labeling includes ``a
uniform method of attachment'' as one of its issues.
\29\ WFC (6) p.1, DR (8) p.1, RUSS (9) p.2, ATMI (10) p.5, FIELD
(13) p.6, AAMA (15) p.3, TLC (16) p.4, WEMCO (18) p.1, SARA (19)
p.4, HORACE (20) p.2, MILL (22) p.6, ANGEL (24) p.1, russ (25) p.1,
HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.
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The current Wool Rules already address many of the recommendations
made by the comments regarding the mechanics of labeling. Rule 5--
``Required Label and Method of Affixing''--allows any type of label
(e.g., a hangtag; a gummed-on label; a woven, non-woven, or printed
label) to be used, so long as the label is securely affixed and durable
enough to remain attached to the product until the consumer receives
it. There is no requirement in the Wool Rules that the label be
permanently attached to the covered
[[Page 67743]]
product and therefore no requirement that the label remain legible for
the useful life of the product. Wool Rule 10(a) provides that: ``The
required information may appear on any label attached to the product,
provided all the pertinent requirements of the Act and Regulations are
met and so long as the combination of required information and non-
required information is not misleading.''
Wool Rule 10(a) further requires in general that all three Wool Act
disclosures--country of origin, company name or RN, and fiber content--
be made in immediate conjunction with one another. It, provides,
however, that the company name or RN may appear on the back of the
required label or on the front of another label in immediate proximity
to the required label, in accordance with Rule 21--``Use of a Separate
Label for Name or Registered Identification Number.'' It also provides
that when a cloth label is used, and only one end is sewn to the
product, the fiber content disclosure may be placed on the back of the
label, ``if the front side of such label clearly and conspicuously
shows the wording Fiber Content on Reverse Side.''
One commenter proposed that this second provision of Wool Rule
10(a) be amended to eliminate the requirement that manufacturers place
the phrase ``Fiber Content on Reverse Side'' on the front side of the
required label because ``consumers today are aware that both sides of
the label contain information important to their purchasing decision.''
30 The Commission agrees that consumers are likely to look on the
back of labels for information without an express direction to do so,
particularly because under the Commission's Care Labeling Rule, 16 CFR
Part 423, garment care instructions may, and often do, appear on the
reverse side of a label. The required disclosure, therefore, may be
unnecessary.
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\30\ FRUIT (14) p. 5.
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The Commission proposes to amend Wool Rule 10(a). The Rule might be
amended narrowly to eliminate the ``Fiber Content on Reverse Side''
disclosure requirement for cloth labels with one end sewn to textile
products. Another alternative would be to amend Wool Rule 10(a) to
allow the required fiber content information to appear on the reverse
side of any kind of permissible label as long as the information
remains ``conspicuous and accessible.'' The Commission also solicits
other language alternatives relating to the mechanics of labeling, as
well as comment on the benefits and costs to consumers and
manufacturers.
The Commission also requests comment on whether fiber content
identification should be printed on labels that are permanently
attached to a wool product,31 and on whether the other two
required disclosures should similarly appear on a permanent label. This
information may continue to be useful to consumers throughout the life
of the product. For example, fiber content identification may assist
professional cleaners in determining whether certain cleaning
techniques are appropriate for an item of wool apparel. Moreover,
advances in labeling technology make it unlikely that requiring a
permanent label would unduly burden manufacturers. Many manufacturers
already make the required disclosures on permanent labels. Finally, the
Commission seeks comment concerning any specific conflicting rules and
regulations for label attachment in Mexico and Canada, and whether such
conflicts might pose trade impediments that could be removed by
changing the Commission's Wool Rules.
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\31\ Comment on this issue was also requested in a Federal
Register notice seeking comment on proposed amendments to the
Commission's Care Labeling Rule, 16 CFR part 423, 60 FR 67102 (Dec.
28, 1995).
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F. System of Shared Information for Manufacturer or Importer
Identification Among the NAFTA Countries
Under the Textile Act and the Fur Products Labeling Act,32 as
well as under the Wool Act, the required label on covered products must
bear the identification of one or more companies responsible for the
manufacture, importation, offering for sale, or other handling of the
product, either by the full name under which the company does business
or, in lieu thereof, by the RN issued by the Commission. Canada has a
similar system of identification numbers known as CA numbers. Mexico
does not have a similar system, but the Mexican government issues tax
identification numbers to companies.
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\32\ 15 U.S.C. 69.
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To eliminate the need for a company to register in more than one
country, the comments recommend that the FTC and appropriate government
agencies in the NAFTA countries develop an integrated system by
allowing any RN, CA, or Mexican tax identification number to suffice as
legal company identification in all three NAFTA countries.33 The
comments repeatedly state that it would not be necessary to create one
identification number system. They recommend that each NAFTA country
continue its policy and procedure of registration, with the U.S.
continuing the present system of RN numbers. The countries could
exchange information on computer databases so that a covered product
can be traced to a manufacturer or other responsible party using either
an RN number, a CA number, or a Mexican tax number.
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\33\ WFC (6) p.1, DR (8) p.1, RUFF (9) pp.1-2, ATMI (10) p.2,
USA-UTA (11) p.2, FIELD (13) pp.2-3, FRUIT (14) p.5, AAMA (15) pp.2-
3, TLC (16) p.4, ISAC 17 (17) p.1, WEMCO (18), p.1, SARA (19) p.2,
HORACE (20) p.2, MILL (22) p.3, ANGEL (24) p.1, RUSS (25) p.2,
HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.
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Congress would need to amend the Wool Act to allow CA numbers and
Mexican tax numbers, which are not registered by the Commission, to be
used on wool products shipped for distribution in the United States.
For present purposes, the Commission seeks comment on the advantages
and disadvantages of a system of shared information, the feasibility of
implementing such a system across borders, and the impact such a system
might have on the ability of the Commission, consumers, and firms to
track responsible parties. Alternatively, the Commission might consider
whether simply to permit the use of the identification numbers of a
NAFTA trading partner, provided that the partner made the identifying
information readily available to anyone seeking it. The Commission
seeks comment on the advantages and disadvantages of this alternative,
which also would require statutory amendment.
G. Require Holders of RN Numbers to Update Their Registration
Information When Changes in That Information Occur
The success of a system of shared information would depend to a
great extent on the availability and the quality of the information in
the Commission's RN registry and the registration systems of Canada and
Mexico. To increase the usefulness of the RN registry, the Commission
plans to improve its accuracy and the ease of access to its contents.
Since initially being issued their RNs, many companies have changed
their legal business name, business address, and/or company type (e.g.,
from proprietorship to corporation) without notifying the FTC about the
change(s) as requested in the RN application. Since the 1940's many RN
holders have gone out of existence, and others, while still in
existence, no longer have any need for their RNs. As a result, although
the records accurately reflect the original application information, a
large percentage of the official FTC records do not reflect an actual
user's current
[[Page 67744]]
name, place of business, and/or company type.
Registered identification numbers are subject to cancellation
whenever any such number was procured or has been used improperly or
contrary to the requirements of the Acts administered by the Federal
Trade Commission, and regulations promulgated thereunder, or when
otherwise deemed necessary in the public interest. The Commission
proposes to add a provision to the Wool Rules that would subject an RN
number to cancellation if, after a change in the material information
contained on the RN application, a new application that reflects
current business information is not promptly submitted to the
Commission. Section 300.4 of the Rules already requires that the
Commission be apprised of such changes. The proposed amendment is
merely an added provision to enable the Commission to update its
database.34 The Commission plans to undertake a program to update
the RN database, in stages over a period of time. Commission staff will
make every reasonable effort to identify and locate all companies
actually using an RN and make them aware of their obligations to update
their applications before a specified deadline. Numbers assigned to
companies that are no longer in business, or that cannot be located,
would then be subject to revocation.
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\34\ It also complements the Commission's Rules of Practice,
which state: ``Numbers are subject to revocation for cause or upon a
change in business status or discontinuance of business.'' 16 CFR
1.32.
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The Commission seeks comment on the following proposed amendment to
Wool Rule 4(c). Currently, Wool Rule 4(c) is as follows:
Sec. 300.4 Registered Identification Numbers.
(a) * * *
(b) * * *
(c) Registered identification numbers shall be used only by the
person or concern to whom they are issued, and such numbers are not
transferable or assignable. Registered identification numbers shall be
subject to cancellation whenever any such number was procured or has
been used improperly or contrary to the requirements of the Acts
administered by the Federal Trade Commission, and regulations
promulgated thereunder, or when otherwise deemed necessary in the
public interest.
The proposed amendment would add a third sentence to read as
follows:
Registered identification numbers will be subject to
cancellation if the Federal Trade Commission fails to receive prompt
notification of any change in name, business address, or legal
business status of a person
or concern to whom a registered identification number has been
assigned by application duly executed in the form set out in
subsection (e) of this section, reflecting the current name,
business address, and legal business status of the person or
concern.
H. Use of Abbreviations for Fiber Content Identification
Although supporting the fiber content disclosure requirements, many
comments recommend that the Wool Rules be amended to allow
abbreviations of generic fiber names in fiber content
disclosures.35 Thirteen comments state that spelling out complete
fiber names in three languages for the marketing of covered products in
the NAFTA countries is unwieldy and that abbreviations of generic fiber
names would permit the required information to be conveyed on a smaller
label.36 One commenter contends that if abbreviations were
permitted, they could lead to a single label for NAFTA countries and
eventually to an international label.37
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\35\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.2: ATMI (10) p.4-5,
USA-ITA (11) p.2, FIELD (13) pp.4-5, FRUIT (14) p.3, AAMA (15) p.2,
TLC (16) pp.3-4, ISAC 17 (17) p.2, WEMCO (18) p.1, SARA (19) p.2,
HORACE (20) p.2, MILL (22) pp.4-5, ANGEL (24) p.1, RUSS (25) p.2,
HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.
\36\ WFC (6) p.1, USA-ITA (11) p.2, FRUIT (14) p.2, AAMA (15)
p.2, TLC (16) p.3, ISAC 17 (17) p.2, WEMCO (18) p.1, SARA (19) p.1,
ANGEL (24) p.1, RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER
(28) p.1.
\37\ ISAC 17 (17) p.2.
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Many comments urge that the FTC and the appropriate agencies in the
NAFTA countries adopt abbreviations for the most common fibers--
acrylic, cotton, nylon, polyester, rayon, silk, spandex, and wool--
which are said to represent more than 80% of all apparel and textile
products sold in the marketplace, and an abbreviation for designating
``other fibers'' that are present in amounts of less than 5% of total
fiber weight.38 The result would be three abbreviations, one in
each language--English, Spanish, and French--for the most common
generic fibers.39 Although abbreviations eventually could be
developed for other fibers, the comments emphasize the need to develop
abbreviations for the more common generic fibers first. Other fibers
that the Rules do not permit to be lumped together as ``other fibers''
can be
identified by their full fiber names.40 A few comments recommend
three- to four-letter abbreviations for fiber names; 41 one
commenter states that any abbreviations used for fiber identification
should not arbitrarily be limited to a specific number of
letters.42
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\38\ WFC (6) p.1, DR (8) p.1, ATMI (10) p.4, FIELD (13) pp.4-5,
FRUIT (14) p.3, AAMA (15) p.2, TLC (16) p.3, WEMCO (18) p.1, SARA
(19) p.2, MILL (22) pp.4-5, ANGEL (24) p.1, HAGGAR (26) p.1, CAP
(27) p.1, BIDER (28) p.1. Some comments omit acrylic from this list
of fibers. RUFF (9) p.2, HORACE (20) p.2, RUSS (25) p.2.
\39\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.2, ATMI (10) p.4, AAMA
(15) p.2, TLC (16) p.3, WEMCO (18) p.1, SARA, (19) p.2, ANGEL (24)
p.1, RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.
\40\ DR (8) p.1, ATMI (10) p.4, FIELD (13) p.5, FRUIT (14) p.3,
MILL (22) p.5.
\41\ FIELD (13) p.4, ISAC 17 (17) p.2.
\42\ AFMA (7) states, at p. 2, that ``[a]s labeling requirements
are simplified, the quality and consistency of information provided
to the consumer should be maintained,'' so as not to compromise
``the two decades of education and experiences developed under the
current system in the United States.''
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The comments recognize that when fiber names are entirely different
in different languages, arriving at common abbreviations may be
difficult.43 But the comments point out that when fiber names are
identical or similar, the same abbreviation could be used by more than
one country, thereby reducing the use of abbreviations on
labels.44
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\43\ AFMA (7) p.3.
\44\ WFC (6) p.1, AFMA (7) p.3, DR (8) p.1, RUFF (9) p.2, ATMI
(10) p.4, FIELD (13) p.4, FRUIT (14) p.3, AAMA (15) p.2, TLC (16)
p.3, WEMCO (18) p.1, SARA (19) p.2, HORACE (20) p.2, MILL (22) p.4,
ANGEL (24) p.1, RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER
(28) p.1.
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Comments also recommend that the use of abbreviations should be
optional,45 and that manufacturers should be allowed to use full
labeling and still qualify for NAFTA benefits in all signatory
countries.46 To educate the public about the meaning of
abbreviations, the comments recommend that manufacturers or retailers
provide hangtags, explanatory charts, or other consumer education
labels for a limited period.47
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\45\ AAMA (15) p.2.
\46\ AFMA (7) p.3.
\47\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.1, ATMI (10) p.4, FIELD
(14) p.5, FRUIT (14) p.3, AAMA (15) p.2, TLC (16) p.4, WEMCO (18)
p.1, SARA (19) p.2, MILL (22) p.5, ANGEL (24) p.1, HAGGAR (26) p.1,
CAP (27) p.1, BIDER (28) p.1.
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The Commission believes that the use of abbreviations for fiber
names may benefit companies without harming consumers. The Commission
therefore proposes to amend Wool Rules 8 and 9 to allow the use of
abbreviations for generic fiber names. Generally, Wool Rule 9(a) does
not allow the use of abbreviations for disclosures of required
information.48 To allow the use of abbreviations for common
generic fiber names, the Commission proposes to amend Rules 8(a) and
9(a) to read as follows:
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\48\ Nevertheless, Wool Rule 25a(e) does allow abbreviations for
country of origin disclosure, but only when the abbreviations
``unmistakenly indicate the name of a country, such as Gt. Britain
for Great Britain.''
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[[Page 67745]]
Sec. 300.8 Use of Fiber Trademark and Generic Names.
(a) Except where another name is required or permitted under the
Act or regulations, the respective generic name of the fiber shall
be used when naming fibers in the required information; as for
example: wool,'' ``recycled wool,'' ``cotton,'' ``rayon,'' ``silk,''
``linen,'' ``acetate,'' ``nylon,'' and ``polyester,'' provided,
however, that the following abbreviations may be used for cotton,
wool, polyester, rayon, nylon, spandex, silk, and acrylic:
cotton--cot
wool--wl
polyester--poly
rayon--ryn
nylon--nyl
spandex--spdx
silk--slk
acrylic--acrl
* * * * *
Sec. 300.9 Abbreviations, Ditto Marks, Asterisks.
(a) In disclosing required information, words or terms may not
be designated by ditto marks or appear in footnotes referred to by
asterisks or other symbols in required information, and may not be
abbreviated except as permitted in Rule 8 and Rule 25a.
* * * * *
The Commission solicits comments on these proposed amendments, as
well as alternative amendment language, other suggestions for English-
language abbreviations for the above-listed fibers, and abbreviations
for the catch-all classifications, ``other fiber'' and ``other
fibers.'' The Commission also seeks submission of empirical data (copy
tests, etc.) about consumer understanding of abbreviations and the
impact that the use of abbreviations may have on consumers and firms.
In addition, the notice asks whether the use of abbreviations on the
required fiber content labels should be conditioned upon use of
explanatory hangtags, indefinitely or for a limited period of time, and
if the latter, for how long.
I. Use of Abbreviations and Symbols in Country of Origin Labeling
Wool Rule 25a requires that the name of the country where the wool
product was processed or manufactured be indicated on a label. The
comments support the optional use of three-letter abbreviations for
country of origin names (such as ``CAN'' for ``Canada,'' ``MEX'' for
``Mexico,'' and ``USA'' for ``United States''),49 and a symbol,
such as a solid flag, to denote the words ``made in'' or ``product of''
in country of origin disclosures.50 The commenters assert this
would facilitate trade under NAFTA by reducing the label size,
eliminating the need for three languages, and reducing consumer
confusion. The comments contend that consumer education programs could
be instituted to educate the consumer as to the meaning of the
abbreviations and the symbol.51 Only one comment opposed the use
of abbreviations of country names.52
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\49\ WFC (6) p.1, DR (8) p.1, RUFF (9)( p.1, ATMI (10) p.3,
FRUIT (14) p.4, AAMA (15) p.1, TLC (16) p.3, ISAC 17 (17) p.3, WEMCO
(18) p.1, SARA (19) p.2, ANGEL (24) p.1, RUSS (25) p.2, HAGGAR (26)
p.1, CAP (27) p.1, BIDER (28) p.1.
\50\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.1, ATMI (10) p.3, FRUIT
(14) p.4, AAMA (15) p.1, TLC (16) p.3, ISAC 17 (17), p.3, WEMCO (18)
p.1, SARA (19) p.2, MILL (22) p.4, ANGEL (24) p.1, RUSS (25) p.2,
HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.
\51\ RUFF (9) p.1.
\52\ MILL (22) pp.1-2, 4. MILL states, at p.1, that ``[a]nything
less than the complete country name would obscure for consumers the
country of origin information intended by the Congress in the
labeling acts and the current F.T.C. rules.''
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Wool Rule 25a permits abbreviations of country of origin names if
they ``unmistakenly indicate the name of a country.'' The Rule already
permits using the abbreviation ``USA'' to convey the origin of wool
products made in the United States. The Rule does not, however,
expressly indicate that the abbreviations ``CAN'' and ``MEX'' are
appropriate for ``Canada'' and ``Mexico'' or that symbols (such as a
solid flag for the words ``made in'' or ``product of'') may be used on
wool products to denote country of origin. Although the Commission
believes that it is very likely that the terms ``CAN'' and ``MEX''
would satisfy the Rule's requirement that a country of origin
abbreviation ``unmistakenly indicate the name of the country,'' the
Commission nonetheless solicits comment on the use of these
abbreviations or other specific suggestions of appropriate
abbreviations for ``Canada'' and ``Mexico.'' To ensure harmonization
between abbreviations that are permitted under the Wool Rules and those
used in the other NAFTA countries, the Commission also seeks comment on
whether Canadian and Mexican regulations allow abbreviations for
country of origin names. The Commission lacks sufficient information
regarding the feasibility of using symbols in country of origin
labeling and thus seeks comment on this issue. Finally, the Commission
seeks comment on the benefits and costs to consumers and firms of
adding specific country of origin abbreviations to the Wool Rules and
allowing symbols.53
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\53\ U.S. Customs regulations with regard to country of origin
marking also permit ``abbreviations which unmistakably indicate the
same of a country'' (19 CFR 134.45(b)). In the past, Customs has
ruled that ``CAN'' and ``MEX'' do not meet this standard. Pursuant
to 19 U.S.C. 1625, however, any interested party can request
reconsideration of this interpretation.
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J. Use of Terms ``Mohair'' and ``Cashmere''
Wool Act Section 2(b) defines wool as ``the fiber from the fleece
of the sheep or lamb or hair of the Angora or Cashmere goat (and may
also include the so-called specialty fibers from the hair of the camel,
alpaca, llama, and vicuna) * * * .'' The fiber content disclosure
requirement under the Wool Rules specifically provides for the marking
of a wool product with the use of the word ``wool'' or the term
``mohair'' or ``cashmere.'' 54
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\54\ Wool Rule 19(a) states: ``In setting forth the required
fiber content of a product containing hair of the Angora goat known
as mohair or containing hair or fleece of the Cashmere goat known as
cashmere, the term ``mohair'' or ``cashmere,'' respectively, may be
used in lieu of the word ``wool,'' provided, the respective
percentage of each fiber designated as ``mohair'' or cashmere'' is
given * * * .''
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The Commission is aware that animals are being bred for specialty
fibers that would not fit into the required word categories for marking
a wool product. For example, breeders have crossed female cashmere
goats with angora males to produce an animal called a ``cashgora.''
55 This animal fleece is asserted to have ``the luster of mohair
combined with the soft handle of cashmere * * * . Tests of the fiber
have resulted in recommendations that the fiber is particularly
suitable for knitted garments.'' 56
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\55\ See P. Tortora, Understanding Textiles, Fourth Edition at
106-107 (1992).
\56\ Id. At 107.
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Although the Commission did not receive any specific comments on
whether the Wool Rules should be amended to accommodate new specialty
fibers, the Commission is soliciting comments on whether Wool Rule 19
should be expanded to include other specialty fibers.
IV. Invitation to Comment and Questions for Comment
A. Invitation
Members of the public are invited to comment on any issues or
concerns they believe are relevant or appropriate to the Commission's
consideration of the proposed amendments to the Wool Rules. The
Commission requests that factual data upon which the comments are based
be submitted with the comments. In addition to the issues raised above,
the Commission solicits public comment on the specific questions
identified below. These questions are designed to assist the public and
should not be construed as a limitation on the issues on which public
comment may be submitted.
[[Page 67746]]
B. Questions
Use of Generic Fiber Names for Fibers With a Functional Significance
and Present in the Amount of Less than 5% of the Total Fiber Weight of
a Wool Product
1. Should the Commission amend Wool Rule 3(b) to allow
manufacturers to list the generic fiber name(s) of fiber(s) that have a
functional significance and are present in the amount of less than 5%
of the weight of the product, without also requiring disclosure of the
functional significance of the fiber(s)?
a. What benefits and costs to consumers and businesses would result
from such an amendment? Would the amendment have a significant economic
impact on a substantial number of small businesses? Can that impact be
quantified?
b. Is the proposed amendment language set out in this notice
appropriate? If not, what amendment language should be used?
Country of Origin Labeling
2. Do the abbreviations ``CAN'' and ``MEX,'' for ``Canada'' and
``Mexico,'' ``unmistakenly indicate the name'' of each of these NAFTA
countries?
a. Are there other abbreviations for ``Canada'' and ``Mexico'' that
would ``unmistakenly indicate the name'' of each country?
b. Do Canadian and Mexican regulations allow the use of
abbreviations for country of origin names?
c. What would be the benefits and costs to consumers and businesses
of allowing these or other abbreviations for ``Canada'' and ``Mexico''?
3. Should the Commission amend the Wool Rules to allow a symbol to
be used to mean ``made in'' or ``product of,'' or other similar
phrases, in country of origin labeling?
a. What would be the advantages and disadvantages of allowing the
use of a symbol?
b. If the Commission decides to allow the use of a symbol, which
symbol should be used?
c. What benefits and costs would allowing a symbol have for
businesses or for purchasers of the products affected by the Wool
Rules?
d. What actions can be taken to ensure that consumers understand
what the symbol means?
e. How would the use of a symbol work when manufacturers wish to
distinguish between the country of origin of an unfinished wool product
and the country where another phase of the manufacturing process takes
place, as in ``Made in the Dominican Republic of United States
components''?
Label Mechanics and Wool Rule 10(a)'s ``Fiber Content on Reverse Side''
Disclosure Requirement
4. Should the Commission amend Wool Rule 10(a) to eliminate the
requirement that the front side of a cloth label, sewn to the product
so that both sides of the label are readily accessible to the
prospective purchaser, bear the words ``Fiber Content on Reverse Side''
when the fiber content disclosure is listed on the reverse side of the
label? Is there a continuing need for such a requirement?
5. Should the Commission amend Wool Rule 10(a) to allow the
required fiber content information to appear on the reverse side of any
kind of allowable label as long as the information remains
``conspicuous and accessible?''
a. What benefits and costs to consumers and firms would result from
each of these alternative amendments? Would these amendments have a
significant economic impact on a substantial number of small
businesses? Can that impact be quantified?
6. Are there any rules or regulations concerning label attachment
in Canada or Mexico that conflict with the Wool Rules? If so, what are
they, and how do they conflict?
Identification Numbers of Manufacturers or Other Responsible Parties
7. If it were consistent with the Wool Act to do so, should the
Commission amend the Wool Rules to allow the interchangeable use of RN,
CA, or Mexican tax numbers?
a. What would be the advantages and disadvantages of a system of
shared information? Alternatively, what would be the advantages and
disadvantages of a system whereby one NAFTA country recognized and
allowed the identification numbers of another NAFTA country, provided
that the information would be made easily accessible to those seeking
it?
b. Would the implementation of a system of shared information
across national borders be feasible?
c. What impact would a system of shared information have on the
ability of consumers and businesses to track responsible parties?
d. What benefits and costs to consumers and businesses would result
from such an amendment? Would such an amendment have a significant
economic impact on a substantial number of small business entities?
Explain the nature and amount of such impact.
8. Is the proposed amendment to Wool Rule 4(c)--enabling the
Commission to cancel an RN where the information contained on the
original application is not properly updated--reasonable and
appropriate? Are there other alternatives that would enable the
Commission to maintain an accurate data base?
Fiber Identification Labeling
9. Should the Commission amend the Wool Rules to permit the
abbreviation of fiber names on fiber content identification labels?
a. What costs and benefits to consumers and businesses would accrue
from allowing the use of abbreviations for fiber content
identification? Would such an amendment have a significant economic
impact on a substantial number of small businesses? Can that impact be
quantified?
b. Are there existing abbreviations for fibers that would clearly
convey the required fiber content identification information?
c. Is the proposed amendment language set out in this notice
appropriate? If not, what amendment language should be used?
10. Do Canadian and Mexican regulations allow the use of
abbreviations of fiber names on fiber content identification labels?
11. Do any empirical data (copy tests, etc.) exist concerning
consumer understanding of fiber name abbreviations?
12. Should the Commission amend the Wool Rules to provide that the
required disclosures be printed on labels that are permanently attached
to wool products? Should a permanent label be required only for fiber
content identification or for all three required disclosures? Would
such an amendment have a significant economic impact on a substantial
number of small businesses? Can that impact be quantified?
Specialty Fibers Other Than ``Mohair'' and ``Cashmere''
13. Should the Commission amend Wool Rule 19 to include specialty
fibers other than mohair and cashmere?
V. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-12, requires
that the agency conduct an analysis of the anticipated economic impact
of the proposed amendments on small businesses.57 The purpose of a
[[Page 67747]]
regulatory flexibility analysis is to ensure that the agency considers
impact on small entities and examines regulatory alternatives that
could achieve the regulatory purpose while minimizing burdens on small
entities. However, Section 605 of the RFA, 5 U.S.C. 605, provides that
such an analysis is not required if the agency head certifies that the
regulatory action will not have a significant economic impact on a
substantial number of small entities.
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\57\ The RFA addresses the impact of rules on ``small
entities,'' defined as ``small businesses,'' ``small governmental
entities,'' and ``small [not-for-profit] organizations,'' 5 U.S.C.
601. The Wool Rules do not apply to the latter two types of
entities.
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Because the Wool Act, and the Wool Rules issued thereunder, cover
the manufacture, sale, offering for sale, and distribution of wool
products, the Commission believes that any amendments to the Wool Rules
may affect a substantial number of small businesses. Unpublished data
prepared by the U.S. Census Bureau under contract to the Small Business
Administration (SBA) show that there are some 94 broadwoven fabric
mills making wool products (SIC Code 2231), most of which qualify as
small businesses under applicable SBA size standards.58 In
addition, there are 254 narrow fabric mills (SIC Code 2241), producing
wool products as well as fabrics of other fibers, more than 80% of
which are small businesses. Furthermore, there are many apparel
manufacturers that are small businesses covered by the Wool Rules. For
example, there are some 288 manufacturers of men's and boys' suits and
coats (SIC Code 2311), more than 75% of which are small businesses.
There are more than 1,000 establishments manufacturing women's and
misses' suits, skirts, and coats (SIC Code 2337), most of which are
small businesses. Other small businesses are likely involved in the
distribution and sale of products subject to the Wool Rules.
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\58\ SBA's revised small business size standards are published
at 61 FR 3280 (January 31, 1996).
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However, the proposed amendments apparently would not have a
significant economic impact upon such entities. Comments received
during the regulatory review of the Wool Rules indicated that the
current costs of complying with the Rules and the Wool Act are minimal.
The proposed amendments should clarify existing requirements of the
Wool Rules and reduce further the costs of compliance with Wool Act
requirements.
The proposal to eliminate the required label disclosure of the
functional significance of a named fiber that constitutes less than 5%
of total fiber weight would not place any additional costs or burdens
upon companies covered by the Wool Rules. Manufacturers that wish to
disclose this information would remain free to do so. For those that do
not include the information, labeling costs for such products might be
reduced very slightly.
The proposal to eliminate the required disclosure, ``Fiber Content
on Reverse Side,'' on the front side of a label where the content is
found on the reverse side likewise would not place any additional costs
or burdens upon companies covered by the Wool Rules. Manufacturers that
choose to continue using this phrase would be able to do so. For those
that eliminate the phrase, labeling costs for wool products might be
reduced slightly.
In addition, the Commission is requesting comment on whether fiber
content information should be required to appear on a label that is
permanently attached to a wool product. Such a requirement would ensure
that the information remains available to consumers, as well as to
professional cleaners, throughout the life of the product. The
Commission believes that because of advances in labeling technology,
and because many manufacturers already make content disclosures on a
permanent label, such a new requirement would likely not prove costly
or burdensome for small businesses. However, the Commission is
specifically seeking comment as to the potential impact on small
businesses.
The Commission proposes to amend Section 4 of the Wool Rules--
governing the issuance of an RN number--to clarify that such numbers
are subject to cancellation if changes in the information provided in
the original application for the number are not reported to the
Commission. This amendment does not impose any new requirement upon
businesses. Furthermore, while Commission cancellation of an
identification number would require a business to re-apply, this may be
done simply by submitting the identifying information already called
for in the Rules. Therefore, amending the Rules as proposed will not
impose any significant economic costs on members of the industry.
The Commission also proposes to amend Sections 8 and 9 of the Wool
Rules to allow abbreviations for generic fiber names in fiber content
disclosures on labels. Similarly, the Commission seeks comment on the
optional use of abbreviations and symbols to indicate the country of
origin of the product. Section 25a of the Wool Rules already permits
country name abbreviations that ``unmistakenly indicate the name of a
country'' However, the Commission seeks comment on specific suggestions
for appropriate abbreviations for NAFTA countries, as well as the
possible use of a symbol, such as a flag, to denote the words ``made
in'' or ``product of,'' appearing before the country name. The use of
any abbreviations or symbols would be optional. Use of abbreviations or
symbols could reduce costs to manufacturers somewhat by enabling them
to shorten labels and facilitating the use of a smaller label for
products to be shipped among NAFTA countries.
Finally, the Commission seeks comment as to whether Section 19 of
the Wool Rules should be amended to recognize new specialty fibers
produced by the cross breeding of different varieties of wool-bearing
animals. Such a change, while likely important to a few firms, is not
expected to have a significant impact on the wool industry.
On the basis of available information, the Commission certifies
that amending the Wool Rules as proposed will not have a significant
economic impact on a substantial number of small businesses. To ensure
that no significant economic impact is being overlooked, however, the
Commission requests comments on this issue. The Commission also seeks
comments on possible alternatives to the proposed amendments to
accomplish the stated objectives within the statutory framework. After
reviewing any comments received, the Commission will determine whether
a final regulatory flexibility analysis is appropriate.
VI. Paperwork Reduction Act
The Wool Rules contain various information collection requirements
for which the Commission has obtained clearance under the Paperwork
Reduction Act (PRA), 44 U.S.C. 3501 et. seq., Office of Management and
Budget (OMB) Control Number 3084-0047. These requirements relate to the
accurate disclosure of material information about wool products,
including fiber content and country of origin disclosures. The Rules
also require manufacturers and other marketers of covered products to
maintain records that support claims made on labels. Many of the
disclosure requirements and all of the recordkeeping requirements are
specifically mandated by the Wool Act. See 15 U.S.C. 68b, 68d. The
Commission has also obtained OMB clearance for petitions concerning
whether or not representations of the fiber content of a class of
articles are commonly made, or whether or not the
[[Page 67748]]
textile content of certain products is insignificant or
inconsequential. A Notice soliciting public comment on extending these
clearances through December 31, 1999, was recently published in the
Federal Register. 61 FR 43764 (August 26, 1996).
The proposed amendments would not increase the paperwork burden
associated with these paperwork requirements and, in fact, would lower
the current burden estimate by either eliminating or reducing certain
disclosure requirements. Specifically, the Commission proposes to: (1)
eliminate the functional significance disclosure requirement of Section
3(b); (2) eliminate the ``Fiber Content on Reverse Side'' disclosure
requirement of Section 10(a); and (3) allow abbreviations for generic
fiber names. All of these proposed amendments would allow manufacturers
greater flexibility in labeling procedures. Manufacturers that wish to
disclose this information (relating to the functional significance of
certain fibers and the fact that fiber content is found on the reverse
side of the label) would remain free to do so. For those that do not
include the information, the labeling burden would be reduced.
The Commission's proposed amendment regarding the cancellation of
RN numbers does not impose a paperwork burden on holders of Registered
Identification Numbers. This is because the Wool Rules at 16 CFR 300.4
already require companies to notify the FTC about changes in business
names, addresses, company type, etc. The current proposal merely adds
the element of cancellation by the Commission if these requirements are
not met. Neither the initial filing procedures nor the requirement to
update the information are new and therefore, no ``burden'' is imposed.
More importantly, the underlying certification itself does not meet
the definition of ``information'' contained in the PRA. In implementing
the Paperwork Reduction Act of 1995, OMB attempted to clarify the
exemption for ``certifications'' in both the Notice of Proposed
Rulemaking, 60 FR 30438, 30439 (June 8, 1995) and the Final Rule, 61 FR
44978, 44979 (August 9, 1995) (``the exemption applies when the
certification is used to identify an individual in a `routine, non-
intrusive, non-burdensome way.' '') This language reflects current
guidance in OMB/OIRA's Information Collection Review Handbook (1989),
which discusses exempt categories of inquiry (5 CFR 1320.3(h) (1)-(10))
that are not deemed to constitute ``information.'' Certifications, as
well as other forms of acknowledgments, comprise one of these
categories.59 Such inquiries are considered to be routine because
response to the requests rarely requires examination of records,
usually does not require consideration about the correct answer, and
usually is provided on a form supplied by the government. See OMB/OIRA
Handbook, p. 29. Accordingly, OMB's regulations exempt certifications
from the clearance requirement, provided that no information need be
reported beyond certain basic identifying information.
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\59\ Specifically, the first category consists of: ``affidavits,
oaths, affirmations, certifications, receipts, changes of address,
consents, or acknowledgements.'' 5 CFR 1320(H)(1).
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VII. Additional Information for Interested Persons
A. Motions or Petitions
Any motions or petitions in connection with this proceeding must be
filed with the Secretary of the Commission.
B. Communications by Outside Parties to Commissioners or their Advisors
Pursuant to 1.18(c) of the Commission Rules of Practice, 16 CFR
1.18(c), communications with respect to the merits of this proceeding
from any outside party to any Commissioner or Commissioner's advisor
during the course of this rulemaking shall be subject to the following
treatment. Written communications, including written communications
from members of Congress, shall be forwarded promptly to the Secretary
for placement on the public record. Oral communications, not including
oral communications from members of Congress, are permitted only when
such oral communications are transcribed verbatim or summarized at the
discretion of the Commissioner or Commissioner's advisor to whom such
oral communications are made, and are promptly placed on the public
record, together with any written communications relating to such oral
communications. Memoranda prepared by a Commissioner or Commissioner's
advisor setting forth the contents of any oral communications from
members of Congress shall be placed promptly on the public record. If
the communication with a member of Congress is transcribed verbatim or
summarized, the transcript or summary will be placed promptly on the
public record.
List of Subjects in 16 CFR Part 300
Labeling, Trade practices, Wool.
Authority: 15 U.S.C. 68.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 96-32260 Filed 12-23-96; 8:45 am]
BILLING CODE 6750-01-P
