[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.
---------------------------------------------------------------------------

    \30\ FRUIT (14) p. 5.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 69.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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
---------------------------------------------------------------------------

    \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.''
---------------------------------------------------------------------------

    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
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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:
---------------------------------------------------------------------------

    \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
---------------------------------------------------------------------------

    \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.''
---------------------------------------------------------------------------

    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
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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
---------------------------------------------------------------------------

    \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 * * * .''
---------------------------------------------------------------------------

    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
---------------------------------------------------------------------------

    \55\ See P. Tortora, Understanding Textiles, Fourth Edition at 
106-107 (1992).
    \56\ Id. At 107.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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