[Federal Register Volume 78, Number 183 (Friday, September 20, 2013)]
[Proposed Rules]
[Pages 57808-57818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-22919]


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FEDERAL TRADE COMMISSION

16 CFR Part 300

RIN 3084-AB29


Rules and Regulations Under the Wool Products Labeling Act of 
1939

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Based on comments received in response to its Advance Notice 
of Proposed Rulemaking, the Federal Trade Commission (the 
``Commission'' or ``FTC'') proposes amending its rules and regulations 
under the Wool Products Labeling Act of 1939 (``Wool Rules'' or 
``Rules'') to: conform to the requirements of the Wool Suit Fabric 
Labeling Fairness and International Standards Conforming Act, which 
revised the labeling requirements for cashmere and certain other wool 
products; and align with the proposed amended rules and regulations 
under the Textile Fiber Products Identification Act (``Textile 
Rules''). The Commission seeks comment on these proposals and several 
other issues.

DATES: Written comments must be received on or before November 25, 
2013.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Wool Rules, 16 CFR 
Part 300, Project No. P124201'' on your comment, and file your comment 
online at https://ftcpublic.commentworks.com/ftc/woolrulesnprm by 
following the instructions on the web-based form. If you prefer to file 
your comment on paper, mail or deliver your comment to the following 
address: Federal Trade Commission, Office of the Secretary, Room H-113 
(Annex Q), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Robert M. Frisby, Attorney, (202) 326-
2098, Federal Trade Commission, Division of Enforcement, Bureau of 
Consumer Protection, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

I. Introduction

    The Wool Products Labeling Act of 1939 (``Wool Act'') \1\ and Rules 
\2\ require marketers to, among other things, attach a label to each 
covered wool product disclosing: (1) The percentages by weight of the 
wool, recycled wool, and other fibers accounting for 5% or more of the 
product, and the aggregate of all other fibers; (2) the maximum 
percentage of the total weight of the wool product of any non-fibrous 
matter; (3) the name under which the manufacturer or other responsible 
company does business or, in lieu thereof, the registered 
identification number (``RN number'') of such company; \3\ and (4) the 
name of the country where the wool product was processed or 
manufactured.\4\ As part of its ongoing regulatory review program, the 
Commission published an Advance Notice of Proposed Rulemaking and 
Request for Public Comment (``ANPR'') in January 2012 \5\ seeking 
comment on the economic impact of, and the continuing need for, the 
Wool Rules. The ANPR sought comment generally on the Rules' benefits to 
consumers and burdens on businesses. It also asked about specific 
issues, including how to modify the Rules to implement the Wool Suit 
Fabric Labeling Fairness and International Standards Conforming Act 
(``Conforming Act''),\6\ and the costs and benefits of certain 
provisions of the Wool Act.
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    \1\ 15 U.S.C. 68-68j.
    \2\ Commission's Rules and Regulations under the Wool Products 
Labeling Act, 16 CFR part 300, which implement the Wool Act.
    \3\ Prior to issuing this NPRM, the Commission's staff provided 
guidance stating that a business located outside the United States 
can comply with the business name label disclosure requirement by 
disclosing the business name of the wool product manufacturer or the 
RN number or business name of a company in the United States that is 
directly involved with importing, distributing, or selling the 
product. For clarity, the Commission notes here that a business 
located outside the United States that engages in commerce subject 
to the Act (e.g., an exporter engaged in the sale, offering for 
sale, advertising, delivery, or transportation of a covered wool 
product in the United States) may also comply with this requirement 
by disclosing its own business name on the label. See 15 U.S.C. 68a 
and 68b(a)(2)(C) and 16 CFR 300.3.
    \4\ 15 U.S.C. 68b(a).
    \5\ 77 FR 4498 (January 30, 2012).
    \6\ Public Law 109-428, 120 Stat. 2913.
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    This Notice of Proposed Rulemaking (``NPRM'') summarizes the 
comments received and explains the Commission's decision to retain the 
Wool Rules. It also explains why the Commission proposes certain 
amendments and why it declines to propose others. Additionally, it 
poses questions soliciting comment. Finally, the NPRM sets forth the 
Commission's regulatory analyses under the Regulatory Flexibility and 
Paperwork Reduction Acts, as well as the text of the proposed 
amendments.

II. Summary of Comments

    The Commission received six comments \7\ in response to its ANPR: 
three from individuals; \8\ one from the Bureau Veritas CPS; \9\ one 
from the American Apparel & Footwear Association (``AAFA''); \10\ and a 
Joint Comment from five textile industry associations (``Joint 
Comment'').\11\ In addition, the Commission has decided to consider a 
comment filed in the ongoing Textile Rulemaking because it raises 
issues relevant to the Wool Rules.\12\
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    \7\ The comments are posted at http://www.ftc.gov/os/comments/woolanpr/index.shtm. The Commission has assigned each comment a 
number appearing after the name of the commenter and the date of 
submission. This notice cites comments using the last name of the 
individual submitter or the name of the organization, followed by 
the number assigned by the Commission.
    \8\ Anderson (6), Miller (7), Slavitt (4).
    \9\ Hargrave, Bureau Veritas (2).
    \10\ American Apparel & Footwear Association (5).
    \11\ American Manufacturing Trade Action Coalition, American 
Sheep Industry Association, Cashmere and Camel Hair Manufacturers 
Institute, the National Council of Textile Organizations, and the 
National Textile Association (3).
    \12\ Varley (3), available at http://www.ftc.gov/os/comments/textilerulesanpr/index.shtm.
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A. General Comments

    A number of commenters expressed general support for the Rules, 
citing their benefits or identifying deceptive practices that they 
address.\13\ For example, the Joint Comment noted a Cashmere and Camel 
Hair Manufacturers Institute study finding that, between 2004 and 2009, 
false labeling of cashmere and other superfine wool had decreased.\14\
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    \13\ AAFA (5), Anderson (6); Joint Comment (3).
    \14\ Joint Comment (3).
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    Several commenters, however, urged modification of the Rules. One 
suggested that the Commission remind firms ``that they are responsible 
for carrying out all necessary tests concerning the raw material and 
its processing if they want to be sure of the quality, correct 
labeling, and compliance with the Rules.'' \15\ Another advocated 
facilitating greater use of multi-lingual labeling without proposing 
any specific amendments.\16\
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    \15\ Id.
    \16\ Miller (7).
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    Two commenters favored harmonizing the regulation of wool and other 
textile products. One noted that having separate Textile and Wool Acts 
``leads to confusion and redundancy for U.S. companies.'' \17\ Another 
advocated

[[Page 57809]]

requiring disclosure of wool content only above a known quantity, such 
as 3% or 5%, which ``would bring the Wool Act closer in line with the 
Textile Fiber Products Identification Act requirements.'' \18\ It also 
noted that doing so ``would eliminate the need for declaring the wool 
content when we find wool in a decorative thread in a garment or . . . 
where the presence of wool is insignificant.'' \19\
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    \17\ AAFA (5).
    \18\ Hargrave, Bureau Veritas (2).
    \19\ Id.
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B. Treatment of Particular Fibers

    Several commenters focused on the Rules' treatment of particular 
fibers. One asked that the Rules cover yak fiber.\20\ Similarly, as 
part of a proposal to standardize animal fiber names, the Joint Comment 
recommended defining wool to include fine animal fibers such as yak and 
guanaco.\21\ The Joint Comment further asked that the Rules ``provide 
for precise classification of fibers that have come into commercial use 
in recent years such as jangir.'' \22\
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    \20\ Varley (Textiles, 3).
    \21\ Joint Comment (3) (proposing standardization regarding 
animal fiber names based on Annex I of the EU Regulation N. 1007/
2011).
    \22\ Id.
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    The Joint Comment also asked the Commission to clarify the labeling 
requirements for fiber from cashmere goats. In particular, it noted 
that the Act excludes ``coarse'' goat hair of a cashmere goat from the 
definition of ``cashmere'' \23\ and recommended allowing such fiber to 
be labeled as ``wool,'' ``fur fiber,'' or ``goat fiber.'' \24\
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    \23\ See 15 U.S.C. 68b(6).
    \24\ Joint Comment (3).
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C. International Harmonization

    The comments from industry trade associations focused on 
harmonizing the Wool Rules with international labeling requirements. 
The AAFA noted that ``lack of harmonization . . . forces products 
destined for multiple locations to contain a superfluous amount of 
information,'' which makes labeled clothing costly for manufacturers, 
and ``confusing for consumers and uncomfortable to wear.'' \25\
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    \25\ AAFA (5).
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    The Joint Comment also endorsed harmonization, noting that the 
Conforming Act was ``intended to conform U.S. labeling law for 
superfine wool to the International Wool Textile Organization (IWTO) 
Code of Practice.'' The Joint Comment thus recommended that the Rules: 
(1) Reference the most recent version of the IWTO Code; (2) standardize 
animal fiber names to correspond to ``actual use in the trade'' as 
reflected in Annex I of the European Union Regulation N. 1007/2011; and 
(3) limit the use of ``S'' numbers to wool.\26\ The Joint Comment, 
however, reported the lack of consensus in the trade regarding ``how 
the S numbers apply in the case of blends'' and suggested the 
Commission seek further comment and perhaps conduct an industry 
workshop.\27\
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    \26\ Joint Comment (3).
    \27\ Id.
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D. Testing

    Two comments addressed testing issues. Slavitt noted that testing 
to determine fiber type is inherently subjective and that laboratory 
results for a product can vary for a number of reasons, especially for 
blended wool products containing multiple fiber types. This commenter 
explained that blended fabrics are difficult to test and that 
processing and dyeing can alter the fabric. It cited the results of a 
2005 test conducted by the Cashmere and Camel Hair Manufacturer's 
Institute revealing that many laboratories misidentified fiber content. 
It noted that such imprecision has exposed manufacturers to ``abusive'' 
lawsuits.\28\ The commenter thus advocated the Rules provide a user-fee 
funded label certification program in which importers and distributors 
of wool products would have the accuracy of their product labels 
certified by the FTC as compliant with the Wool Act, to establish a 
complete defense to false advertising claims under the Lanham Act as 
well as state law counterparts.\29\ Slavitt also advocated that the 
Wool Rules permit labels to specify content at a disclosed point in 
time (e.g., before dyeing).\30\
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    \28\ Slavitt (4).
    \29\ Slavitt (4).
    \30\ Id.
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    Another comment addressed testing to determine fiber diameter. 
Specifically, the Joint Comment suggested specifying ASTM D 2130 for 
determining wool fiber diameter, noting that it corresponds to ISO 137-
projection microscope.\31\
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    \31\ Joint Comment (3).
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III. Proposed Amendments

    The record shows support for the Wool Rules from the textile 
industry and consumers. Among other things, these commenters stated the 
Rules benefit both businesses and consumers \32\ and help consumers 
make informed purchasing decisions based on truthful information.\33\ 
Indeed, no commenter opposed the Rules. There is no evidence that the 
Rules impose excessive costs on industry, including small businesses, 
or that the required disclosures are not important or material to 
consumers. On the basis of this record, the Commission concludes that a 
continuing need exists for the Wool Rules and that the public interest 
clearly requires retention of the Rules. Moreover, the Act directs the 
Commission to issue rules for the disclosure of information required by 
the Act.
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    \32\ AAFA (5), Joint Comment (3).
    \33\ AAFA (5), Anderson (6), Joint Comment (3).
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    Although the record supports retaining the Rules, it, along with 
the Commission's experience, supports modifying or clarifying a number 
of sections. In particular, the Wool Rules should reflect the Wool Act 
as amended in 2006 by the Conforming Act and align with the proposed 
amended Textile Rules.\34\ Accordingly, the Commission proposes 
amending the Rules regarding fiber content disclosures, country-of-
origin disclosures, and wool guaranties. In addition, as described 
below, the Wool Rules incorporate four provisions of the Textile Rules 
that the Commission has recently proposed amending, and thus would 
automatically incorporate any Textile Rules amendments the Commission 
adopts.
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    \34\ 78 FR 29263 (May 20, 2013).
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A. Fiber Content Disclosures

    The Commission proposes the following amendments to the Rules' 
fiber content disclosure provisions: (1) Incorporating the Wool Act's 
new definitions for cashmere and very fine wools; (2) clarifying Sec.  
300.20's descriptions of products containing virgin or new wool; and 
(3) revising Sec. Sec.  300.8(d) and 300.24(b) to allow certain hang-
tags disclosing fiber trademarks and performance even if they do not 
disclose the product's full fiber content.
1. Cashmere and Wool Products Made From Very Fine Wool
    The Conforming Act amended the Wool Act by defining ``cashmere'' 
and wool products composed of very fine wool (e.g., ``super 80s''). The 
following proposed amendments conform the Wool Rules to the amended 
Wool Act.
a. Cashmere
    The Wool Act now provides that a product ``stamped, tagged, 
labeled, or otherwise identified as cashmere'' is misbranded unless: 
(1) It is composed of fine (dehaired) undercoat fibers from a cashmere 
goat; (2) its fibers have an average diameter of no more than 19 
microns; and (3) it contains no more than 3 percent cashmere fibers 
with average diameters that exceed 30

[[Page 57810]]

microns.\35\ Accordingly, the Commission proposes incorporating the 
statutory definition of ``cashmere'' into Sec.  300.19.\36\
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    \35\ See 15 U.S.C. 68b(a)(6). The Act provides, however, that 
the average fiber diameter may be subject to a coefficient of 
variation around the mean that shall not exceed 24 percent. Id.
    \36\ The incorporated language would appear as new paragraph 
(a). The Commission also proposes redesignating the existing 
paragraphs (a) and (b) as paragraphs (b) and (c), respectively, with 
a conforming change to newly redesignated paragraph (b) to cross-
reference the definition of ``cashmere'' in new paragraph (a).
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    Relatedly, the Joint Comment asked how to label fiber from the hair 
of the cashmere goat that no longer qualifies as ``cashmere'' under the 
amended Wool Act. The Joint Comment urged the Commission to allow the 
flexibility to label such fiber as ``wool,'' ``goat fiber,'' or ``fur 
fiber.'' The Wool Act forecloses the Commission from allowing labels to 
describe fiber from a cashmere goat as anything other than ``wool'' or, 
in specified instances, ``cashmere.'' The Act defines ``wool'' to 
include fiber from sheep, lambs, or angora or cashmere goats and 
provides that it may include fibers from camels, alpacas, llamas, and 
vicunas.\37\ The Act further provides that fibers from the cashmere 
goat may be called ``cashmere'' only if they satisfy the three 
requirements outlined above.\38\ The statute thus does not authorize 
the Commission to allow sellers to label fibers from cashmere goats 
that do not meet the definition of cashmere as ``goat fiber,'' ``fur 
fiber,'' or any other name besides ``wool.'' Furthermore, such fibers 
cannot be labeled as ``fur fiber''--consistent with the Act's 
definition of ``wool,'' the term ``fur fiber'' is reserved for fibers 
from animals other than the sheep, lamb, angora goat, cashmere goat, 
camel, alpaca, llama, and vicuna.\39\ The Commission notes that nothing 
in the Act or the Rules would prohibit a label that properly discloses 
the product's wool content from also disclosing, in a non-deceptive 
manner, the type of animal that supplied the wool (e.g., wool 
consisting of goat fiber).
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    \37\ 15 U.S.C. 68(b).
    \38\ 15 U.S.C. 68b(a)(6). 
    \39\ See 16 CFR 300.8(g).
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b. Very Fine Wools
    The Conforming Act defined the average diameter of fibers required 
when labeling ``very fine wools.'' The Commission proposes to add a new 
Sec.  300.20a to incorporate these definitions. Commenters raised 
additional issues regarding such wools, but the record provides an 
insufficient basis for proposing changes to the Rules or Act. Thus, the 
Commission seeks further comment.
(1) Proposed New Sec.  300.20a
    The Conforming Act provides that wool products described by certain 
terms (e.g., ``Super 80's'' or ``80's,'' ``Super 90's'' or ``90's,'' 
``Super 100's'' or ``100's,'' ``Super 110's'' or ``110's,'' ``Super 
120's'' or ``120's,'' ``Super 130's'' or ``130's,'' etc.) are 
misbranded unless the wool fibers are of a certain fineness, defined in 
terms of the average diameter of the fiber. In essence, the amendment 
provides that any wool product described by one of these terms is 
misbranded unless the average diameter of the wool fiber is the number 
of microns specified in the Wool Act or finer.\40\
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    \40\ See 15 U.S.C. 68b(a)(5)(A)-(R).
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    To make the Rules consistent with the amended Wool Act, the 
Commission proposes adding a new section, 300.20a, entitled ``Labeling 
of very fine wool.'' This section would provide that wool products 
described by certain terms are misbranded unless the wool fibers 
comport with the amended Wool Act.
(2) Standards and Deviations
    The Conforming Act provides that, ``in each such case, the average 
fiber diameter of such wool product may be subject to such standards or 
deviations as adopted by regulation by the Commission.'' \41\ None of 
the commenters advocated that the Commission propose any such standards 
or deviations. Indeed, the Joint Comment noted that the Act already 
includes a tolerance for deviation because, for example, it defines 
``80's'' as having an average fiber diameter of 19.75 microns even 
though the international wool trade understands ``80's'' to refer to an 
average diameter of 19.5 microns. Thus, the Joint Comment contended, 
the Rules should not provide any additional tolerance. Because none of 
the comments advocated setting any standards or deviations, the record 
does not support doing so.
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    \41\ See 15 U.S.C. 68b(a)(5).
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(3) Incorporation of the International Wool Textile Organization Fabric 
Labeling Code of Practice
    The Joint Comment suggested incorporating the most recent version 
of the Fabric Labeling Code of Practice of the International Wool 
Textile Organization (``IWTO'') into the Rules and resolving any 
ambiguities in the Conforming Act. They argued that Congress intended 
to conform the United States labeling law for superfine wool to the 
Code of Practice, and that the latter has changed since the Conforming 
Act became law in 2006. After briefly describing the Code of Practice 
and the Joint Comment's reasons for incorporating it into the Wool 
Rules, the Commission explains why it declines to propose doing so.
    Unlike the Wool Act, the IWTO Code of Practice \42\ distinguishes 
between ``Pure Wool Fabrics'' and ``Wool Blend Fabrics'' when using the 
word ``Super.'' The Code of Practice provides that only Pure Wool 
Fabrics, which are made from pure new wool as well as wool blended with 
rare fibers (such as mohair, cashmere and alpaca) and silk, may be 
described by the word ``Super.'' \43\ By contrast, the Code of Practice 
states that Wool Blend Fabrics, which are other blended fabrics with 
wool content of at least 45%, can be described by the wool's ``S'' 
value (e.g., ``80's'') but not by the word ``Super.''
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    \42\ The Joint Comment, filed with the Commission on March 26, 
2012, did not include a copy of the Code of Practice or a link to 
the Code. The NPRM discusses the version of the IWTO Fabric Labeling 
Code of Practice printed from the Internet by Commission staff on 
May 23, 2012, available at http://www.ftc.gov/os/comments/woolanpr/130610woolcodepractice.pdf. The record does not indicate whether the 
version printed by Commission staff on May 23, 2012 is the same 
version of the Code as the one discussed in the Joint Comment.
    \43\ Such fabrics may include elasthane to give the fabric a 
stretch effect and up to 5% non-wool yarn for decoration.
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    The Joint Comment contended that the Code of Practice allows the 
use of ``S'' numbers to describe only the fineness of wool from sheep 
and lambs because other animal fibers with the same fineness may not 
have the same performance characteristics.\44\ In addition, although 
the Code of Practice allows the use of ``S'' numbers, but not the word 
``Super,'' to describe Wool Blend Fabrics, the Joint Comment noted that 
the industry does not agree on how marketers should use ``S'' numbers 
to describe blends. Therefore, the Joint Comment recommended that the 
Commission conduct a thorough study of this issue, including opening an 
additional comment period and possibly a workshop, before amending the 
Rules to address the use of ``S'' numbers to describe blends.
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    \44\ The Code of Practice does not appear to address this issue 
explicitly. In addressing the use of Super ``S'' descriptions for 
``Pure Wool Fabrics,'' the Code of Practice distinguishes between 
wool and ``rare fibres (such as mohair, cashmere and alpaca).'' The 
Act's definition of wool includes the hair of the Angora or Cashmere 
goat as well as the fibers from the hair of the camel, alpaca, 
llama, and vicuna. Thus, the Code of Practice appears to use the 
term ``wool'' more narrowly than does the Act.
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    Finally, the IWTO Code provides that the IWTO-8 (projection 
microscope) test method should be used to determine average fiber 
diameter.\45\
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    \45\ Although the Code of Practice refers to the IWTO-8 test 
method and the Joint Comment stated that the Rules should conform to 
the Code of Practice, the Joint Comment also stated that ASTM D 2130 
(corresponding to ISO 137--projection microscope) is the correct 
method for testing wool fiber. The record does not indicate whether 
and how the IWTO-8 test method differs from the ASTM D 2130 or ISO 
137 tests.

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[[Page 57811]]

    The Commission declines to conform the Rules to the current version 
of the IWTO Code of Practice for two reasons. First, the Commission 
lacks the legal authority to adopt many of the suggested amendments. 
The Conforming Act precisely defines the various categories of 
superfine wool fibers in wool products without distinguishing between 
``Pure Wool Fabrics'' and ``Wool Blend Fabrics'' as defined in the Code 
of Practice. For example, the Act allows marketers to describe a wool 
product, which may include fibers other than wool, as ``Super 80's'' or 
``80's'' where the diameter of the wool fiber averages 19.75 microns or 
finer, regardless of whether the fabric is ``Pure Wool'' or ``Wool 
Blend.'' It does not prohibit the use of these terms to describe wool 
products containing non-wool fibers. Moreover, the Wool Act does not 
distinguish between wool from sheep and lambs and the other types of 
wool.\46\ Thus, where the wool fiber of a product meets the ``Super'' 
or ``S'' criteria in the Act, the Commission lacks authority to 
prohibit, restrict, or require disclosures in connection with the use 
of ``Super'' or ``S'' numbers except where ``misbranded.''
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    \46\ See 15 U.S.C. 68(b) (defining ``wool'' as fiber from the 
fleece of the sheep or lamb, hair of the Angora or Cashmere goat, 
and fibers from the hair of the camel, alpaca, llama, and vicuna).
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    Of course, the use of ``Super'' or ``S'' numbers to describe a wool 
product in a manner that deceives consumers regarding the product's 
fiber content could result in ``misbranding'' under the Wool Act, which 
provides that a wool product is misbranded if it is deceptively 
stamped, tagged, labeled, or otherwise identified.\47\ The Rules 
require that non-required information on labels, including ``Super'' or 
``S'' numbers to indicate the fineness of the wool fibers in the wool 
product, ``shall not minimize, detract from, or conflict with required 
information and shall not be false, deceptive, or misleading.'' \48\ 
However, none of the commenters provided evidence regarding consumer 
understanding of the ``Super'' or ``S'' numbers. Thus, the Commission 
lacks any basis to propose amendments to restrict the use of ``Super'' 
or ``S'' numbers or to require disclosures to prevent consumer 
deception. The Commission seeks comment on whether and how wool 
products are being deceptively marketed using the ``Super'' or ``S'' 
numbers, and on the most effective way to amend the Rules to address 
any such deception, if it exists.
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    \47\ 15 U.S.C. 68b(a)(1).
    \48\ 16 CFR 300.10(b).
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    The Commission also declines to propose requiring the use of IWTO-8 
(projection microscope) or any other test method to measure the 
diameter of wool fibers. The record does not provide any information 
about the IWTO test method, let alone whether it is the only suitable 
test. Nor does the record provide evidence on how requiring a single 
test would impact competition and innovation. Under the FTC Act, 
marketers may substantiate their fiber diameter claims using any method 
that is competent and reliable.\49\
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    \49\ See ``FTC Policy Statement Regarding Advertising 
Substantiation,'' appended to Thompson Medical Co., 104 F.T.C. 648, 
839 (1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 
U.S. 1086 (1987), available at http://www.ftc.gov/bcp/guides/ad3subst.htm.
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    Finally, the Commission declines to propose amendments addressing 
wool fibers of differing fineness used in the warp and filling yarns of 
a fabric.\50\ Specifically, the Joint Comment urged the Commission to 
propose that the diameter of the fibers be averaged to determine the 
fineness. The record does not include any evidence, however, regarding 
consumer understanding of ``Super'' or ``S'' numbers in this context. 
Therefore, the Commission lacks any basis to propose the recommended 
amendments.
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    \50\ In fabric the warp yarns run vertically or lengthwise, 
while the weft or filling yarns run horizontally or crosswise.
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    The Commission, however, seeks comment on consumer perception of 
``Super'' or ``S'' numbers in these circumstances, and whether the 
Rules should address this issue. Moreover, the Commission notes that, 
although neither the Act nor the Rules require marketers to disclose 
the fineness of the wool fibers in wool products, they do prohibit 
using ``Super'' or ``S'' numbers on labels in a deceptive manner.
2. Clarification of Sec.  300.20 on ``Virgin'' or ``New'' Wool
    Section 300.20 states that the terms ``virgin'' or ``new'' should 
not be used to describe a product or any fiber or part thereof when the 
product or part so described is not wholly virgin or new. Although this 
section governs descriptions of any ``product, or any fiber or part 
thereof,'' (emphasis added), it expressly allows the use of the terms 
``virgin'' or ``new'' only in connection with ``the product or part so 
described,'' not the ``fiber.'' \51\ In other words, this provision 
could be interpreted to prohibit truthful fiber-content claims for 
virgin or new fiber.
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    \51\ For example, a product or part containing 50% new wool 
fibers could not be described as containing 50% ``new'' wool fibers 
because the product or part is not composed wholly of such fibers.
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    Prohibiting such truthful claims does not advance the goals of the 
Wool Act or protect consumers from deception, and prohibiting such 
claims was not the Commission's intent when it promulgated this 
provision. Although none of the commenters urged the Commission to 
clarify this section, informal inquiries received by the Commission 
staff suggest the need to do so. In addition, the Commission has 
proposed a similar clarification to Sec.  303.35 of the Textile Rules. 
Ensuring the consistency of the two provisions likely would minimize 
confusion and reduce compliance costs.\52\ Accordingly, the Commission 
proposes to amend Sec.  300.20 by adding the word ``fiber'' as set 
forth in section IX below so that this section states that the terms 
virgin or new shall not be used when the product, fiber or part so 
described is not composed wholly of new or virgin fiber.
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    \52\ 78 FR at 29268.
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3. Disclosure Requirements Applicable to Hang-Tags
    The Commission proposes to allow certain hang-tags with fiber 
trademarks and performance information, even if they do not disclose 
the product's full fiber content. Section 300.8(d), like Sec.  
303.17(b) of the Textile Rules, requires that a label disclose full 
fiber content for a product if a fiber's generic name or fiber 
trademark appears. In particular, Sec.  300.8(d) provides that where a 
generic name or a fiber trademark is used on any label, the label shall 
make a full fiber content disclosure with percentages.\53\
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    \53\ Similarly, Sec.  300.24(b) provides that, where a word, 
coined word, symbol or depiction which connotes or implies the 
presence of a fiber is used on any label, the label shall make a 
full a fiber content disclosure with percentages.
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    As demonstrated by the Textile review record, there are two reasons 
why the Rules should not require a full fiber content disclosure on a 
product hang-tag that uses a fiber trademark.\54\ First, requiring 
fiber percentages on hang-tags is redundant because the Rules mandate 
this information on the required textile label. Second, the requirement 
would likely impede the flow of truthful information to consumers. 
Fiber manufacturers who create hang-tags that provide important 
information about the performance characteristics of their fibers may 
not know the final composition of the fabric or wool product made with 
their fibers

[[Page 57812]]

because the final composition is determined by fabric manufacturers or 
apparel assemblers. In such instances, the disclosure requirement could 
prevent manufacturers from providing useful information to consumers.
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    \54\ 78 FR at 29267-29268.
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    The Commission notes, however, that consumers may mistakenly 
believe that the hang-tag provides full fiber content information. To 
address this concern, the Commission also proposes amending Sec. Sec.  
300.8(d) and 300.24(b) as set forth in section IX below to provide that 
hang-tags stating a fiber trademark or implying a fiber's presence 
without disclosing the product's full fiber content must disclose 
clearly and conspicuously that the hang-tag does not provide the 
product's full fiber content. The Commission seeks comment on this 
proposal, as well as on the most effective way to disclose that a hang-
tag omits a product's full fiber content.

B. Additional Proposed Amendments To Align Wool and Textile Rules

    The Commission also proposes amending the Wool Rules to conform the 
country of origin disclosures, provisions discussing ``invoice or other 
paper,'' and continuing guaranties to those of the proposed amended 
Textile Rules. Again, aligning the two Rules will serve the public 
interest by reducing compliance burdens and making fiber content 
disclosures more consistent. The Commission seeks comments on whether 
there is any reason not to do so.
    Finally, as discussed below, the Wool Rules incorporate two 
provisions of the Textile Rules that the Commission has recently 
proposed to amend. If finalized, these amendments will automatically 
change the provisions of the Wool Rules that incorporate the amended 
Textile Rules provisions.
1. Country-of-Origin Disclosures
    Section 300.25 effectuates the Wool Act's requirement that wool 
products have labels disclosing the country where they were processed 
or manufactured. This provision is essentially identical to Sec.  
303.33 of the Textile Rules. Both sections provide sample label 
disclosures for products completely made in the United States, products 
made in the United States using imported materials, and products 
partially manufactured in a foreign country and partially manufactured 
in the United States. To promote consistency with proposed changes to 
the Textile Rules, the Commission proposes to update Sec.  300.25(d) to 
state that an imported product's country of origin as determined under 
the laws and regulations enforced by U.S. Customs and Border Protection 
(``Customs'') shall be the country where the product was processed or 
manufactured. The Commission also proposes to update Sec.  300.25(f) by 
removing the outdated reference to the Treasury Department and instead 
referencing any Tariff Act and the regulations promulgated thereunder.
    These changes will also reduce potential conflict with the very 
detailed rules of origin in Customs law.\55\ Customs law has changed 
since the Commission issued the Textile Rules, and the proposed 
amendment reflects this change.
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    \55\ See 19 U.S.C. 3592 and 78 FR at 29268-29269.
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    Aside from issues relating to the determination of where an 
imported product was manufactured or processed, the Commission notes 
that, under some circumstances, the Act and the Rules require 
disclosures in addition to, but not in conflict with, those required by 
Customs. For example, if an imported product is partially manufactured 
in the United States, Sec.  300.25(a)(4) requires the label to disclose 
the manufacturing process in the foreign country and in the United 
States.\56\
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    \56\ This provision lists several examples of such disclosures, 
such as ``Made in [foreign country], finished in USA.''
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2. Invoice or Other Paper
    The Commission proposes revising three sections of the Rules 
relating to the definition of ``invoice or other paper'' and the 
guaranty provisions that reference this term--300.1(j), 300.32(a), and 
300.33(c)--to conform to the proposed amended Textile Rules. The 
changes would clarify the Rules' application to electronic as well as 
paper documents. Furthermore, the Commission's proposed amendments to 
the Textile Rules pertaining to guaranties and documents transmitted 
and preserved electronically affect the Wool Rules because the Wool 
Rules incorporate those sections by reference.
    The Commission proposes amending the definition of ``invoice or 
other paper'' in Wool Rules Sec.  300.1(j) by changing it to ``invoice 
or other document.'' The Commission also proposes amending Sec. Sec.  
300.32(a) and 300.33(c), which relate to guaranties, to replace 
``invoice or other paper'' with ``invoice or other document'' where 
these terms appear. These amendments would clarify the fact that the 
Rules apply to electronic as well as paper documents. Finally, Sec.  
300.1(j), which defines the above terms, currently incorporates the 
definition in Sec.  303.1(h) of the Textile Rules and would continue to 
do so. The Commission has proposed amending the definition in Textile 
Rules Sec.  303.1(h) to clarify that invoices and other documents may 
be preserved electronically. Specifically, the Commission proposed 
replacing the word ``paper'' with the word ``document'' in the defined 
terms ``invoice'' and ``invoice or other document.'' \57\ It also 
proposed revising the definition of these terms to clarify that they 
include documents capable of being accurately reproduced for later 
reference, whether in electronic or paper form.\58\ The Commission 
seeks comment on other ways it could amend the Rules to better address 
electronic commerce subject to the Wool Act.
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    \57\ Section 303.1(h).
    \58\ See 78 FR at 29269-29270.
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3. Continuing Guaranties
    Consistent with its proposed amendments to the Textile Rules, the 
Commission proposes modifying Sec.  300.33(a)(3) to address continuing 
guaranties.\59\ Specifically, the Commission proposed modifying the 
Textile Rules form (FTC Form 31-A) referenced by this section by 
replacing the requirement that filers sign under penalty of perjury 
with a certification requirement and by providing that such guaranties 
continue in effect for one year unless revoked earlier.\60\
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    \59\ In addition, Sec.  300.33(b) states that the continuing 
guaranty form is found in Sec.  303.38(b) of the Textile Rules.
    \60\ Thus, the proposed modification of the form also would 
revise the Wool Rules by incorporation.
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    The Wool Act provides that a business can avoid liability for 
selling a misbranded wool product if it in good faith receives a 
guaranty from a domestic supplier that the product is not 
misbranded.\61\ One form of such guaranty is a continuing guaranty. 
These guaranties are set forth in a form filed with the Commission 
stating that the supplier guarantees that none of the wool products it 
handles are misbranded under the Wool Act and Rules. Like Sec.  
303.38(a)(2) of the Textile Rules, Sec.  300.33(a)(3) of the Wool Rules 
provides that guaranties filed with the Commission continue in effect 
until revoked. The Commission has proposed amending Sec.  303.38(b) of 
the Textile Rules to modify the continuing guaranty form set forth 
therein by replacing the requirement that sellers sign it under penalty 
of perjury with a requirement that they certify that they will actively 
monitor and ensure compliance with the applicable Act and Rules (the

[[Page 57813]]

Textile, Wool, and/or Fur Acts). The Commission also has proposed 
modifying the provision so that the guaranty continues in effect for 
one year unless revoked earlier.\62\ Because Sec.  300.33(b) of the 
Wool Rules incorporates this form, adoption of this proposed amendment 
to the Textile Rules would effectively revise the Wool Rules without 
further Commission action.
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    \61\ 15 U.S.C. 68g provides that a person relying on a guaranty, 
received in good faith, that a product is not misbranded from a 
guarantor residing in the United States will not be liable under the 
Act.
    \62\ 78 FR at 29270-29271.
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    The Commission proposes to eliminate the penalty-of-perjury 
requirement because swearing to future events is problematic and may 
present enforcement issues. In addition, the Commission recognizes that 
many people who intend to comply with the Rules may be understandably 
reluctant to swear to a future event. However, continuing guaranties 
must provide sufficient indicia of reliability to permit buyers to rely 
on them on an ongoing basis. The perjury language was included to 
address this concern.
    To address these concerns, the Commission proposes replacing the 
perjury language with a certification requirement. The Commission 
proposes requiring guarantors to acknowledge that providing a false 
guaranty is unlawful, and to certify that they will actively monitor 
and ensure compliance with the applicable law. This requirement should 
focus guarantors' attention on and underscore their obligation to 
comply, thereby increasing a guaranty's reliability. However, it would 
not impose additional burdens on guarantors because they would simply 
be acknowledging the statutory prohibition against false guaranties 
\63\ and certifying to the monitoring in which they already must engage 
to ensure that they do not provide false guaranties. In addition, the 
required statements would benefit recipients of guaranties by 
bolstering the basis of their good-faith reliance on the guaranties. 
Finally, the acknowledgement and certification may facilitate 
enforcement action against those who provide false guaranties.
---------------------------------------------------------------------------

    \63\ The Textile Act provides that furnishing a false guaranty 
is unlawful, an unfair method of competition, and an unfair and 
deceptive act or practice under the FTC Act. 15 U.S.C. 70h(b). The 
Wool Act includes a similar provision. 15 U.S.C. 68g(b).
---------------------------------------------------------------------------

    To further ensure the reliability of continuing guaranties, the 
Commission also proposes requiring them to be renewed annually by 
providing that they continue in effect for one year unless revoked 
earlier. Annual renewal should encourage guarantors to take regular 
steps to ensure that they remain in compliance with the Act and Rules 
over time and thereby increase the guaranties' reliability. This 
requirement would not likely impose significant costs because it 
involves the sending of a relatively simple one-page form containing 
information very similar, if not identical, to that provided on the 
guarantor's last continuing guaranty form.
    As noted above, to implement the new certification requirement, the 
Commission proposed revising FTC Form 31-A set forth in Textile Rules 
Sec.  303.38(b) by including a certification applicable to Wool Act 
guaranties.\64\ The Commission also proposed revising the form to 
include similar certifications for products subject to the Textile Act 
and the Fur Products Labeling Act.\65\ Section 300.33(b) of the Wool 
Rules would continue to incorporate Sec.  303.38(b) as amended. The 
Commission also proposes amending Sec.  300.33(a)(3) to provide that 
these guaranties continue in effect for one year unless revoked 
earlier.
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    \64\ The certification would provide: Under the Wool Products 
Labeling Act (15 U.S.C. 68-68j): The company named above, which 
manufactures, markets, or handles wool products: (1) Guarantees that 
any wool product it sells, ships, or delivers will not be 
misbranded; (2) acknowledges that furnishing a false guaranty is an 
unlawful unfair and deceptive act or practice pursuant to the 
Federal Trade Commission Act; and (3) certifies that it will 
actively monitor and ensure compliance with the Wool Products 
Labeling Act and rules and regulations issued under the Act during 
the duration of the guaranty.'' 78 FR at 29278.
    \65\ 15 U.S.C. 69-69k.
---------------------------------------------------------------------------

    The Commission seeks comment on these proposals, including on 
whether the guaranties should expire and, if so, whether suppliers 
should have to renew them annually or at some other interval, and the 
wording of the above certification.\66\
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    \66\ Based on its enforcement experience, the Commission finds 
it in the public interest to provide protections for retailers that: 
(1) Cannot legally obtain a guaranty under the Act; (2) do not 
embellish or misrepresent claims provided by the manufacturer 
related to the Act or Rules; and (3) do not market the products as 
private label products; unless the retailers knew or should have 
known that the marketing or sale of the products would violate the 
Act or Rules. Such protections provide greater consistency for 
retailers regardless of whether they directly import products or use 
third-party domestic importers. Accordingly, on January 3, 2013, the 
Commission announced an enforcement policy statement providing that 
it will not bring enforcement actions against retailers that meet 
the above criteria. See Enforcement Policy Regarding Certain 
Imported Textile, Wool, and Fur Products, available at http://www.ftc.gov/opa/2013/01/eps.shtm.
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4. Other Proposed Amendments to Textile Rules Incorporated by the Wool 
Rules
    The Commission has proposed amending two other provisions of the 
Textile Rules that the Wool Rules incorporate: Sec.  303.7, which 
addresses generic names of manufactured fibers; and Sec.  303.12, which 
addresses trimmings.\67\
---------------------------------------------------------------------------

    \67\ See 78 FR at 29265-29267.
---------------------------------------------------------------------------

    Section 300.8(b) of the Wool Rules incorporates by reference the 
generic names and definitions for manufactured fibers in Sec.  303.7 of 
the Textile Rules, including the names and definitions in the 
International Organization for Standardization (``ISO'') standard 
titled ``Textiles--Man-made fibres--Generic names,'' 2076:1999(E). 
Since incorporating this standard in 2000, the ISO standard has been 
updated and is now identified as ISO 2076: 2010(E).
    Based on the record in the Textile Rules regulatory review, the 
Commission proposed to amend Sec.  303.7 to incorporate the revised ISO 
standard.\68\ If the Commission does so, the change will apply to the 
Wool Rules automatically.
---------------------------------------------------------------------------

    \68\ See 78 FR at 29265-29266.
---------------------------------------------------------------------------

    In addition, Sec.  300.1(k), the definition of trimmings, 
incorporates Textile Rules Sec.  303.12. The Commission has proposed 
clarifying Sec.  303.12 in ways that would not appear to impact the 
Wool Rules because the Wool Act does not exempt trimmings from its 
disclosure requirements.

IV. Amendments the Commission Declines To Propose

A. Fiber Standardization Proposals

    The Joint Comment, noting that Annex I of the EU Regulation N. 
1007/2011 defines wool to include fiber from animals such as yak and 
guanaco not mentioned in the Wool Act, proposed including fiber from 
these animals in the definition of wool.\69\ In addition, it explained 
that the ``Rules do not now adequately provide for precise 
classification of fibers that have come into commercial use in recent 
years such as jangir.'' \70\
---------------------------------------------------------------------------

    \69\ Joint Comment (3). Another commenter similarly advocated 
amending the Rules to define yak fiber as wool. Varley (Textiles, 
3).
    \70\ Joint Comment (3).
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    The Commission cannot amend the Rules to define yak, guanaco, 
jangir, or other fibers as wool. The Wool Act defines wool, and the 
Commission lacks authority to expand the Act's definition.\71\
---------------------------------------------------------------------------

    \71\ 15 U.S.C. 68(b) (The term ``wool'' means the fiber from the 
fleece of the sheep or lamb, hair of the Angora or Cashmere goat, 
and fibers from the hair of the camel, alpaca, llama, and vicuna).
---------------------------------------------------------------------------

B. Testing Methods and Label Certification

    Two commenters suggested that the Commission either amend the Rules 
to specify test methods for identifying or

[[Page 57814]]

measuring fibers or create a label certification program. For example, 
one proposed a user-fee funded ``label certification program [that] 
would allow an importer or distributor of a wool product to establish 
the accuracy of its product labels either by the submission of fiber 
testing or by other means, such as through the submission of supply-
chain documentation, sufficient to establish the fiber contents of the 
wool product and the accuracy of the label.'' \72\
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    \72\ Slavitt (4); see also Joint Comment (recommending that the 
Rules ``give precise indications as far as testing methods to assure 
conformity with the 2006 amendments'' and stating that ASTM D 2130 
(corresponding to ISO 137--projection microscope) is the correct 
method).
---------------------------------------------------------------------------

    The Commission declines to propose requiring a specific testing 
methodology for identifying fiber or measuring fiber diameter. As noted 
above, the record contains no credible evidence that the failure to 
specify the use of certain testing methods has resulted in deception or 
confusion. Moreover, the Commission's establishment of testing methods 
could impede competition and innovation by foreclosing the market from 
choosing the most effective or efficient testing methods available. 
Similarly, the record does not indicate that the benefits of a label 
certification program would exceed the costs.

C. Other Suggested Changes

    The Commission declines to propose modifying the Rules to create a 
de minimis wool content exception or change the Rules' treatment of 
language requirements.
    Regarding the proposed de minimis wool content exception,\73\ the 
Wool Act requires that labels disclose the wool content of any product 
that contains any wool.\74\ Thus, the Act prevents the Commission from 
exempting products that contain even de minimis quantities of wool.
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    \73\ One commenter suggested that ``[r]ather than the current 
requirement of having to declare even the slightest amount of wool 
if present, the verbiage could be changed to specify a known 
quantity such as 3% or 5%. That would eliminate the need for 
declaring the wool content when we find wool in a decorative thread 
in a garment or similar, where the presence of wool is 
insignificant.'' Hargrave, Bureau Veritas (2).
    \74\ 15 U.S.C. 68(d) (The term ``wool product'' means any 
product which contains, purports to contain, or in any way is 
represented as containing wool or recycled wool).
---------------------------------------------------------------------------

    Another commenter suggested amending the Wool Act to facilitate 
multi-lingual labeling, but did not propose specific amendments to 
accomplish this goal.\75\ Because only Congress has authority to amend 
a statute, the Commission interpreted this commenter as suggesting 
modifying the Wool Rules to facilitate such labeling. The Commission 
declines to propose amending the Rules to address this issue. As the 
commenter notes, the industry already has the option of using multi-
lingual labels. The record provides no evidence that the Rules have 
impeded or discouraged the use of such labels. Furthermore, adoption of 
specific standards for voluntary disclosure of information in multiple 
languages might prevent firms from adjusting efficiently to new methods 
of labeling that could impede multi-lingual labels. For example, a 
specified format that takes up more space on a label than alternative 
formats could discourage marketers from disclosing fiber content in 
multiple languages. The Commission, however, will continue to ensure 
that its educational materials regarding the Act and Rules stress the 
benefits of such labeling and, where possible, suggest ways of making 
multi-language disclosures in a non-deceptive manner.
---------------------------------------------------------------------------

    \75\ Miller (7).
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 V. Request for Comments

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before November 25, 
2013. Write ``Wool Rules, 16 CFR Part 300, Project No. P124201'' on 
your comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, such as anyone's Social Security 
number, date of birth, driver's license number or other state 
identification number or foreign country equivalent, passport number, 
financial account number, or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is . . . privileged or confidential,'' as discussed in Sec.  6(f) 
of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\76\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \76\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/woolrulesnprm, by following the instruction on the web-based form. 
If this Notice appears at http://www.regulations.gov, you also may file 
a comment through that Web site.
    If you file your comment on paper, write ``Wool Rules, 16 CFR Part 
300, Project No. P124201'' on your comment and on the envelope, and 
mail or deliver it to the following address: Federal Trade Commission, 
Office of the Secretary, Room H-113 (Annex Q), 600 Pennsylvania Avenue 
NW., Washington, DC 20580. If possible, submit your paper comment to 
the Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
NPRM and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding, as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before November 25, 2013. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
    The Commission invites members of the public to comment on any 
issues or concerns they believe are relevant or appropriate to the 
Commission's consideration of proposed amendments to the Textile Rules. 
The Commission requests that comments provide the factual data upon 
which they are based. In addition to the issues raised above, the 
Commission solicits public

[[Page 57815]]

comment on the costs and benefits to industry members and consumers of 
each of the proposals as well as 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.
Questions
    1. General Questions on Amendments: To maximize the benefits and 
minimize the costs for buyers and sellers (including specifically small 
businesses), the Commission seeks views and data on the following 
general questions for each of the proposed changes described in this 
notice:
    (A) What benefits would each proposed change confer and on whom? 
The Commission in particular seeks any information on the benefits each 
change would confer on consumers of wool products.
    (B) What costs or burdens would each proposed change impose and on 
whom? The Commission in particular seeks any information on any burden 
each change would impose on small businesses.
    (C) What regulatory alternatives to the proposed changes are 
available that would reduce the burdens of the proposed changes while 
providing the same benefits?
    (D) What evidence supports your answers?
    2. ``Super'' and ``S'' numbers:
    (A) To what extent do labels use ``Super'' or ``S'' numbers to 
describe wool products containing very fine wool?
    (B) How do consumers interpret ``Super'' and ``S'' numbers?
    (C) Should the Commission amend the Rules to address labeling using 
the ``Super'' and ``S'' numbers to describe wool products containing 
very fine wool? If so, why and how? If not, why?
    (D) What evidence supports your answers?
    3. Hang-tags and Fiber Content Disclosures:
    (A) Would the proposed amendments to Sec. Sec.  300.8 and 300.24 
allowing hang-tags without full fiber content disclosures under certain 
circumstances affect the extent to which consumers are informed about 
the full fiber content of wool products? If so, how?
    (B) Would the proposed disclosure (i.e., ``This tag does not 
disclose the product's full fiber content'' or ``See label for the 
product's full fiber content'') prevent deception or confusion 
regarding fiber content? If so, how? If not, why not? Should the 
Commission provide different or additional examples of the required 
hang-tag disclosures? If so, what?
    (C) What evidence supports your answers?
    4. Electronic Transmittal and Guaranties:
    (A) Do the Wool Rules and the proposed changes to the guaranty 
provisions in Sec. Sec.  300.32 and 300.33 provide sufficient 
flexibility for compliance using electronic transmittal of guaranties? 
If so, why and how? If not, why not?
    (B) Should the Commission adopt a certification requirement for 
continuing guaranties filed with the Commission pursuant to Sec.  
300.33? If so, why and how? If not, why not?
    (C) Should the Rules require guarantors providing a continuing 
guaranty to renew the certification annually or at some other interval? 
If so, why? If not, why not? To what extent would requiring guarantors 
to renew certifications annually increase costs?
    (D) What evidence supports your answers?
    5. Conformity to the Textile Rules:
    (A) Are there any differences between wool products and other 
textile fiber products suggesting that the Commission should not 
conform the Wool Rules to the Textile Rules as proposed?
    (B) Are there any differences between wool products and other 
textile fiber products suggesting that the Commission should amend 
provisions of the Wool Rules incorporating provisions of the Textile 
Rules so that the Commission's proposed amendments to the Textile Rules 
do not modify these provisions of Wool Rules?
    (C) What evidence supports your answers?

VI. Communications to Commissioners and Commissioner Advisors by 
Outside Parties

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding from any 
outside party to any Commissioner or Commissioner's advisor will be 
placed on the public record.\77\
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    \77\ See CFR 1.26(b)(5).
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VII. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') \78\ requires that the 
Commission conduct an analysis of the anticipated economic impact of 
the proposed amendments on small entities. The purpose of a regulatory 
flexibility analysis is to ensure that an agency considers the impacts 
on small entities and examines regulatory alternatives that could 
achieve the regulatory purpose while minimizing burdens on small 
entities. Section 605 of the RFA \79\ 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.
---------------------------------------------------------------------------

    \78\ 5 U.S.C. 601-612.
    \79\ 5 U.S.C. 605.
---------------------------------------------------------------------------

    The Commission believes that the proposed amendments would not have 
a significant or disproportionate economic impact upon small entities 
that manufacture or import wool products, including their compliance 
costs, although it may affect a substantial number of small businesses. 
The Commission proposes a few limited amendments designed to conform 
the Rules to the Wool Act as amended by the Conforming Act, clarify the 
Rule, provide more options for disclosing fiber trademarks and 
performance information on hang-tags, and update the Rules' guaranty 
provisions. Therefore, based on available information, the Commission 
certifies that amending the Rules as proposed will not have a 
significant economic impact on a substantial number of small 
businesses.
    Although the Commission certifies under the RFA that the proposed 
amendments would not, if promulgated, have a significant impact on a 
substantial number of small entities, the Commission has determined, 
nonetheless, that it is appropriate to publish an Initial Regulatory 
Flexibility Analysis to inquire into the impact of the proposed 
amendments on small entities. Therefore, the Commission has prepared 
the following analysis:

A. Description of the Reasons That Action by the Agency Is Being Taken

    In response to public comments, the Commission proposes amending 
the Rules to conform them to the Wool Act as amended by the Conforming 
Act and to respond to changed commercial practices.

B. Statement of the Objectives of, and Legal Basis for, the Proposed 
Amendments

    The objective of the proposed amendments is to conform them to the 
Wool Act as amended by the Conforming Act; clarify the Rules; allow 
manufacturers and importers to disclose fiber trademarks and 
information about fiber performance on certain hang-tags affixed to 
wool products without including the product's full fiber content 
information on the hang-tag; and clarify and update the Rules' guaranty 
provisions. The Wool Act authorizes the Commission to

[[Page 57816]]

implement its requirements through the issuance of rules.

C. Small Entities to Which the Proposed Amendments Will Apply

    The Rules apply to various segments of the wool product industry, 
including manufacturers and wholesalers of wool products. Under the 
Small Business Size Standards issued by the Small Business 
Administration, wool apparel manufacturers qualify as small businesses 
if they have 500 or fewer employees. Clothing wholesalers qualify as 
small businesses if they have 100 or fewer employees.
    The Commission's staff has estimated that approximately 8,000 wool 
product manufacturers and importers are covered by the Rules' 
disclosure requirements.\80\ A substantial number of these entities 
likely qualify as small businesses. The Commission estimates that the 
proposed amendments will not have a significant impact on small 
businesses because they have an existing obligation to comply with 
statutory labeling requirements, and the proposed amendments provide 
covered entities with additional labeling options without imposing 
significant new burdens or additional costs. For example, businesses 
that prefer not to affix a hang-tag disclosing a fiber trademark 
without disclosing the product's full fiber content need not do so. 
There is also no evidence that the proposal to make continuing guaranty 
certifications expire after one year would significantly burden 
businesses that choose to provide a guaranty. Providing a new 
continuing guaranty each year would likely entail minimal additional 
costs, especially if the business provides the guaranty electronically 
or as part of a paper invoice that it would have sent to the buyer in 
any event. In addition, the new guaranty would consist of a relatively 
simple one-page form including information very similar, if not 
identical, to that provided on the guarantor's last continuing guaranty 
form. Moreover, the change from ``invoice or other paper'' to ``invoice 
or other document'' makes that requirement format-neutral and gives 
covered entities, including small businesses, more flexibility in terms 
of compliance.
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    \80\ Federal Trade Commission: Agency Information Collection 
Activities; Proposed Collection; Comment Request, 76 FR 77230 (Dec. 
12, 2011).
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    The Commission seeks comment and information with regard to the 
estimated number or nature of small business entities for which the 
proposed amendments would have a significant impact.

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements, Including Classes of Covered Small Entities and 
Professional Skills Needed To Comply

    The small entities potentially covered by the proposed amendments 
will include all such entities subject to the Rules. The professional 
skills necessary for compliance with the Rules as modified by the 
proposed amendments would include office and administrative support 
supervisors to determine label content and clerical personnel to draft 
and obtain labels and keep records. The Commission invites comment and 
information on these issues.

E. Duplicative, Overlapping, or Conflicting Federal Rules

    The Commission has not identified any other federal statutes, 
rules, or policies that would duplicate, overlap, or conflict with the 
proposed amendments. The Commission notes that any failure to conform 
the Wool Rules to the Textile Rules would likely create compliance 
problems for businesses because their obligations could vary 
significantly depending on whether a product contains as little as one 
wool fiber. The Commission invites comment and information on this 
issue.

F. Significant Alternatives to the Proposed Amendments

    The Commission has not proposed any specific small entity exemption 
or other significant alternatives, as the proposed amendments simply 
conform the Rules to the Wool Act as amended by the Conforming Act; 
clarify the Rules; allow manufacturers and importers to disclose fiber 
trademarks and information about fiber performance on certain hang-tags 
affixed to wool products without including the product's full fiber 
content information on the hang-tag; and clarify and update the Rules' 
guaranty provisions by, among other things, replacing the requirement 
that suppliers providing a guaranty sign under penalty of perjury with 
a certification requirement that must be renewed every year. Under 
these limited circumstances, the Commission does not believe a special 
exemption for small entities or significant compliance alternatives are 
necessary or appropriate to minimize the compliance burden, if any, on 
small entities while achieving the intended purposes of the proposed 
amendments.
    Nonetheless, the Commission seeks comment and information on the 
need, if any, for alternative compliance methods that would reduce the 
economic impact of the Rules on small entities. If the comments filed 
in response to this NPRM identify small entities that would be affected 
by the proposed amendments, as well as alternative methods of 
compliance that would reduce the economic impact of the proposed 
amendments on such entities, the Commission will consider the 
feasibility of such alternatives and determine whether they should be 
incorporated into the final Rules. As explained above, the Commission 
considered a number of alternative amendments advocated by commenters 
and decided not to propose them.

VIII. Paperwork Reduction Act

    The Rules contain various ``collection of information'' (e.g., 
disclosure and recordkeeping) requirements for which the Commission has 
obtained OMB clearance under the Paperwork Reduction Act (``PRA'').\81\ 
As discussed above, the Commission proposes: (a) Conforming the Rules 
to the Wool Act as amended by the Conforming Act by revising Sec.  
300.19 and adding Sec.  300.20a; (b) clarifying the Rules, including 
Sec. Sec.  300.1(j), 300.20, 300.25(d) and (f), 300.32(a), and 
300.33(c); (c) amending Sec. Sec.  300.8(d) and 300.24(b) to allow 
manufacturers and importers to disclose fiber generic names and 
trademarks and information about fiber performance on certain hang-tags 
affixed to wool products without including the product's full fiber 
content information on the hang-tag; and (d) amending Sec.  
300.33(a)(3) to provide that continuing guaranties filed with the 
Commission expire after one year.
---------------------------------------------------------------------------

    \81\ 44 U.S.C. 3501 et seq. On March 26, 2012, OMB granted 
clearance through March 31, 2015, for these requirements and the 
associated PRA burden estimates. The OMB control number is 3084-
0100.
---------------------------------------------------------------------------

    These proposed amendments do not impose any significant additional 
collection of information requirements. For example, amending the Rules 
to conform to the Wool Act, as amended by the Conforming Act, would not 
impose any new requirements because businesses already must comply with 
the Wool Act. Businesses that prefer not to affix a hang-tag disclosing 
a fiber name or trademark without disclosing the product's full fiber 
content need not do so. The proposal that continuing guaranty 
certifications expire after one year would likely impose minimal 
additional costs on businesses that choose to provide a guaranty. 
Providing a new continuing guaranty each year would likely entail 
minimal costs, especially if the business provides the

[[Page 57817]]

guaranty electronically or as part of a paper invoice that it would 
have sent to the buyer in any event.

IX. Proposed Rule Language

List of Subjects in 16 CFR Part 300

    Labeling, Trade practices, Wool Products Labeling Act.

    For the reasons set forth above, the Commission proposes to amend 
16 CFR Part 300 as follows:

PART 300--RULES AND REGULATIONS UNDER THE WOOL PRODUCTS LABELING 
ACT OF 1939

0
1. The authority citation is revised to read as follows:

    Authority: 15 U.S.C. 68-68j.

0
2. Amend Sec.  300.1 by revising paragraphs (a) and (j) to read as 
follows:


Sec.  300.1  Terms defined.

    (a) The term Act means the Wool Products Labeling Act of 1939, 15 
U.S.C. 68 et seq., as amended by Public Law 96-242, 94 Stat. 344, and 
Public Law 109-428, 120 Stat. 2913.
* * * * *
    (j) The terms invoice and invoice or other document have the 
meaning set forth in Sec.  303.1(h) of this chapter.
* * * * *
0
3. Amend Sec.  300.8 by revising paragraph (d) to read as follows:


Sec.  300.8  Use of fiber trademark and generic names.

* * * * *
    (d) Where a generic name or a fiber trademark is used on any label, 
whether required or non-required, a full fiber content disclosure with 
percentages shall be made in accordance with the Act and regulations. 
Where a generic name or a fiber trademark is used on any hang-tag 
attached to a wool product that has a label providing required 
information and the hang-tag provides non-required information, such as 
a hang-tag stating only a generic fiber name or trademark or providing 
information about a particular fiber's characteristics, the hang-tag 
need not provide a full fiber content disclosure; however, if the wool 
product contains any fiber other than the fiber identified by the 
generic fiber name or trademark, the hang-tag must disclose clearly and 
conspicuously that it does not provide the product's full fiber 
content; for example:
    ``This tag does not disclose the product's full fiber content.'' or
    ``See label for the product's full fiber content.''
* * * * *
0
4. Revise Sec.  300.19 to read as follows:


Sec.  300.19  Use of terms ``mohair'' and ``cashmere.''

    (a) In setting forth the required fiber content of a wool product, 
the term ``cashmere'' may be used for such fiber content only if: (1) 
Such fiber consists of the fine (dehaired) undercoat fibers produced by 
a cashmere goat (capra hircus laniger); (2) the average diameter of 
such cashmere fiber does not exceed 19 microns; and (3) the cashmere 
fibers in such wool product contain no more than 3 percent (by weight) 
of cashmere fibers with average diameters that exceed 30 microns. The 
average fiber diameter may be subject to a coefficient of variation 
around the mean that shall not exceed 24 percent.
    (b) In setting forth the required fiber content of a product 
containing hair of the Angora goat known as mohair or containing 
cashmere (as defined in paragraph (a) of this section), the term 
``mohair'' or ``cashmere,'' respectively, may be used for such fiber in 
lieu of the word ``wool,'' provided the respective percentage of each 
such fiber designated as ``mohair'' or ``cashmere'' is given, and 
provided further that such term ``mohair'' or ``cashmere'' where used 
is qualified by the word ``recycled'' when the fiber referred to is 
``recycled wool'' as defined in the Act. The following are examples of 
fiber content designations permitted under this rule:

50% mohair--50% wool
60% recycled mohair--40% cashmere
60% cotton--40% recycled cashmere

    (c) Where an election is made to use the term ``mohair'' or 
``cashmere'' in lieu of the term ``wool'' as permitted by this section, 
the appropriate designation of ``mohair'' or ``cashmere'' shall be used 
at any time reference is made to such fiber in either required or 
nonrequired information. The term ``mohair'' or ``cashmere'' or any 
words, coined words, symbols or depictions connoting or implying the 
presence of such fibers shall not be used in non-required information 
on the required label or on any secondary or auxiliary label attached 
to the wool product if the term ``mohair'' or ``cashmere'' as the case 
may be does not appear in the required fiber content disclosure.
0
5. Revise Sec.  300.20 to read as follows:


Sec.  300.20  Use of the terms ``virgin'' or ``new.''

    The terms ``virgin'' or ``new'' as descriptive of a wool product, 
or any fiber or part thereof, shall not be used when the product, fiber 
or part so described is not composed wholly of new or virgin fiber 
which has never been reclaimed from any spun, woven, knitted, felted, 
braided, bonded, or otherwise manufactured or used product.
0
6. Add a new Sec.  300.20a to read as follows:


Sec.  300.20a  Labeling of very fine wool.

    A wool product stamped, tagged, labeled, or otherwise identified in 
the manner described below is mislabeled:
    (a) ``Super 80's'' or ``80's,'' if the average diameter of wool 
fiber of such wool product does not average 19.75 microns or finer;
    (b) ``Super 90's'' or ``90's,'' if the average diameter of wool 
fiber of such wool product does not average 19.25 microns or finer;
    (c) ``Super 100's'' or ``100's,'' if the average diameter of wool 
fiber of such wool product does not average 18.75 microns or finer;
    (d) ``Super 110's'' or ``110's,'' if the average diameter of wool 
fiber of such wool product does not average 18.25 microns or finer;
    (e) ``Super 120's'' or ``120's,'' if the average diameter of wool 
fiber of such wool product does not average 17.75 microns or finer;
    (f) ``Super 130's'' or ``130's,'' if the average diameter of wool 
fiber of such wool product does not average 17.25 microns or finer;
    (g) ``Super 140's'' or ``140's,'' if the average diameter of wool 
fiber of such wool product does not average 16.75 microns or finer;
    (h) ``Super 150's'' or ``150's,'' if the average diameter of wool 
fiber of such wool product does not average 16.25 microns or finer;
    (i) ``Super 160's'' or ``160's,'' if the average diameter of wool 
fiber of such wool product does not average 15.75 microns or finer;
    (j) ``Super 170's'' or ``170's,'' if the average diameter of wool 
fiber of such wool product does not average 15.25 microns or finer;
    (k) ``Super 180's'' or ``180's,'' if the average diameter of wool 
fiber of such wool product does not average 14.75 microns or finer;
    (l) ``Super 190's'' or ``190's,'' if the average diameter of wool 
fiber of such wool product does not average 14.25 microns or finer;
    (m) ``Super 200's'' or ``200's,'' if the average diameter of wool 
fiber of such wool product does not average 13.75 microns or finer;
    (n) ``Super 210's'' or ``210's,'' if the average diameter of wool 
fiber of such wool product does not average 13.25 microns or finer;
    (o) ``Super 220's'' or ``220's,'' if the average diameter of wool 
fiber of such wool product does not average 12.75 microns or finer;

[[Page 57818]]

    (p) ``Super 230's'' or ``230's,'' if the average diameter of wool 
fiber of such wool product does not average 12.25 microns or finer;
    (q) ``Super 240's'' or ``240's,'' if the average diameter of wool 
fiber of such wool product does not average 11.75 microns or finer; and
    (r) ``Super 250's'' or ``250's,'' if the average diameter of wool 
fiber of such wool product does not average 11.25 microns or finer.
0
7. Amend Sec.  300.24 by revising paragraph (b) to read as follows:


Sec.  300.24  Representations as to fiber content.

* * * * *
    (b) Where a word, coined word, symbol, or depiction which connotes 
or implies the presence of a fiber is used on any label, whether 
required or non-required, a full fiber content disclosure with 
percentages shall be made on such label in accordance with the Act and 
regulations. Where a word, coined word, symbol, or depiction which 
connotes or implies the presence of a fiber is used on any hang-tag 
attached to a wool product that has a label providing required 
information and the hang-tag provides non-required information, such as 
a hang-tag providing information about a particular fiber's 
characteristics, the hang-tag need not provide a full fiber content 
disclosure; however, if the wool product contains any fiber other than 
the fiber identified on the hang-tag, the hang-tag must disclose 
clearly and conspicuously that it does not provide the product's full 
fiber content; for example:
    ``This tag does not disclose the product's full fiber content.'' or
    ``See label for the product's full fiber content.
* * * * *
0
8. Amend Sec.  300.25 by revising paragraphs (d) and (f) to read as 
follows:


Sec.  300.25  Country where wool products are processed or 
manufactured.

* * * * *
    (d) The country of origin of an imported wool product as determined 
under the laws and regulations enforced by United States Customs and 
Border Protection shall be considered to be the country where such wool 
product was processed or manufactured.
* * * * *
    (f) Nothing in this rule shall be construed as limiting in any way 
the information required to be disclosed on labels under the provisions 
of any Tariff Act of the United States or regulations promulgated 
thereunder.
* * * * *
0
9. Revise Sec.  300.32 to read as follows:


Sec.  300.32  Form of separate guaranty.

    (a) The following are suggested forms of separate guaranties under 
section 9 of the Act which may be used by a guarantor residing in the 
United States on or as part of an invoice or other document relating to 
the marketing or handling of any wool products listed and designated 
therein and showing the date of such invoice or other document and the 
signature and address of the guarantor:
    (1) General form.
    We guarantee that the wool products specified herein are not 
misbranded under the provisions of the Wool Products Labeling Act and 
rules and regulations thereunder.
    (2) Guaranty based on guaranty.
    Based upon a guaranty received, we guarantee that the wool products 
specified herein are not misbranded under the provisions of the Wool 
Products Labeling Act and rules and regulations thereunder.

    Note:  The printed name and address on the invoice or other 
document will suffice to meet the signature and address 
requirements.

    (b) The mere disclosure of required information including the fiber 
content of wool products on a label or on an invoice or other document 
relating to its marketing or handling shall not be considered a form of 
separate guaranty.
0
10. Amend Sec.  303.33 by revising paragraphs (a)(3) and (c) to read as 
follows:


Sec.  300.33  Continuing guaranty filed with Federal Trade Commission.

    (a)(1) * * *
* * * * *
    (3) Continuing guaranties filed with the Commission shall continue 
in effect for one year unless revoked earlier. The guarantor shall 
promptly report any change in business status to the Commission.
* * * * *
    (c) Any person who has a continuing guaranty on file with the 
Commission may, during the effective dates of the guaranty, give notice 
of such fact by setting forth on the invoice or other document covering 
the marketing or handling of the product guaranteed the following:
    Continuing Guaranty under the Wool Products Labeling Act filed with 
the Federal Trade Commission.
* * * * *

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2013-22919 Filed 9-19-13; 8:45 am]
BILLING CODE 6750-01-P