[Federal Register Volume 79, Number 107 (Wednesday, June 4, 2014)]
[Rules and Regulations]
[Pages 32157-32164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-12736]


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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: Final rule.

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SUMMARY: The Commission amends 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 amended rules and regulations under the Textile Fiber Products 
Identification Act (``Textile Rules'').

DATES: The amended Rules are effective on July 7, 2014.

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

    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 \1\ 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''),\2\ and the costs and benefits of certain provisions of the Wool 
Products Labeling Act of 1939 (``Wool Act'').\3\
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    \1\ 77 FR 4498 (Jan. 30, 2012).
    \2\ Public Law 109-428, 120 Stat. 2913.
    \3\ 15 U.S.C. 68-68j.
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    The Wool Act and Rules \4\ 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

[[Page 32158]]

manufacturer or other responsible company does business or, in lieu 
thereof, the registered identification number (``RN number'') of such 
company; and (4) the name of the country where the wool product was 
processed or manufactured.\5\
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    \4\ Commission's Rules and Regulations under the Wool Products 
Labeling Act, 16 CFR Part 300, which implement the Wool Act.
    \5\ 15 U.S.C. 68b(a).
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    The Commission received six comments \6\ in response to its ANPR. 
Based on these comments, the Commission issued a Notice of Proposed 
Rulemaking (``NPRM'') proposing amendments to conform to the 
requirements of the Conforming Act and to align with the proposed 
amendments to the Textile Rules.\7\
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    \6\ The comments are posted at http://www.ftc.gov/policy/public-comments/initiative-418. The Commission also considered one comment 
filed in the Textile rulemaking by Adam Varley. See http://www.ftc.gov/policy/public-comments/comment-00003-30.
    \7\ 78 FR 57808 (Sept. 20, 2013). The Commission amended the 
Textile Rules in March 2014. The amendments take effect on May 5, 
2014. See 79 FR 18766 (Apr 4, 2014).
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    The Commission received seven comments \8\ in response: a joint 
comment from the Cashmere and Camel Hair Manufacturers Institute, 
International Wool Textile Organization, and the National Council of 
Textile Organizations; \9\ and one each from the American Apparel & 
Footwear Association; \10\ the International Wool Textile Organization; 
\11\ the United States Fashion Industry Association; \12\ the 
Australian Government; \13\ James Francis Casale of The Detweiler 
House; \14\ and David Trumbull of Agathon Associates.\15\ This Federal 
Register Notice summarizes the comments, explains the amendments to the 
Wool Rules, provides the analyses required by the Regulatory 
Flexibility Act and the Paperwork Reduction Act, and sets forth the 
amended Rule provisions.
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    \8\ These comments are posted at http://www.ftc.gov/policy/public-comments/initiative-507. 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 or 
country, followed by the number assigned by the Commission.
    \9\ Joint Comment (3).
    \10\ AAFA (14).
    \11\ IWTO (12).
    \12\ USFIA (8).
    \13\ Australia (7).
    \14\ Casale (11).
    \15\ Trumbull (13).
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II. Summary of Comments

    In this section, the Commission summarizes the main points made by 
the comments. Comments addressing the issue favored amending the Rules 
to implement the Conforming Act but urged the Commission to limit the 
use of ``Super'' and ``S'' to describe certain very fine wool products. 
The comments also generally favored aligning the Rules with the amended 
Textile Rules or were silent on this issue.\16\ Moreover, the comments 
generally agreed with the proposed amendments relating to hang-tags, 
with the exception of the proposed hang-tag disclosures. One comment 
opposed the proposed annual renewal for continuing guaranties.
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    \16\ For example, AAFA and USFIA supported the proposal to amend 
the Rules 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 shall be the country where the product was 
processed or manufactured. Australia had no objection to this 
proposal, and none of the other comments addressed it. This 
amendment tracks the recent amendment to the Textile Rules.
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A. Very Fine Wool Products

    Four comments addressed implementation of the Conforming Act by 
adding the Act's definitions of very fine wool. 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,'' etc.) are misbranded 
unless the wool fibers are a certain average diameter or finer. The 
commenters urged the Commission to limit the use of ``Super'' and ``S'' 
numbers.\17\ Three comments urged the Commission to study how consumers 
interpret ``Super'' and ``S'' numbers.\18\ The Joint comment also 
argued that consumers interpret ``Super'' numbers to mean that the 
garment contains wool of the corresponding diameter, and that the 
Conforming Act prohibits labeling that describes suits containing no 
wool as ``Super.'' \19\ IWTO stated that ``S'' numbers should not be 
used to describe non-wool products. Two comments favored amending the 
Rules to allow the use of the word ``Super'' to describe only pure wool 
because this practice is common in the weaving industry and the use of 
``Super'' to describe blends could cause confusion.\20\
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    \17\ Two comments agreed with the Commission that fiber from the 
cashmere goat should be labeled as wool if it does not meet the 
Conforming Act's definition of ``cashmere.'' See Joint comment and 
Trumbull. Three comments agreed with the Commission's decision not 
to propose additional deviations or tolerances for ``Super'' or 
``S'' numbers used to describe very fine wool products. See Joint 
comment, IWTO, and Trumbull.
    \18\ Joint comment, IWTO, and Trumbull. Trumbull stated that he 
agreed with the Joint comment on issues relating to the use of the 
term ``super'' to describe wool.
    \19\ The Joint comment also urged the Commission to address in 
the Rules how one should label a wool product where the warp yarn 
diameter differs from the filler yarn diameter. It noted that many 
in the wool trade average the diameters.
    \20\ IWTO and Australia.
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B. Hang-Tag Disclosures

    Three comments expressed support for the Commission's proposal to 
allow certain hang-tags identifying a fiber even though they do not 
disclose a product's full fiber content.\21\ Two of these comments, 
however, questioned or opposed a blanket requirement for hang-tag 
disclosures (e.g., ``See label for the product's full fiber content'') 
for products containing multiple fiber types. AAFA questioned whether 
the disclosure was necessary and requested clarification on how to make 
the disclosure clearly and conspicuously. USFIA urged the Commission to 
eliminate the disclosure requirement unless there is a demonstrable 
danger of deception, such as a circumstance where a product contains 
only a small amount of the fiber described in the hang-tag.\22\
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    \21\ AAFA, IWTO, and USFIA. Also, Australia advised that it has 
no concerns about the hang-tag proposal.
    \22\ USFIA noted that, because fiber suppliers may not know the 
product's fiber content, they will have to include the disclosure on 
all hang-tags, which could mislead consumers if the fiber described 
in the hang-tag is the only fiber type.
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C. Continuing Guaranties

    Two comments addressed issues relating to continuing guaranties. 
AAFA opposed the proposal to have continuing guaranties expire after 
one year unless revoked earlier. It disagreed with the Commission's 
assertion that requiring annual renewal of continuing guaranties would 
impose minimal costs on industry. One AAFA member estimates spending 5-
8 hours on each continuing guaranty it files. AAFA explained that most 
companies file dozens of such guaranties and many file hundreds. As a 
result, AAFA argued, the requirement may be unmanageable for many 
companies. AAFA also noted that filing guaranties is not the only 
relevant cost. It stated that vendors face a ``clerical nightmare of 
keeping up with the guaranties'' and buyers have difficulty obtaining 
guaranties from the Commission in a timely fashion. None of the 
comments expressed support for amending the Rules to have continuing 
guaranties expire after one year.
    Another comment opposed the automatic incorporation of a recent 
amendment to the Textile Rules replacing the requirement that 
guarantors sign continuing guaranties under penalty of perjury with a 
certification requirement.\23\ The Wool Rules reference the amended 
provision of the Textile Rules, thereby incorporating the change to the 
Textile Rules without further action by the

[[Page 32159]]

Commission. Although the comment favored the new certification 
requirement, it opposed dropping the signing under penalty of perjury 
requirement because doing so would dilute confidence in guaranties. The 
comment argued that the certification would not be as reliable or as 
well understood as signing under penalty of perjury, and that by its 
own terms it does not apply to the initial product submission. None of 
the other comments addressed these issues.
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    \23\ Casale.
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III. Amendments

    The record supports modifying and clarifying the Rules as the 
Commission proposed, except for the proposal that continuing guaranties 
expire after one year unless revoked earlier.\24\ In particular, the 
Wool Rules should reflect the Wool Act as amended in 2006 by the 
Conforming Act and align with the recently amended Textile Rules.\25\ 
Indeed, the Commission lacks the discretion not to amend the Rules to 
implement the Conforming Act.\26\ Accordingly, the Commission amends 
the Rules regarding fiber content disclosures, country-of-origin 
disclosures, and wool guaranties.\27\
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    \24\ The Commission also amends Sec.  300.3(a)(1) of the Rules 
to correct a citation to the Wool Act.
    \25\ 78 FR 29263 (May 20, 2013).
    \26\ 15 U.S.C. 68d(a).
    \27\ The Commission recently amended several provisions of the 
Textile Rules that the Wool Rules incorporate. For example, Sec.  
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). 
The ISO standard has been updated and is now identified as ISO 2076: 
2010(E). The Commission amended Sec.  303.7 to incorporate the 
revised ISO standard. See 79 FR 18766 (Apr. 4, 2014). AAFA, IWTO, 
and Australia favored incorporation of the revised ISO standard. 
None of the comments opposed it.
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A. Fiber Content Disclosures

    The Commission amends the Rules' fiber content disclosure 
provisions to: (1) Incorporate the Wool Act's new definitions for 
cashmere and very fine wools; (2) clarify Sec.  300.20's descriptions 
of products containing virgin or new wool; and (3) revise 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 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 microns.\28\ Accordingly, the 
Commission proposed incorporating the statutory definition of 
``cashmere'' into Sec.  300.19.\29\ The Commission adopts this 
amendment.
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    \28\ 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.
    \29\ The incorporated language appears as new paragraph (a). The 
Commission also redesignates 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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    In the NPRM, the Commission stated that fibers from the cashmere 
goat should be labeled as wool if they do not meet the Conforming Act's 
definition of cashmere. The two comments addressing this issue agreed 
with the Commission.\30\
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    \30\ Joint comment and Trumbull.
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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 proposed to add a new 
Sec.  300.20a to incorporate these definitions. Four commenters raised 
additional issues regarding the labeling of such wools, but the record 
provides an insufficient basis for proposing further changes to the 
Rules. The Commission addresses the labeling of very fine wool below.
(1) 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 average diameter or 
finer. 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.\31\
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    \31\ 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 adds a new Sec.  300.20a, entitled ``Labeling of very fine 
wool.'' This section provides 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.'' \32\ Based on 
the comments filed in response to the NPRM, the Commission did not 
propose any additional standards or deviations. The Joint comment and 
Trumbull agreed with this decision. None of the comments disagreed.
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    \32\ See 15 U.S.C. 68b(a)(5).
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(3) Limiting the Use of ``Super'' and ``S'' Numbers
    The Commission adopts the proposed amendments implementing the 
Conforming Act with regard to the use of ``Super'' and ``S'' 
numbers.\33\ The Commission declines the comments' request to propose 
limits on the use of ``Super'' and ``S'' numbers to describe non-wool 
products and wool blends for several reasons. The Wool Act and Rules 
apply to products containing wool or purporting to contain wool. 
Therefore, if the use of a ``Super'' or ``S'' number describing a 
product falsely implies that the product contains wool, the Act and 
Rules apply and the use of the ``Super'' or ``S'' numbers on the label 
would violate them. The Commission lacks sufficient information, 
however, to conclude that the mere use of a ``Super'' or ``S'' number 
implies that a product contains wool. Moreover, even if the Wool Act 
and Rules do not apply to a suit or other garment described using 
``Super'' or ``S'' numbers, the Textile Act and Rules would still 
require disclosure of the product's fiber content. Thus a consumer 
could check the label to determine the actual fiber content. The record 
does not suggest that disclosure of the product's fiber content fails 
to correct potential deception regarding use of ``Super'' or ``S'' 
numbers. Thus amendments to the Wool Rules are not warranted.
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    \33\ The Commission also declines to conduct a workshop or a 
consumer perception study of ``Super'' and ``S'' numbers at this 
time. The Commission currently lacks sufficient evidence of 
deception to justify such a workshop or study.
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    The Commission also lacks authority to prohibit the use of 
``Super'' or ``S'' numbers where the wool fiber of a wool

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blend product meets the ``Super'' or ``S'' criteria in the Act. As the 
Commission explained in the NPRM, the Conforming Act precisely defines 
the various categories of superfine wool fibers without distinguishing 
between pure wool fabrics and fabrics containing wool and other fibers. 
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 100% wool.
    Of course, the use of ``Super'' or ``S'' numbers to deceptively 
describe the fiber content of a wool product 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.\34\ The Rules further 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.'' \35\ However, none of the 
commenters provided evidence that would support limiting the use of 
``Super'' or ``S'' numbers or to require disclosures to prevent 
consumer deception.
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    \34\ 15 U.S.C. 68b(a)(1).
    \35\ 16 CFR 300.10(b).
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    In addition, the Commission declines to amend the Rules to address 
wool fibers of differing fineness used in the warp and filling yarns of 
a fabric.\36\ The Joint comment urged the Commission to address how to 
determine ``Super'' or ``S'' numbers where the diameter of the warp 
yarns differ from the diameter of the filling yarns, and noted that 
many industry members average the diameter of the fibers to determine 
the fineness. The record does not include any evidence regarding 
consumer understanding of ``Super'' or ``S'' numbers in this context. 
Moreover, the Commission does not currently have reason to believe that 
the practice of averaging the diameter of warp and filling yarns to 
determine overall fineness is deceptive. Of course, the Commission 
could challenge the practice if it obtains evidence of deception in a 
particular case.
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    \36\ In fabric, the warp yarns run vertically or lengthwise, 
while the weft or filling yarns run horizontally or crosswise.
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2. Clarification of Sec.  300.20 on ``Virgin'' or ``New'' Wool
    The Commission proposed amending Sec.  300.20 so that it 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. None of the comments opposed this proposal, which 
involves a non-substantive clarification of the provision. The 
Commission recently adopted a similar amendment to the Textile 
Rules.\37\ Accordingly, the Commission adopts this amendment without 
change for the reasons explained in the NPRM.
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    \37\ See 79 FR 18766 (Apr. 4, 2014).
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3. Disclosure Requirements Applicable To Hang-Tags
    The Commission amends Sec. Sec.  300.8(d) and 300.24(b) as proposed 
to allow certain hang-tags with fiber trademarks and performance 
information, even if they do not disclose the product's full fiber 
content. The Commission recently adopted a similar amendment to the 
Textile Rules.\38\ IWTO supported the proposal and Australia had no 
concerns. AAFA and USFIA generally supported the proposal, but 
expressed concerns. None of the remaining four comments addressed the 
proposal.
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    \38\ Id.
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    AAFA and USFIA raised concerns about the proposed requirement that 
hang-tags for products with multiple fiber types disclose clearly and 
conspicuously that the hang-tag does not provide the product's full 
fiber content. AAFA questioned whether the disclosure is necessary, and 
sought clarification regarding how companies should make the disclosure 
clearly and conspicuously. USFIA explained that, in practice, all hang-
tags will have to make the disclosure because suppliers will not know 
in advance whether the product contains other fibers. It suggested 
requiring the disclosure only where there is a demonstrable danger of 
deception, such as a circumstance where the product contains only a 
small amount of the fiber described in the hang-tag.
    Accordingly, the Commission adopts the amendment to allow hang-tags 
that do not disclose full fiber content, which was unopposed, for two 
reasons. First, requiring full fiber percentages on hang-tags is 
redundant because the Rules mandate this information on the required 
textile label. Second, the requirement likely impedes the flow of 
truthful information to consumers because it effectively prevents 
suppliers and other marketers from identifying fibers and describing 
their performance on a hang-tag unless they know the full fiber content 
of the finished product.
    Although AAFA and USFIA questioned the need for a disclosure on at 
least some hang-tags that do not disclose full fiber content, neither 
submitted any evidence regarding how consumers would interpret such 
hang-tags. The Commission continues to believe that, without the 
disclosure, some consumers would mistakenly assume that the hang-tag 
discloses full fiber content. Such consumers would have no reason to 
search for and examine the label disclosing full fiber content if the 
hang-tag leads them to believe that the product does not contain fibers 
other than those touted on the hang-tag. The Commission plans to 
provide informal guidance on how to make the disclosure clearly and 
conspicuously through its business education materials and by providing 
staff advice.

B. Additional Proposed Amendments To Align Wool and Textile Rules

    The Commission amends the Wool Rules as proposed to conform the 
country of origin disclosures and provisions discussing ``invoice or 
other paper'' with the recently amended Textile Rules. The Commission 
also declines to adopt its proposed amendment regarding the duration of 
continuing guaranties, which will conform the Wool Rules to the 
recently amended Textile Rules, because the Commission lacks sufficient 
evidence to conclude that any benefits of the amendment would exceed 
the costs. Again, aligning the two Rules will serve the public interest 
by reducing compliance burdens and making fiber content disclosures 
more consistent.
1. Country-of-Origin Disclosures
    To promote consistency with the Textile Rules, the Commission 
proposed 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 proposed 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.
    AAFA and USFIA supported this proposal, and Australia had no 
objection to it. None of the four remaining comments addressed it. 
Accordingly, the Commission adopts this amendment for the reasons 
explained in the NPRM.
2. Invoice or Other Paper
    To conform the Wool Rules to the amended Textile Rules, the 
Commission

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adopts its proposed revisions of 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). Furthermore, the Commission's 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 proposed 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 proposed 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 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 recently amended the definition in Textile Rules 
Sec.  303.1(h) to clarify that invoices and other documents may be 
preserved electronically. None of the comments addressed these issues. 
Accordingly, the Commission adopts these amendments for the reasons 
explained in the NPRM.
3. Continuing Guaranties
    As in the final Textile Rules, the Commission declines to amend the 
duration of continuing guaranties in Sec.  300.33(a)(3).\39\ 
Furthermore, although the Commission is not amending the Wool Rules to 
revise the continuing guaranty form, it recently amended the Textile 
Rules form (FTC Form 31-A) referenced by Sec.  300.33 of the Wool Rules 
by replacing the requirement that filers sign under penalty of perjury 
with a certification requirement. Because the form set forth in the 
Textile Rules is also used for Wool guaranties, this amendment to the 
Textile Rules automatically revised the Wool Rules continuing guaranty 
form by incorporation.
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    \39\ See 79 FR 18766 at 18768-18769 (Apr. 4, 2014). In addition, 
Sec.  300.33(b) states that the continuing guaranty form is found in 
Sec.  303.38(b) of the Textile Rules.
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    The Commission proposed amending Sec.  300.33(a)(3) to provide that 
continuing guaranties remain in effect for one year unless revoked 
earlier.\40\ AAFA strongly opposed this proposal. None of the other 
comments addressed it. Specifically, AAFA disputed the Commission's 
assertion that requiring annual renewal of continuing guaranties would 
impose minimal costs on industry. One AAFA member company reported 
spending five to eight hours on each continuing guaranty that it files. 
AAFA explained that most companies file dozens of continuing guaranties 
and many file hundreds. As a result, AAFA argued, the requirement may 
be unmanageable for many companies. AAFA also noted that filing 
guaranties is not the only relevant cost. It stated that vendors face a 
``clerical nightmare of keeping up with the guaranties,'' and buyers 
have difficulty obtaining guaranties from the Commission in a timely 
fashion.\41\
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    \40\ 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. 15 U.S.C. 68g. 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.
    \41\ The Commission strives to process such requests promptly. 
Unfortunately, the Commission cannot respond to this complaint 
because AAFA did not identify the guaranties at issue or the dates 
that its members requested assistance.
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    As noted above, the Commission decided not to adopt a similar 
amendment to the Textile Rules. As was the case for the Textile Rules, 
the Commission lacks sufficient evidence to conclude that annual 
renewal would increase the reliability of continuing guaranties. 
Assuming, arguendo, that the requirement would increase the reliability 
of continuing guaranties, the Commission lacks sufficient evidence to 
conclude that the benefits of imposing this requirement would exceed 
the costs. Accordingly, the Commission has decided not to adopt the 
proposed amendment.
    The Commission amended Sec.  303.38(b) of the Textile Rules to 
modify the continuing guaranty form by replacing the requirement that 
sellers sign 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 Textile, Wool, and/or Fur Acts).\42\ 
Because Sec.  300.33(b) of the Wool Rules incorporates this form, this 
amendment effectively revised the Wool Rules.\43\
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    \42\ The certification provides: ``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.'' See 79 FR 18766 at 18773 (Apr. 4, 
2014).
    \43\ Id. The Commission also revised the form to include similar 
certifications for products subject to the Textile Act and the Fur 
Products Labeling Act. 15 U.S.C. 69-69k.
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    One comment addressed this certification requirement. It supported 
the requirement, but opposed dropping the requirement that guarantors 
sign under penalty of perjury.\44\ It argued that doing so would dilute 
confidence in guaranties. It stated that the certification would not be 
as reliable or as well understood as signing under penalty of perjury, 
and that by its own terms it does not apply to the initial product 
submission. The Commission disagrees with the statement that the 
certification does not apply to an initial product submission. The 
certification states that the guarantor ``guarantees that any wool 
product it sells, ships, or delivers will not be misbranded.'' Any wool 
product means all wool products, regardless of the date of sale or 
shipment.
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    \44\ Casale.
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    Nonetheless, the Commission continues to share the commenter's 
concern about the reliability of continuing guaranties once guarantors 
no longer sign them under penalty of perjury. If the Commission obtains 
evidence that continuing guaranties have become less reliable, it will 
revisit this issue and consider amending the Rules' continuing guaranty 
provisions accordingly.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') \45\ requires that the 
Commission conduct an initial and final analysis of the anticipated 
economic impact of the amendments on small entities. Section 605 of the 
RFA \46\ 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.
---------------------------------------------------------------------------

    \45\ 5 U.S.C. 601-612
    \46\ 5 U.S.C. 605.
---------------------------------------------------------------------------

    The Commission believes that the amendments will not have a 
significant economic impact upon small entities that manufacture or 
import wool products, although they may affect a substantial number of 
small businesses. The amendments conform the Rules to the Wool Act as 
amended by the Conforming Act, clarify the Rules, provide more options 
for disclosing fiber trademarks and performance information on hang-
tags, and update the Rules' guaranty provisions. Therefore, the 
Commission certifies that amending the Rules will not have a

[[Page 32162]]

significant economic impact on a substantial number of small 
businesses. The Commission has nonetheless determined that it is 
appropriate to publish the following final regulatory flexibility 
analysis in order to ensure that the impact of the Rules on small 
entities is fully addressed.

A. Need for and Objective of the Amendments

    The objective of the amendments is to 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. The Wool Act authorizes the Commission to implement its 
requirements through the issuance of rules.

B. Significant Issues Raised in Public Comments

    In the NPRM's Initial Regulatory Flexibility Analysis, the 
Commission concluded 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. None of the comments disputed the Initial Regulatory Flexibility 
Analysis, with the exception of one comment from AAFA objecting to the 
proposal to amend Sec.  300.33(a)(3) to provide that continuing 
guaranties are effective for one year unless revoked earlier. AAFA 
questioned the Commission's assertion that the proposed amendment would 
enhance the reliability of guaranties and contended that it would 
impose substantial unnecessary costs on industry. For the reasons 
explained above, the Commission has decided not to adopt this proposal. 
The Commission did not receive any comments from the Small Business 
Administration.

C. Small Entities to Which the 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.\47\ A substantial number of these entities 
likely qualify as small businesses. The Commission estimates that the 
amendments will not have a significant impact on small businesses 
because they have an existing obligation to comply with statutory 
labeling requirements, and the amendments provide covered entities with 
additional labeling options without imposing 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. The change from ``invoice or other 
paper'' to ``invoice or other document'' makes the affected sections of 
the Rules format-neutral and gives covered entities, including small 
businesses, more flexibility in terms of compliance.
---------------------------------------------------------------------------

    \47\ Federal Trade Commission: Agency Information Collection 
Activities; Proposed Collection; Comment Request, 76 FR 77230 (Dec. 
12, 2011).
---------------------------------------------------------------------------

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

    As noted earlier, the amendments conform the Rules to the Wool Act 
as amended by the Conforming Act, clarify the Rules, provide more 
options for disclosing fiber trademarks and performance information on 
hang-tags, and update the Rules' guaranty provisions. They do not 
impose any new reporting, recordkeeping, or disclosure requirements. 
The small entities potentially covered by the amendments will include 
all such entities subject to the Rules. The professional skills 
necessary for compliance with the Rules as modified by the amendments 
would include office and administrative support supervisors to 
determine label content and clerical personnel to draft and obtain 
labels and keep records.

E. Significant Alternatives to the Amendments

    The Commission has not proposed any specific small entity exemption 
or other significant alternatives, as the 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. The amendment relating to hang-tags will allow greater 
compliance flexibility, and might reduce the cost of providing 
consumers with truthful, non-deceptive information about fiber content 
and performance. 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 amendments.

V. 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'').\48\ 
As discussed above, the amendments: (a) Conform the Rules to the Wool 
Act as amended by the Conforming Act by revising Sec.  300.19 and 
adding Sec.  300.20a; (b) clarify the Rules, including Sec. Sec.  
300.1(j), 300.20, 300.25(d) and (f), 300.32(a), and 300.33(c); and (c) 
amend 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.
---------------------------------------------------------------------------

    \48\ 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 amendments do not impose any 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.

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 amends 16 CFR Part 
300 as follows:

[[Page 32163]]

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

0
1. Revise the authority citation for Part 300 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.  300.3 by revising paragraph (a)(1) to read as follows:


Sec.  300.3  Required label information.

    (a) * * *
    (1) The fiber content of the product specified in section 
4(a)(2)(A) of the Act. The generic names and percentages by weight of 
the constituent fibers present in the wool product, exclusive of 
permissive ornamentation, shall appear on such label with any 
percentage of fiber or fibers designated as ``other fiber'' or ``other 
fibers'' as provided by section 4(a)(2)(A)(4) of the Act appearing 
last.
* * * * *

0
4. 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
5. Revise Sec.  300.19 to read as follows:


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

    (a)(1) In setting forth the required fiber content of a wool 
product, the term ``cashmere'' may be used for such fiber content only 
if:
    (i) Such fiber consists of the fine (dehaired) undercoat fibers 
produced by a cashmere goat (capra hircus laniger);
    (ii) The average diameter of such cashmere fiber does not exceed 19 
microns; and
    (iii) 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.
    (2) 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 section:

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
6. 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
7. Add 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;

[[Page 32164]]

    (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;
    (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
8. 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
9. 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
10. 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 to paragraph (a): 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
11. Amend Sec.  300.33 by revising paragraph (c) to read as follows:


Sec.  300.33  Continuing guaranty filed with Federal Trade 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. 2014-12736 Filed 6-3-14; 8:45 am]
BILLING CODE 6750-01-P