Rules and Regulations Under the Wool Products Labeling Act

FEDERAL TRADE COMMISSION

16 CFR Part 300

Rules and Regulations Under the Wool Products Labeling Act

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Trade Commission (Commission or FTC) has completed

its regulatory review of the Rules and Regulations under the Wool

Products Labeling Act (Wool Rules). Pursuant to that review the

Commission concludes that the Wool Rules continue to be valuable to

both consumers and firms. The regulatory review comments suggested

various substantive amendments to the Wool Rules. The Commission has

considered these proposals and other proposals that it believes merit

further inquiry. The Commission seeks comment on whether it should

amend the Wool Rules to: Allow the listing of generic fiber names for

fibers that have a functional significance and are present in the

amount of less than 5% of the total fiber weight of a wool product,

without requiring disclosure of the functional significance of the

fiber, as presently required by Wool Rule 3(b); eliminate the

requirement of Wool Rule 10(a) that the front side of a cloth label,

which is sewn to the product so that both sides of the label are

readily accessible to the prospective purchaser, bear the wording

``Fiber Content on Reverse Side'' when the fiber content disclosure is

listed on the reverse side of the label; allow for a system of shared

information for manufacturer, importer, or other marketer

identification among the North American Free Trade Agreement (NAFTA)

countries; add a provision to Wool Rule 4 specifying that a Commission

registered identification number (RN) will be subject to cancellation

if, after a change in the material information contained on the RN

application, a new application that reflects current business

information is not promptly submitted; allow the use of abbreviations

for generic fiber names; and allow the use of abbreviations and symbols

in country of origin labeling. The Commission also seeks comment on the

possible need to expand the fiber content disclosure requirement in

Wool Rule 19 to include specialty fibers other than the hair or fleece

of the angora or cashmere goat.

DATES: Written comments will be accepted until January 22, 1997.

ADDRESSES: Comments should be submitted to: Office of the Secretary,

Federal Trade Commission, Room H-159, Sixth Street and Pennsylvania

Avenue, NW, Washington, DC 20580. Submissions should be identified as

``Rules and Regulations under the Wool Act, 16 CFR Part 300--Comment.''

If possible, submit comments both in writing and on a personal computer

diskette in Word Perfect or other word processing format (to assist in

processing, please identify the format and version used). Written

comments should be submitted, when feasible and not burdensome, in five

copies.

FOR FURTHER INFORMATION CONTACT: Bret S. Smart, Program Advisor, Los

Angeles Regional Office, Federal Trade Commission, 11000 Wilshire

Blvd., Suite 13209, Los Angeles, CA 90024, (310) 235-4040 or Edwin

Rodriguez, Attorney, Federal Trade Commission, Sixth Street and

Pennsylvania Avenue, NW, Washington, DC 20580, (202) 326-3147.

SUPPLEMENTARY INFORMATION:

I. Background Information

The Wool Products Labeling Act of 1939 (Wool Act), 15 U.S.C. 68,

requires marketers of covered wool products to mark each product with

(1) the generic names and percentages by weight of the constituent

fibers present in the product; (2) the name under which the

manufacturer or other responsible company does business, or in lieu

thereof, the RN issued to the company by the Commission; and (3) the

name of the country where the product was processed or manufactured.

The Wool Act also contains advertising and recordkeeping provisions.

Pursuant to Section 6(a) of the Act, 15 U.S.C. 68d, the Commission has

issued implementing regulations, the Wool Rules, which are found at 16

CFR Part 300.

As part of the Commission's ongoing regulatory review of all its

rules, regulations, and guides, on May 6, 1994, the Commission

published a Federal Register notice (FRN), 59 FR 23645, seeking public

comment on the Wool Rules. That same day a similar FRN was published,

59 FR 23646, seeking public comment on the Textile Rules, which are

required by the Textile Fiber Products Identification Act.1 Though

not identical, the Wool Rules and the

[[Page 67740]]

Textile Rules are closely related. Generally, the former covers

products comprised in whole or in part of wool, while the latter covers

products containing no wool at all. The FRNs solicited comments about

the overall costs and benefits of the Wool Rules and the Textile Rules,

as well as their regulatory and economic impact. The FRNs also sought

comment on what changes in these Rules would increase their benefits to

purchasers and how those changes would affect the costs the Rules

impose on firms subject to their requirements. The deadline for

submission of comments was extended twice, on July 7, 1994 and

September 12, 1994. The final deadline for comments was October 15,

1994.

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\1\ 15 U.S.C. 70 et seq. The Rules and Regulations under the

Textile Fiber Products Identification Act are found at 16 CFR Part

303. A Notice of Proposed Rulemaking seeking comment on proposed

changes to the Textiles Rules was published earlier this year, 61 FR

5340 (February 12, 1996). The comment period closed on May 13, 1996,

and Commission staff members are currently analyzing the

submissions. Most of the proposals discussed in this Notice with

regard to the Wool Rules parallel similar proposals advanced with

regard to the Textile Rules.

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II. Regulatory Review Questions and Comments

A. Introduction

The Commission received twenty-eight comments in response to the

Textile Rules FRN and twelve comments in response to the Wool Rules

FRN. Seven of the twelve Wool Rules comments were merely copies of

correspondence submitted in response to the Textile Rules FRN. Because

of the many points in common between the Textile Rules and the Wool

Rules provisions, Textile Rules submissions that contain

recommendations or comments relevant to both sets of Rules will be

considered as responses to the Wool Rules as well.2 The comments

were submitted by trade associations 3 and companies subject to

the Textile Rules and the Wool Rules.4 In addition, one comment

was submitted by an industry-wide committee formed to address issues

concerning the harmonization of textile regulations among the NAFTA

countries.\5\

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\2\ Unless otherwise identified (e.g., ``Wool Rules Submission),

all footnote citations to comments refer to Textile Rules

submissions.

\3\ National Knitwear & Sportswear Association [NKSA] (1),

National Association of Hosiery Manufacturers [NAHM] (2), American

Textile Manufacturers Institute [ATMI] (3), Cordage Institute [CORD]

(4), National Retail Federation [NRF] (5), American Fiber

Manufacturers Association, Inc. [AFMA] (7), American Textile

Manufacturers Institute [ATMI] (10), Ross & Hardies, on behalf of

United States Association of Importers of Textiles and Apparel [USA-

ITA] (11), American Apparel Manufacturers Association [AAMA] (15),

Liz Claiborne, Inc. and Labeling Committee, Industry Sector Advisory

Committee on Wholesaling and Retailing [ISAC 17] (17). Wool Rules

Submissions: Wool Bureau [WB] (1), Northern Textile Association

[NTA] (4), Harris Tweed Authority [HT] (6), Northern Textile

Association [NTA] (7).

\4\ Warren Featherbone Company [WFC] (6), Dan River Inc. [DR]

(8), Ruff Hewn [RUFF] (9), Gap, Inc. [GAP] (12), Fieldcrest Cannon,

Inc. [FIELD] (13), Fruit of the Loom [FRUIT] (14), Wemco Inc.

[WEMCO] (18), Sara Lee Knit Products [SARA] (19), Horace Small

Apparel Company [HORACE] (20), Perry Manufacturing Company [PERRY]

(21), Milliken & Company [MILL] (22), Cranston Print Works Company

[CRAN] (23), Angelica Corporation [ANGEL] (24), Russell Corporation

[RUSS] (25), Haggar Apparel Company [HAGGAR] (26), Capital Mercury

Shirt Corp. [CAP] (27), Biderman Industries Corporation [BIDER]

(28). Wool Rules Submission: Northwest Woolen Mills [NWM] (2).

\5\ Trilateral Labeling Committee [TLC] (16). Other comments

appear to track TLC's recommendations closely: WFC (6), RUFF (9),

WEMCO (18), SARA (19), ANGEL (24), RUSS (25) HAGGAR (26), CAP (27),

and BIDER (28) explicitly adopt or endorse the recommendations of

TLC (16).

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B. Specific Comments

Twelve comments explicitly express support for the Wool Rules as a

whole 6 because the Wool Rules protect consumers from deceptive

fiber claims and provide them with valuable information about the fiber

content of apparel, allowing them to make educated product comparisons

and purchasing decisions.7 The comments recognize minimal costs

but do not identify any specific costs imposed by the Wool Rules on

consumers.8

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\6\ NKSA (1) p.1, NAHM (2) p.1, ATMI (3) p.1, CORD (4) p.2, DR

(8) p.1, ATMI (10) p.1, FIELD (13) p.1, FRUIT (14) p.1, PERRY (21)

p.1, MILL (22) p.1. Wool Rules Submissions: NTA (4) pp. 1-2, HT (6)

pp. 2-4. These comments were submitted by companies covered by the

Textile and Wool Rules, but they express the belief that the Wool

Rules help consumers.

\7\ NAHM (2) states, at p.1, that the regulations should be

retained ``because they provide a framework for fiber content

disclosure, labeling, country-of-origin clarification, and

provisions for guarantees, all of which protect manufacturers,

buyers, and retail consumers.'' NKSA (1) states, at p.1, that the

Rules serve an important and useful purpose for consumers who may

not be aware of the various fibers in the multi-fiber blends that

have become common in the marketplace. PERRY (21) states, at p.1,

that the Rules are ``both necessary and desirable if we are to have

orderly trade within this hemisphere.''

\8\ NAHM (2) states, at p.1, that the Rules impose costs on

consumers, but does not identify what the costs are. The comment

states that ``the assurances offered by the Rules to purchasers far

outweigh the costs associated with fiber content disclosure on

labeling and the use of guarantees.'' ATMI (10) states, at p.1, that

it ``has no knowledge of additional imposed costs to the consumer

because of the rules.''

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In addition, the comments show that the Wool Rules are valuable to

manufacturers and firms. They allow firms to distinguish their products

from others in the marketplace based on the products' fiber

content.9 They improve the credibility of firms and their products

by assuring consumers that the products they are purchasing will meet

specific standards and consumer tastes.10 The Wool Rules also

``maintain the integrity of fiber type information from the fiber

supplier to the textile manufacturer to the apparel manufacturer to the

consumer.'' 11 Although the Wool Rules impose labeling and

packaging costs,12 they are small and have become an accepted part

of doing business in the textile industry.13 The commenters

consider the costs of compliance to be minimal and the benefits to

companies and consumers to be tangible and great.

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\9\ NKSA (1) p.1.

\10\ NAHM (2) p.2.

\11\ ATMI (3) p.1. See also DR (8) p.1; ATMI (10) p.1, MILL (22)

p.2.

\12\ NAHM (2) p.2. ATMI (3) states, at p.1, that ``[t]here are

minimal costs associated with the manufacture of the label, its

attachment to the textile product, and costs carried by the

manufacturer to maintain records.''

\13\ NKSA (1) p.1, ATMI (3) pp.1-2, DR (8) p.1, ATMI (10) p.5,

FIELD (13) p.6, MILL (22) p.6. ATMI (3) states, at pp.1-2, that

``[p]rior to the rules, textile mills typically kept records of

fiber content and performed fiber identification tests to certify

that fiber being supplied to the mill was indeed what the supplier

stated. These costs and practices have become a generic part of

textile business operations. The rules only add the cost of a

consumer label.''

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The comments submitted in response to the regulatory review of the

Wool Rules propose certain amendments to the Rules. On the basis of the

comments and other available information, the Commission has considered

recommendations to amend the Wool Rules to: (1) Allow the listing of

generic fiber names for fibers that have a functional significance and

are present in the amount of less than 5% of the total fiber weight of

a wool product, without requiring disclosure of the functional

significance of the fiber, as presently required by Wool Rule 3(b); (2)

require labels of covered products containing reprocessed fibers to

disclose whether such reprocessed fibers consist of all new pre-

consumer or untreated post-consumer materials; (3) state specifically

that selvages are exempt; (4) modify country of origin disclosure

requirements; and (5) eliminate the requirement of Wool Rule 10(a) that

the front side of a cloth label, only one end of which is sewn to the

product in such a manner that both sides of the label are readily

accessible to the prospective purchaser, bear the wording ``Fiber

Content on Reverse Side'' when the fiber content disclosure is listed

on the reverse side of the label.

C. NAFTA Related Comments

The goal of NAFTA is to establish a trade zone in which goods can

flow freely among Canada, Mexico, and the United States, a goal that

may be impeded by the multiple burdens imposed on companies by

regulations in the NAFTA countries. Several comments discussed NAFTA

and the need for regulatory convergence. For example, some comments

focus on the problems posed by linguistic differences among the NAFTA

countries, and

[[Page 67741]]

regulations based on these differences, that affect the printing of

fiber content information, country of origin names, and care

instructions.14 Manufacturers must either print separate labels

for each market, which may inhibit the efficient allocation of

inventories within the NAFTA territory and increase costs to

consumers,15 or print unwieldy, multilingual labels that satisfy

all of the regulatory requirements of each NAFTA country.16 In

addition, some comments suggested that differences in labeling

requirements, including label attachment requirements, the definition

of key terms, and responsible party identification systems in the NAFTA

countries, may also impede trade.17 The comments generally agree

that the NAFTA signatories must consult and coordinate with each other

to simplify textile and apparel labeling so that differences in

labeling rules and the manner in which compliance is determined do not

pose trade barriers.18

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\14\ This notice does not address the issue of the use of

symbols in care labeling. The Commission has published separately a

notice regarding that issue. 60 FR 57552 (Nov., 16, 1995).

\15\ FRUIT (14) p.3.

\16\ USA-ITA (11) p.2, see also FRUIT (14) p.2. The comments,

however, do not provide extrinsic evidence that long labels cause

consumer confusion or that they are financially burdensome to

manufacturers or distributors.

\17\ AFMA (7) p.1, FRUIT (14) p.2, SARA (19) p.4. FRUIT states

that differences in labeling requirements may ``function as non-

tariff trade barriers and significantly impede the free flow of

goods within the NAFTA territory,'' inhibiting sales and harming

American industry.

\18\ WFC (6) p.1, AFMA (7) p.1, DR (8) p.1, RUFF (9) pp.1-2,

ATMI (10) pp.1-2, USA-ITA (11) p.2, FIELD (13) pp.1-2, FRUIT (14)

pp.1-2, AAMA (15) p.1, TLC (16) p.1, ISAC 17 (17) p.1 WEMCO (18)

p.1, SARA (19) p.4, HORACE (20) p.2, MILL (22) p.2, ANGEL (24) p.1,

RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.

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NAFTA requires the harmonization of labeling regulations. Article

906 of NAFTA states that ``the Parties shall, to the greatest extent

practicable, make compatible their respective standards-related

measures, so as to facilitate trade in a good or service between the

Parties.'' Article 913 of the Act requires the creation of a Committee

on Standards-Related Measures, including a Subcommittee on Labelling of

Textile and Apparel Goods.

Many of the comments contend that harmonizing labels would benefit

manufacturers and consumers alike by decreasing the costs of production

and distribution. One commenter stated that prices charged to consumers

may decline if the costs associated with labeling decline.19 A few

comments contend that harmonized labeling would be less confusing to

consumers.20

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\19\ FRUIT (14) p.2.

\20\ WFC (6) p.1, AAMA (15) pp.1, 2, TLC (16) p.2, WEMCO (18)

p.1, SARA (19) pp.2, 3, ANGEL (24) p.1, HAGGAR (26) p.1, CAP (27)

p.1, BIDER (28) p.1.

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The Commission has considered the comments and other available

information and NAFTA-related proposals to amend the Wool Rules to: (1)

Allow for a system of shared information for manufacturer or importer

identification among the NAFTA countries; (2) add a provision

specifying that a Commission RN will be subject to cancellation if,

after a change in the material information contained on the RN

application, a new application that reflects current business

information is not promptly submitted; (3) allow the use of

abbreviations for generic fiber names; and (4) allow the use of

abbreviations and symbols in country of origin labeling.

D. Conclusion

Although no comments were received from consumers or consumer

groups, the Commission believes that consumers benefit directly from

the Wool Rules and consider the mandated disclosures material in making

purchase decisions. A consumer with a preference for a particular fiber

can readily determine the presence and percentage of that fiber in

covered products. Likewise, a consumer who is allergic to a certain

fiber can avoid textiles containing that fiber. Companies at all levels

of manufacture, distribution, and sales of textile products support and

accept these regulations. The Commission has decided, however, to seek

additional comment on possible amendments to the Wool Rules.

Passage of NAFTA, which highlighted the importance of reconciling

the labeling requirements of the member countries, prompted many of the

changes proposed in the comments. After reviewing specific

recommendations, the Commission is considering some of the suggested

changes, as well as other possible amendments. The Commission has,

however, rejected other changes to the Wool Rules proposed in the

comments as infeasible or unnecessary. This Notice of Proposed

Rulemaking (NPR) seeks comment concerning the proposed changes. All of

the recommendations for change are discussed below.

III. Proposals for Amendments to the Wool Rules

This section discusses specific recommendations and proposed

changes on which the Commission sought comment in the FRN and

additional issues raised by the comments or the Commission. This

discussion includes a summary and analysis of the comments and a

discussion of the proposed changes that the Commission has made.

A. Use of Generic Fiber Names for Fibers with a Functional Significance

Present in the Amount of Less Than 5% of the Total Weight of a Wool

Product

One commenter recommended that the Commission revise Wool Rule 3(b)

to allow the listing of generic fiber names for fibers that have a

functional significance and are present in the amount of less than 5%

of the total fiber weight of a textile product, without disclosing the

functional significance of the fibers, as the Wool Rule currently

requires.21 The commenter maintains that the existing Wool Rule is

``archaic'' because consumers know, for example, that the functional

significance of spandex is elasticity. In addition, the commenter

expresses the view that the Rule is not well known in the international

textile industry. As a result, wool imports into the United States may

be held by the Customs Service until they have been marked in a manner

consistent with U.S. law. Such delays may be costly to businesses and

ultimately to consumers.

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\21\ GAP (12) pp.1-2.

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Another commenter 22 specifically recommended that the Wool

Rules be amended to recognize the relatively recent and growing trend

of manufacturers' blending small amounts (less than 5%) of nylon (or

perhaps some other synthetic fiber) with ``coarser, less expensive wool

fibers * * *. to give the lightweight wool yarn sufficient strength to

be woven or knitted into fabric form.''

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\22\ Wool Rules Submission: WB (1) pp.1-12

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The Commission believes that amending Wool Rule 3(b) to dispense

with an unnecessary labeling requirement might benefit manufacturers,

importers and other marketers, as well as consumers. In addition, the

cost to consumers is likely to be low because consumers generally may

know the functional significance of many fibers, and manufacturers are

likely to disclose voluntarily the functional significance of others

that may be less familiar. Therefore, the Commission proposes to amend

Wool Rule 3(b) to read as follows:

Sec. 300.3 Required Label Information.

(a) * * *

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(b) In disclosing the constituent fibers in information required

by the Act and regulations or in any non-required information, no

fiber present in the amount of less than five percentum may be

designated by its generic name or fiber trademark but shall be

designated as ``other fiber,'' except that the percentage of wool or

recycled wool shall always be stated, in accordance with Section

4(a)(2)(A) of the Act. Where more than one of such fibers, other

than wool or recycled wool, are present in amounts of less than five

percentum, they shall be designated in the aggregate as ``other

fibers.'' Provided, however, that nothing contained herein shall

prevent the disclosure of any fiber present in the product which has

a clearly established and demonstrable functional significance when

present in the amount stated, as for example:

98% wool

2% nylon

when nylon has a functional significance (e.g., adding strength to

the fabric).

The only difference between existing Wool Rule 3(b) and the

proposed amendment is that the requirement to disclose the fiber's

functional significance has been deleted. The proposed amendment would

still prohibit disclosing generic fiber names for fibers present in an

amount of less than 5% that do not have a functional significance when

present in the amount contained in the wool product. Thus, the proposed

amendment would still allow the consumer to distinguish between fibers

constituting less than 5% of the total weight that have a functional

significance and those that do not. The statement, ``98% wool, 2%

nylon,'' is a common example of a disclosure that includes a fiber

constituting less than 5% of a covered product's weight yet having a

demonstrable functional significance when present in such small

amounts. The Commission solicits comment on the benefits and costs to

consumers and manufacturers of this proposed amendment.

B. Labels of Covered Products Containing Reprocessed Fibers

One commenter 23 suggests that certain untreated ``post-

consumer'' reprocessed textiles might contain harmful bacteria and

organisms and consequently might be a breeding ground for disease. The

commenter says that the same potential for disease does not arise with

respect to reprocessed fibers derived from ``pre-consumer'' (or

manufacturer) materials. The commenter recommends that the Wool Rules

be amended to require products containing reprocessed fibers to

disclose whether the reprocessed fibers were reclaimed from ``pre-

consumer'' or ``post-consumer'' materials.

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\23\ Wool Rules Submission: NWM (2) pp.2-3.

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The Commission does not propose to amend the Wool Rules to require

such disclosures because it does not believe factual support exists for

this contention or other problems relating to reprocessed fibers.

Should evidence of a health hazard arise, the Commission will address

the issue at that time.

C. Fiber Content of Selvages

One commenter 24 recommends that the Wool Rules be amended to

state specifically that the fiber content of selvages need not be taken

into account in the calculation and disclosure of fiber content.

Selvages are narrow strips of material attached or woven to the edges

of a bolt of fabric and used by the manufacturer to hold the fabric

while it is being dyed. Selvages also prevent the fabric from fraying

or raveling. Selvages are not incorporated into a garment or other

finished product, but are discarded during the manufacturing process.

The Commission does not construe the Wool Act and the disclosure

provisions in the Wool Rules to cover selvages. Consequently, because

the selvages at issue are not subject to the Wool Act marking

requirements, there is no need to amend the Wool Rules.

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\24\ Wool Rules Submission: HT (6) pp. 1-6.

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D. Country of Origin Labeling

Under the Wool Act and Wool Rule 25a, an imported wool product must

bear a label disclosing the name of the country where the product was

processed or manufactured. One commenter recommends that domestic

companies that add value to imported greige goods (unfinished plain

fabric) through printing and finishing be allowed to label the finished

product simply as ``Made in USA,'' without mention of imported fabric,

to encourage value-added manufacturing in the United States.25

Such a label would not comply with Wool Rule 25a, which states that a

wool product made in the United States of imported fabric must contain

a label disclosing those facts, as for example: ``Made in USA of

imported fabric.'' Only wool products completely made in the United

States of fabric that was also made in the United States may be labeled

``Made in USA'' without qualification.26 At present, the

Commission does not propose any amendments to this Wool Rule.27

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\25\ CRAN (23) pp. 1-2.

\26\ In determining the appropriate disclosure for country of

origin, the manufacturer or processor needs to look only one step

back in the process. For example, the label ``Made in USA'' would be

appropriate if the finished article were made from fabric produced

in the U.S., regardless of whether the yarn that went into the

fabric was imported.

\27\ The Commission is currently examining issues pertaining to

``Made in USA'' advertising and labeling claims generally in a

separate context. On July 11, 1995, the Commission announced that it

would re-examine its ``Made in U.S.A.'' policy by (1) conducting a

comprehensive review of consumers' perceptions of ``Made in USA''

and similar claims and (2) holding a public workshop to examine

issues relevant to the standard. The Commission issued a notice, 60

FR 53922 (Oct. 18, 1995), requesting public comment in preparation

for the workshop. The workshop was held on March 26-27, 1996.

Following the workshop, the Commission sought further public comment

on the issues. 61 FR 18600 (April 26, 1996). The second comment

period closed on June 30, 1996.

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E. Label Mechanics and Wool Rule 10(a)'s ``Fiber Content on Reverse

Side'' Disclosure Requirement

Several comments addressed the interrelated issues of label type,

label attachment, label placement, and use of both sides of a label to

set out required information.28 The comments recommend that the

Wool Rules not specify a type of label (e.g., woven, non-woven,

printed) to be used or the method of label attachment, to allow for

changes in labeling technology. The comments recommend that the Wool

Rules require only that the label remain securely affixed to the

product and that the information be legible and remain legible for the

useful life of the product. The comments also recommend that the Wool

Rules allow both sides of a label to be used to display the required

information.29 The comments discuss the issue of label attachment

in the context of NAFTA and recommend that U.S. label attachment

regulations be harmonized with those of the NAFTA countries.

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\28\ WFC (6) p.1 DR (8) p.1, RUFF (9) p.2, ATMI (10) p.5, FIELD

(13) p.6, FRUIT (14) p.5, AAMA (15) p.3, TLD (16) p.4, WEMCO (18)

p.1, SARA (19) p.4, HORACE (20) p.2, MILL (22) p.6, ANGEL (24) p.1,

RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1. The

work program of the NAFTA subcommittee on labeling includes ``a

uniform method of attachment'' as one of its issues.

\29\ WFC (6) p.1, DR (8) p.1, RUSS (9) p.2, ATMI (10) p.5, FIELD

(13) p.6, AAMA (15) p.3, TLC (16) p.4, WEMCO (18) p.1, SARA (19)

p.4, HORACE (20) p.2, MILL (22) p.6, ANGEL (24) p.1, russ (25) p.1,

HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.

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The current Wool Rules already address many of the recommendations

made by the comments regarding the mechanics of labeling. Rule 5--

``Required Label and Method of Affixing''--allows any type of label

(e.g., a hangtag; a gummed-on label; a woven, non-woven, or printed

label) to be used, so long as the label is securely affixed and durable

enough to remain attached to the product until the consumer receives

it. There is no requirement in the Wool Rules that the label be

permanently attached to the covered

[[Page 67743]]

product and therefore no requirement that the label remain legible for

the useful life of the product. Wool Rule 10(a) provides that: ``The

required information may appear on any label attached to the product,

provided all the pertinent requirements of the Act and Regulations are

met and so long as the combination of required information and non-

required information is not misleading.''

Wool Rule 10(a) further requires in general that all three Wool Act

disclosures--country of origin, company name or RN, and fiber content--

be made in immediate conjunction with one another. It, provides,

however, that the company name or RN may appear on the back of the

required label or on the front of another label in immediate proximity

to the required label, in accordance with Rule 21--``Use of a Separate

Label for Name or Registered Identification Number.'' It also provides

that when a cloth label is used, and only one end is sewn to the

product, the fiber content disclosure may be placed on the back of the

label, ``if the front side of such label clearly and conspicuously

shows the wording Fiber Content on Reverse Side.''

One commenter proposed that this second provision of Wool Rule

10(a) be amended to eliminate the requirement that manufacturers place

the phrase ``Fiber Content on Reverse Side'' on the front side of the

required label because ``consumers today are aware that both sides of

the label contain information important to their purchasing decision.''

30 The Commission agrees that consumers are likely to look on the

back of labels for information without an express direction to do so,

particularly because under the Commission's Care Labeling Rule, 16 CFR

Part 423, garment care instructions may, and often do, appear on the

reverse side of a label. The required disclosure, therefore, may be

unnecessary.

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\30\ FRUIT (14) p. 5.

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The Commission proposes to amend Wool Rule 10(a). The Rule might be

amended narrowly to eliminate the ``Fiber Content on Reverse Side''

disclosure requirement for cloth labels with one end sewn to textile

products. Another alternative would be to amend Wool Rule 10(a) to

allow the required fiber content information to appear on the reverse

side of any kind of permissible label as long as the information

remains ``conspicuous and accessible.'' The Commission also solicits

other language alternatives relating to the mechanics of labeling, as

well as comment on the benefits and costs to consumers and

manufacturers.

The Commission also requests comment on whether fiber content

identification should be printed on labels that are permanently

attached to a wool product,31 and on whether the other two

required disclosures should similarly appear on a permanent label. This

information may continue to be useful to consumers throughout the life

of the product. For example, fiber content identification may assist

professional cleaners in determining whether certain cleaning

techniques are appropriate for an item of wool apparel. Moreover,

advances in labeling technology make it unlikely that requiring a

permanent label would unduly burden manufacturers. Many manufacturers

already make the required disclosures on permanent labels. Finally, the

Commission seeks comment concerning any specific conflicting rules and

regulations for label attachment in Mexico and Canada, and whether such

conflicts might pose trade impediments that could be removed by

changing the Commission's Wool Rules.

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\31\ Comment on this issue was also requested in a Federal

Register notice seeking comment on proposed amendments to the

Commission's Care Labeling Rule, 16 CFR part 423, 60 FR 67102 (Dec.

28, 1995).

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F. System of Shared Information for Manufacturer or Importer

Identification Among the NAFTA Countries

Under the Textile Act and the Fur Products Labeling Act,32 as

well as under the Wool Act, the required label on covered products must

bear the identification of one or more companies responsible for the

manufacture, importation, offering for sale, or other handling of the

product, either by the full name under which the company does business

or, in lieu thereof, by the RN issued by the Commission. Canada has a

similar system of identification numbers known as CA numbers. Mexico

does not have a similar system, but the Mexican government issues tax

identification numbers to companies.

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

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To eliminate the need for a company to register in more than one

country, the comments recommend that the FTC and appropriate government

agencies in the NAFTA countries develop an integrated system by

allowing any RN, CA, or Mexican tax identification number to suffice as

legal company identification in all three NAFTA countries.33 The

comments repeatedly state that it would not be necessary to create one

identification number system. They recommend that each NAFTA country

continue its policy and procedure of registration, with the U.S.

continuing the present system of RN numbers. The countries could

exchange information on computer databases so that a covered product

can be traced to a manufacturer or other responsible party using either

an RN number, a CA number, or a Mexican tax number.

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\33\ WFC (6) p.1, DR (8) p.1, RUFF (9) pp.1-2, ATMI (10) p.2,

USA-UTA (11) p.2, FIELD (13) pp.2-3, FRUIT (14) p.5, AAMA (15) pp.2-

3, TLC (16) p.4, ISAC 17 (17) p.1, WEMCO (18), p.1, SARA (19) p.2,

HORACE (20) p.2, MILL (22) p.3, ANGEL (24) p.1, RUSS (25) p.2,

HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.

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Congress would need to amend the Wool Act to allow CA numbers and

Mexican tax numbers, which are not registered by the Commission, to be

used on wool products shipped for distribution in the United States.

For present purposes, the Commission seeks comment on the advantages

and disadvantages of a system of shared information, the feasibility of

implementing such a system across borders, and the impact such a system

might have on the ability of the Commission, consumers, and firms to

track responsible parties. Alternatively, the Commission might consider

whether simply to permit the use of the identification numbers of a

NAFTA trading partner, provided that the partner made the identifying

information readily available to anyone seeking it. The Commission

seeks comment on the advantages and disadvantages of this alternative,

which also would require statutory amendment.

G. Require Holders of RN Numbers to Update Their Registration

Information When Changes in That Information Occur

The success of a system of shared information would depend to a

great extent on the availability and the quality of the information in

the Commission's RN registry and the registration systems of Canada and

Mexico. To increase the usefulness of the RN registry, the Commission

plans to improve its accuracy and the ease of access to its contents.

Since initially being issued their RNs, many companies have changed

their legal business name, business address, and/or company type (e.g.,

from proprietorship to corporation) without notifying the FTC about the

change(s) as requested in the RN application. Since the 1940's many RN

holders have gone out of existence, and others, while still in

existence, no longer have any need for their RNs. As a result, although

the records accurately reflect the original application information, a

large percentage of the official FTC records do not reflect an actual

user's current

[[Page 67744]]

name, place of business, and/or company type.

Registered identification numbers are subject to cancellation

whenever any such number was procured or has been used improperly or

contrary to the requirements of the Acts administered by the Federal

Trade Commission, and regulations promulgated thereunder, or when

otherwise deemed necessary in the public interest. The Commission

proposes to add a provision to the Wool Rules that would subject an RN

number to cancellation if, after a change in the material information

contained on the RN application, a new application that reflects

current business information is not promptly submitted to the

Commission. Section 300.4 of the Rules already requires that the

Commission be apprised of such changes. The proposed amendment is

merely an added provision to enable the Commission to update its

database.34 The Commission plans to undertake a program to update

the RN database, in stages over a period of time. Commission staff will

make every reasonable effort to identify and locate all companies

actually using an RN and make them aware of their obligations to update

their applications before a specified deadline. Numbers assigned to

companies that are no longer in business, or that cannot be located,

would then be subject to revocation.

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\34\ It also complements the Commission's Rules of Practice,

which state: ``Numbers are subject to revocation for cause or upon a

change in business status or discontinuance of business.'' 16 CFR

1.32.

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The Commission seeks comment on the following proposed amendment to

Wool Rule 4(c). Currently, Wool Rule 4(c) is as follows:

Sec. 300.4 Registered Identification Numbers.

(a) * * *

(b) * * *

(c) Registered identification numbers shall be used only by the

person or concern to whom they are issued, and such numbers are not

transferable or assignable. Registered identification numbers shall be

subject to cancellation whenever any such number was procured or has

been used improperly or contrary to the requirements of the Acts

administered by the Federal Trade Commission, and regulations

promulgated thereunder, or when otherwise deemed necessary in the

public interest.

The proposed amendment would add a third sentence to read as

follows:

Registered identification numbers will be subject to

cancellation if the Federal Trade Commission fails to receive prompt

notification of any change in name, business address, or legal

business status of a person

or concern to whom a registered identification number has been

assigned by application duly executed in the form set out in

subsection (e) of this section, reflecting the current name,

business address, and legal business status of the person or

concern.

H. Use of Abbreviations for Fiber Content Identification

Although supporting the fiber content disclosure requirements, many

comments recommend that the Wool Rules be amended to allow

abbreviations of generic fiber names in fiber content

disclosures.35 Thirteen comments state that spelling out complete

fiber names in three languages for the marketing of covered products in

the NAFTA countries is unwieldy and that abbreviations of generic fiber

names would permit the required information to be conveyed on a smaller

label.36 One commenter contends that if abbreviations were

permitted, they could lead to a single label for NAFTA countries and

eventually to an international label.37

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\35\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.2: ATMI (10) p.4-5,

USA-ITA (11) p.2, FIELD (13) pp.4-5, FRUIT (14) p.3, AAMA (15) p.2,

TLC (16) pp.3-4, ISAC 17 (17) p.2, WEMCO (18) p.1, SARA (19) p.2,

HORACE (20) p.2, MILL (22) pp.4-5, ANGEL (24) p.1, RUSS (25) p.2,

HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.

\36\ WFC (6) p.1, USA-ITA (11) p.2, FRUIT (14) p.2, AAMA (15)

p.2, TLC (16) p.3, ISAC 17 (17) p.2, WEMCO (18) p.1, SARA (19) p.1,

ANGEL (24) p.1, RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER

(28) p.1.

\37\ ISAC 17 (17) p.2.

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Many comments urge that the FTC and the appropriate agencies in the

NAFTA countries adopt abbreviations for the most common fibers--

acrylic, cotton, nylon, polyester, rayon, silk, spandex, and wool--

which are said to represent more than 80% of all apparel and textile

products sold in the marketplace, and an abbreviation for designating

``other fibers'' that are present in amounts of less than 5% of total

fiber weight.38 The result would be three abbreviations, one in

each language--English, Spanish, and French--for the most common

generic fibers.39 Although abbreviations eventually could be

developed for other fibers, the comments emphasize the need to develop

abbreviations for the more common generic fibers first. Other fibers

that the Rules do not permit to be lumped together as ``other fibers''

can be

identified by their full fiber names.40 A few comments recommend

three- to four-letter abbreviations for fiber names; 41 one

commenter states that any abbreviations used for fiber identification

should not arbitrarily be limited to a specific number of

letters.42

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\38\ WFC (6) p.1, DR (8) p.1, ATMI (10) p.4, FIELD (13) pp.4-5,

FRUIT (14) p.3, AAMA (15) p.2, TLC (16) p.3, WEMCO (18) p.1, SARA

(19) p.2, MILL (22) pp.4-5, ANGEL (24) p.1, HAGGAR (26) p.1, CAP

(27) p.1, BIDER (28) p.1. Some comments omit acrylic from this list

of fibers. RUFF (9) p.2, HORACE (20) p.2, RUSS (25) p.2.

\39\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.2, ATMI (10) p.4, AAMA

(15) p.2, TLC (16) p.3, WEMCO (18) p.1, SARA, (19) p.2, ANGEL (24)

p.1, RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.

\40\ DR (8) p.1, ATMI (10) p.4, FIELD (13) p.5, FRUIT (14) p.3,

MILL (22) p.5.

\41\ FIELD (13) p.4, ISAC 17 (17) p.2.

\42\ AFMA (7) states, at p. 2, that ``[a]s labeling requirements

are simplified, the quality and consistency of information provided

to the consumer should be maintained,'' so as not to compromise

``the two decades of education and experiences developed under the

current system in the United States.''

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The comments recognize that when fiber names are entirely different

in different languages, arriving at common abbreviations may be

difficult.43 But the comments point out that when fiber names are

identical or similar, the same abbreviation could be used by more than

one country, thereby reducing the use of abbreviations on

labels.44

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\43\ AFMA (7) p.3.

\44\ WFC (6) p.1, AFMA (7) p.3, DR (8) p.1, RUFF (9) p.2, ATMI

(10) p.4, FIELD (13) p.4, FRUIT (14) p.3, AAMA (15) p.2, TLC (16)

p.3, WEMCO (18) p.1, SARA (19) p.2, HORACE (20) p.2, MILL (22) p.4,

ANGEL (24) p.1, RUSS (25) p.1, HAGGAR (26) p.1, CAP (27) p.1, BIDER

(28) p.1.

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Comments also recommend that the use of abbreviations should be

optional,45 and that manufacturers should be allowed to use full

labeling and still qualify for NAFTA benefits in all signatory

countries.46 To educate the public about the meaning of

abbreviations, the comments recommend that manufacturers or retailers

provide hangtags, explanatory charts, or other consumer education

labels for a limited period.47

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\45\ AAMA (15) p.2.

\46\ AFMA (7) p.3.

\47\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.1, ATMI (10) p.4, FIELD

(14) p.5, FRUIT (14) p.3, AAMA (15) p.2, TLC (16) p.4, WEMCO (18)

p.1, SARA (19) p.2, MILL (22) p.5, ANGEL (24) p.1, HAGGAR (26) p.1,

CAP (27) p.1, BIDER (28) p.1.

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The Commission believes that the use of abbreviations for fiber

names may benefit companies without harming consumers. The Commission

therefore proposes to amend Wool Rules 8 and 9 to allow the use of

abbreviations for generic fiber names. Generally, Wool Rule 9(a) does

not allow the use of abbreviations for disclosures of required

information.48 To allow the use of abbreviations for common

generic fiber names, the Commission proposes to amend Rules 8(a) and

9(a) to read as follows:

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\48\ Nevertheless, Wool Rule 25a(e) does allow abbreviations for

country of origin disclosure, but only when the abbreviations

``unmistakenly indicate the name of a country, such as Gt. Britain

for Great Britain.''

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[[Page 67745]]

Sec. 300.8 Use of Fiber Trademark and Generic Names.

(a) Except where another name is required or permitted under the

Act or regulations, the respective generic name of the fiber shall

be used when naming fibers in the required information; as for

example: wool,'' ``recycled wool,'' ``cotton,'' ``rayon,'' ``silk,''

``linen,'' ``acetate,'' ``nylon,'' and ``polyester,'' provided,

however, that the following abbreviations may be used for cotton,

wool, polyester, rayon, nylon, spandex, silk, and acrylic:

cotton--cot

wool--wl

polyester--poly

rayon--ryn

nylon--nyl

spandex--spdx

silk--slk

acrylic--acrl

* * * * *

Sec. 300.9 Abbreviations, Ditto Marks, Asterisks.

(a) In disclosing required information, words or terms may not

be designated by ditto marks or appear in footnotes referred to by

asterisks or other symbols in required information, and may not be

abbreviated except as permitted in Rule 8 and Rule 25a.

* * * * *

The Commission solicits comments on these proposed amendments, as

well as alternative amendment language, other suggestions for English-

language abbreviations for the above-listed fibers, and abbreviations

for the catch-all classifications, ``other fiber'' and ``other

fibers.'' The Commission also seeks submission of empirical data (copy

tests, etc.) about consumer understanding of abbreviations and the

impact that the use of abbreviations may have on consumers and firms.

In addition, the notice asks whether the use of abbreviations on the

required fiber content labels should be conditioned upon use of

explanatory hangtags, indefinitely or for a limited period of time, and

if the latter, for how long.

I. Use of Abbreviations and Symbols in Country of Origin Labeling

Wool Rule 25a requires that the name of the country where the wool

product was processed or manufactured be indicated on a label. The

comments support the optional use of three-letter abbreviations for

country of origin names (such as ``CAN'' for ``Canada,'' ``MEX'' for

``Mexico,'' and ``USA'' for ``United States''),49 and a symbol,

such as a solid flag, to denote the words ``made in'' or ``product of''

in country of origin disclosures.50 The commenters assert this

would facilitate trade under NAFTA by reducing the label size,

eliminating the need for three languages, and reducing consumer

confusion. The comments contend that consumer education programs could

be instituted to educate the consumer as to the meaning of the

abbreviations and the symbol.51 Only one comment opposed the use

of abbreviations of country names.52

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\49\ WFC (6) p.1, DR (8) p.1, RUFF (9)( p.1, ATMI (10) p.3,

FRUIT (14) p.4, AAMA (15) p.1, TLC (16) p.3, ISAC 17 (17) p.3, WEMCO

(18) p.1, SARA (19) p.2, ANGEL (24) p.1, RUSS (25) p.2, HAGGAR (26)

p.1, CAP (27) p.1, BIDER (28) p.1.

\50\ WFC (6) p.1, DR (8) p.1, RUFF (9) p.1, ATMI (10) p.3, FRUIT

(14) p.4, AAMA (15) p.1, TLC (16) p.3, ISAC 17 (17), p.3, WEMCO (18)

p.1, SARA (19) p.2, MILL (22) p.4, ANGEL (24) p.1, RUSS (25) p.2,

HAGGAR (26) p.1, CAP (27) p.1, BIDER (28) p.1.

\51\ RUFF (9) p.1.

\52\ MILL (22) pp.1-2, 4. MILL states, at p.1, that ``[a]nything

less than the complete country name would obscure for consumers the

country of origin information intended by the Congress in the

labeling acts and the current F.T.C. rules.''

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Wool Rule 25a permits abbreviations of country of origin names if

they ``unmistakenly indicate the name of a country.'' The Rule already

permits using the abbreviation ``USA'' to convey the origin of wool

products made in the United States. The Rule does not, however,

expressly indicate that the abbreviations ``CAN'' and ``MEX'' are

appropriate for ``Canada'' and ``Mexico'' or that symbols (such as a

solid flag for the words ``made in'' or ``product of'') may be used on

wool products to denote country of origin. Although the Commission

believes that it is very likely that the terms ``CAN'' and ``MEX''

would satisfy the Rule's requirement that a country of origin

abbreviation ``unmistakenly indicate the name of the country,'' the

Commission nonetheless solicits comment on the use of these

abbreviations or other specific suggestions of appropriate

abbreviations for ``Canada'' and ``Mexico.'' To ensure harmonization

between abbreviations that are permitted under the Wool Rules and those

used in the other NAFTA countries, the Commission also seeks comment on

whether Canadian and Mexican regulations allow abbreviations for

country of origin names. The Commission lacks sufficient information

regarding the feasibility of using symbols in country of origin

labeling and thus seeks comment on this issue. Finally, the Commission

seeks comment on the benefits and costs to consumers and firms of

adding specific country of origin abbreviations to the Wool Rules and

allowing symbols.53

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\53\ U.S. Customs regulations with regard to country of origin

marking also permit ``abbreviations which unmistakably indicate the

same of a country'' (19 CFR 134.45(b)). In the past, Customs has

ruled that ``CAN'' and ``MEX'' do not meet this standard. Pursuant

to 19 U.S.C. 1625, however, any interested party can request

reconsideration of this interpretation.

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J. Use of Terms ``Mohair'' and ``Cashmere''

Wool Act Section 2(b) defines wool as ``the fiber from the fleece

of the sheep or lamb or hair of the Angora or Cashmere goat (and may

also include the so-called specialty fibers from the hair of the camel,

alpaca, llama, and vicuna) * * * .'' The fiber content disclosure

requirement under the Wool Rules specifically provides for the marking

of a wool product with the use of the word ``wool'' or the term

``mohair'' or ``cashmere.'' 54

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\54\ Wool Rule 19(a) states: ``In setting forth the required

fiber content of a product containing hair of the Angora goat known

as mohair or containing hair or fleece of the Cashmere goat known as

cashmere, the term ``mohair'' or ``cashmere,'' respectively, may be

used in lieu of the word ``wool,'' provided, the respective

percentage of each fiber designated as ``mohair'' or cashmere'' is

given * * * .''

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The Commission is aware that animals are being bred for specialty

fibers that would not fit into the required word categories for marking

a wool product. For example, breeders have crossed female cashmere

goats with angora males to produce an animal called a ``cashgora.''

55 This animal fleece is asserted to have ``the luster of mohair

combined with the soft handle of cashmere * * * . Tests of the fiber

have resulted in recommendations that the fiber is particularly

suitable for knitted garments.'' 56

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\55\ See P. Tortora, Understanding Textiles, Fourth Edition at

106-107 (1992).

\56\ Id. At 107.

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Although the Commission did not receive any specific comments on

whether the Wool Rules should be amended to accommodate new specialty

fibers, the Commission is soliciting comments on whether Wool Rule 19

should be expanded to include other specialty fibers.

IV. Invitation to Comment and Questions for Comment

A. Invitation

Members of the public are invited to comment on any issues or

concerns they believe are relevant or appropriate to the Commission's

consideration of the proposed amendments to the Wool Rules. The

Commission requests that factual data upon which the comments are based

be submitted with the comments. In addition to the issues raised above,

the Commission solicits public comment on the specific questions

identified below. These questions are designed to assist the public and

should not be construed as a limitation on the issues on which public

comment may be submitted.

[[Page 67746]]

B. Questions

Use of Generic Fiber Names for Fibers With a Functional Significance

and Present in the Amount of Less than 5% of the Total Fiber Weight of

a Wool Product

1. Should the Commission amend Wool Rule 3(b) to allow

manufacturers to list the generic fiber name(s) of fiber(s) that have a

functional significance and are present in the amount of less than 5%

of the weight of the product, without also requiring disclosure of the

functional significance of the fiber(s)?

a. What benefits and costs to consumers and businesses would result

from such an amendment? Would the amendment have a significant economic

impact on a substantial number of small businesses? Can that impact be

quantified?

b. Is the proposed amendment language set out in this notice

appropriate? If not, what amendment language should be used?

Country of Origin Labeling

2. Do the abbreviations ``CAN'' and ``MEX,'' for ``Canada'' and

``Mexico,'' ``unmistakenly indicate the name'' of each of these NAFTA

countries?

a. Are there other abbreviations for ``Canada'' and ``Mexico'' that

would ``unmistakenly indicate the name'' of each country?

b. Do Canadian and Mexican regulations allow the use of

abbreviations for country of origin names?

c. What would be the benefits and costs to consumers and businesses

of allowing these or other abbreviations for ``Canada'' and ``Mexico''?

3. Should the Commission amend the Wool Rules to allow a symbol to

be used to mean ``made in'' or ``product of,'' or other similar

phrases, in country of origin labeling?

a. What would be the advantages and disadvantages of allowing the

use of a symbol?

b. If the Commission decides to allow the use of a symbol, which

symbol should be used?

c. What benefits and costs would allowing a symbol have for

businesses or for purchasers of the products affected by the Wool

Rules?

d. What actions can be taken to ensure that consumers understand

what the symbol means?

e. How would the use of a symbol work when manufacturers wish to

distinguish between the country of origin of an unfinished wool product

and the country where another phase of the manufacturing process takes

place, as in ``Made in the Dominican Republic of United States

components''?

Label Mechanics and Wool Rule 10(a)'s ``Fiber Content on Reverse Side''

Disclosure Requirement

4. Should the Commission amend Wool Rule 10(a) to eliminate the

requirement that the front side of a cloth label, sewn to the product

so that both sides of the label are readily accessible to the

prospective purchaser, bear the words ``Fiber Content on Reverse Side''

when the fiber content disclosure is listed on the reverse side of the

label? Is there a continuing need for such a requirement?

5. Should the Commission amend Wool Rule 10(a) to allow the

required fiber content information to appear on the reverse side of any

kind of allowable label as long as the information remains

``conspicuous and accessible?''

a. What benefits and costs to consumers and firms would result from

each of these alternative amendments? Would these amendments have a

significant economic impact on a substantial number of small

businesses? Can that impact be quantified?

6. Are there any rules or regulations concerning label attachment

in Canada or Mexico that conflict with the Wool Rules? If so, what are

they, and how do they conflict?

Identification Numbers of Manufacturers or Other Responsible Parties

7. If it were consistent with the Wool Act to do so, should the

Commission amend the Wool Rules to allow the interchangeable use of RN,

CA, or Mexican tax numbers?

a. What would be the advantages and disadvantages of a system of

shared information? Alternatively, what would be the advantages and

disadvantages of a system whereby one NAFTA country recognized and

allowed the identification numbers of another NAFTA country, provided

that the information would be made easily accessible to those seeking

it?

b. Would the implementation of a system of shared information

across national borders be feasible?

c. What impact would a system of shared information have on the

ability of consumers and businesses to track responsible parties?

d. What benefits and costs to consumers and businesses would result

from such an amendment? Would such an amendment have a significant

economic impact on a substantial number of small business entities?

Explain the nature and amount of such impact.

8. Is the proposed amendment to Wool Rule 4(c)--enabling the

Commission to cancel an RN where the information contained on the

original application is not properly updated--reasonable and

appropriate? Are there other alternatives that would enable the

Commission to maintain an accurate data base?

Fiber Identification Labeling

9. Should the Commission amend the Wool Rules to permit the

abbreviation of fiber names on fiber content identification labels?

a. What costs and benefits to consumers and businesses would accrue

from allowing the use of abbreviations for fiber content

identification? Would such an amendment have a significant economic

impact on a substantial number of small businesses? Can that impact be

quantified?

b. Are there existing abbreviations for fibers that would clearly

convey the required fiber content identification information?

c. Is the proposed amendment language set out in this notice

appropriate? If not, what amendment language should be used?

10. Do Canadian and Mexican regulations allow the use of

abbreviations of fiber names on fiber content identification labels?

11. Do any empirical data (copy tests, etc.) exist concerning

consumer understanding of fiber name abbreviations?

12. Should the Commission amend the Wool Rules to provide that the

required disclosures be printed on labels that are permanently attached

to wool products? Should a permanent label be required only for fiber

content identification or for all three required disclosures? Would

such an amendment have a significant economic impact on a substantial

number of small businesses? Can that impact be quantified?

Specialty Fibers Other Than ``Mohair'' and ``Cashmere''

13. Should the Commission amend Wool Rule 19 to include specialty

fibers other than mohair and cashmere?

V. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-12, requires

that the agency conduct an analysis of the anticipated economic impact

of the proposed amendments on small businesses.57 The purpose of a

[[Page 67747]]

regulatory flexibility analysis is to ensure that the agency considers

impact on small entities and examines regulatory alternatives that

could achieve the regulatory purpose while minimizing burdens on small

entities. However, Section 605 of the RFA, 5 U.S.C. 605, provides that

such an analysis is not required if the agency head certifies that the

regulatory action will not have a significant economic impact on a

substantial number of small entities.

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\57\ The RFA addresses the impact of rules on ``small

entities,'' defined as ``small businesses,'' ``small governmental

entities,'' and ``small [not-for-profit] organizations,'' 5 U.S.C.

601. The Wool Rules do not apply to the latter two types of

entities.

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Because the Wool Act, and the Wool Rules issued thereunder, cover

the manufacture, sale, offering for sale, and distribution of wool

products, the Commission believes that any amendments to the Wool Rules

may affect a substantial number of small businesses. Unpublished data

prepared by the U.S. Census Bureau under contract to the Small Business

Administration (SBA) show that there are some 94 broadwoven fabric

mills making wool products (SIC Code 2231), most of which qualify as

small businesses under applicable SBA size standards.58 In

addition, there are 254 narrow fabric mills (SIC Code 2241), producing

wool products as well as fabrics of other fibers, more than 80% of

which are small businesses. Furthermore, there are many apparel

manufacturers that are small businesses covered by the Wool Rules. For

example, there are some 288 manufacturers of men's and boys' suits and

coats (SIC Code 2311), more than 75% of which are small businesses.

There are more than 1,000 establishments manufacturing women's and

misses' suits, skirts, and coats (SIC Code 2337), most of which are

small businesses. Other small businesses are likely involved in the

distribution and sale of products subject to the Wool Rules.

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\58\ SBA's revised small business size standards are published

at 61 FR 3280 (January 31, 1996).

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However, the proposed amendments apparently would not have a

significant economic impact upon such entities. Comments received

during the regulatory review of the Wool Rules indicated that the

current costs of complying with the Rules and the Wool Act are minimal.

The proposed amendments should clarify existing requirements of the

Wool Rules and reduce further the costs of compliance with Wool Act

requirements.

The proposal to eliminate the required label disclosure of the

functional significance of a named fiber that constitutes less than 5%

of total fiber weight would not place any additional costs or burdens

upon companies covered by the Wool Rules. Manufacturers that wish to

disclose this information would remain free to do so. For those that do

not include the information, labeling costs for such products might be

reduced very slightly.

The proposal to eliminate the required disclosure, ``Fiber Content

on Reverse Side,'' on the front side of a label where the content is

found on the reverse side likewise would not place any additional costs

or burdens upon companies covered by the Wool Rules. Manufacturers that

choose to continue using this phrase would be able to do so. For those

that eliminate the phrase, labeling costs for wool products might be

reduced slightly.

In addition, the Commission is requesting comment on whether fiber

content information should be required to appear on a label that is

permanently attached to a wool product. Such a requirement would ensure

that the information remains available to consumers, as well as to

professional cleaners, throughout the life of the product. The

Commission believes that because of advances in labeling technology,

and because many manufacturers already make content disclosures on a

permanent label, such a new requirement would likely not prove costly

or burdensome for small businesses. However, the Commission is

specifically seeking comment as to the potential impact on small

businesses.

The Commission proposes to amend Section 4 of the Wool Rules--

governing the issuance of an RN number--to clarify that such numbers

are subject to cancellation if changes in the information provided in

the original application for the number are not reported to the

Commission. This amendment does not impose any new requirement upon

businesses. Furthermore, while Commission cancellation of an

identification number would require a business to re-apply, this may be

done simply by submitting the identifying information already called

for in the Rules. Therefore, amending the Rules as proposed will not

impose any significant economic costs on members of the industry.

The Commission also proposes to amend Sections 8 and 9 of the Wool

Rules to allow abbreviations for generic fiber names in fiber content

disclosures on labels. Similarly, the Commission seeks comment on the

optional use of abbreviations and symbols to indicate the country of

origin of the product. Section 25a of the Wool Rules already permits

country name abbreviations that ``unmistakenly indicate the name of a

country'' However, the Commission seeks comment on specific suggestions

for appropriate abbreviations for NAFTA countries, as well as the

possible use of a symbol, such as a flag, to denote the words ``made

in'' or ``product of,'' appearing before the country name. The use of

any abbreviations or symbols would be optional. Use of abbreviations or

symbols could reduce costs to manufacturers somewhat by enabling them

to shorten labels and facilitating the use of a smaller label for

products to be shipped among NAFTA countries.

Finally, the Commission seeks comment as to whether Section 19 of

the Wool Rules should be amended to recognize new specialty fibers

produced by the cross breeding of different varieties of wool-bearing

animals. Such a change, while likely important to a few firms, is not

expected to have a significant impact on the wool industry.

On the basis of available information, the Commission certifies

that amending the Wool Rules as proposed will not have a significant

economic impact on a substantial number of small businesses. To ensure

that no significant economic impact is being overlooked, however, the

Commission requests comments on this issue. The Commission also seeks

comments on possible alternatives to the proposed amendments to

accomplish the stated objectives within the statutory framework. After

reviewing any comments received, the Commission will determine whether

a final regulatory flexibility analysis is appropriate.

VI. Paperwork Reduction Act

The Wool Rules contain various information collection requirements

for which the Commission has obtained clearance under the Paperwork

Reduction Act (PRA), 44 U.S.C. 3501 et. seq., Office of Management and

Budget (OMB) Control Number 3084-0047. These requirements relate to the

accurate disclosure of material information about wool products,

including fiber content and country of origin disclosures. The Rules

also require manufacturers and other marketers of covered products to

maintain records that support claims made on labels. Many of the

disclosure requirements and all of the recordkeeping requirements are

specifically mandated by the Wool Act. See 15 U.S.C. 68b, 68d. The

Commission has also obtained OMB clearance for petitions concerning

whether or not representations of the fiber content of a class of

articles are commonly made, or whether or not the

[[Page 67748]]

textile content of certain products is insignificant or

inconsequential. A Notice soliciting public comment on extending these

clearances through December 31, 1999, was recently published in the

Federal Register. 61 FR 43764 (August 26, 1996).

The proposed amendments would not increase the paperwork burden

associated with these paperwork requirements and, in fact, would lower

the current burden estimate by either eliminating or reducing certain

disclosure requirements. Specifically, the Commission proposes to: (1)

eliminate the functional significance disclosure requirement of Section

3(b); (2) eliminate the ``Fiber Content on Reverse Side'' disclosure

requirement of Section 10(a); and (3) allow abbreviations for generic

fiber names. All of these proposed amendments would allow manufacturers

greater flexibility in labeling procedures. Manufacturers that wish to

disclose this information (relating to the functional significance of

certain fibers and the fact that fiber content is found on the reverse

side of the label) would remain free to do so. For those that do not

include the information, the labeling burden would be reduced.

The Commission's proposed amendment regarding the cancellation of

RN numbers does not impose a paperwork burden on holders of Registered

Identification Numbers. This is because the Wool Rules at 16 CFR 300.4

already require companies to notify the FTC about changes in business

names, addresses, company type, etc. The current proposal merely adds

the element of cancellation by the Commission if these requirements are

not met. Neither the initial filing procedures nor the requirement to

update the information are new and therefore, no ``burden'' is imposed.

More importantly, the underlying certification itself does not meet

the definition of ``information'' contained in the PRA. In implementing

the Paperwork Reduction Act of 1995, OMB attempted to clarify the

exemption for ``certifications'' in both the Notice of Proposed

Rulemaking, 60 FR 30438, 30439 (June 8, 1995) and the Final Rule, 61 FR

44978, 44979 (August 9, 1995) (``the exemption applies when the

certification is used to identify an individual in a `routine, non-

intrusive, non-burdensome way.' '') This language reflects current

guidance in OMB/OIRA's Information Collection Review Handbook (1989),

which discusses exempt categories of inquiry (5 CFR 1320.3(h) (1)-(10))

that are not deemed to constitute ``information.'' Certifications, as

well as other forms of acknowledgments, comprise one of these

categories.59 Such inquiries are considered to be routine because

response to the requests rarely requires examination of records,

usually does not require consideration about the correct answer, and

usually is provided on a form supplied by the government. See OMB/OIRA

Handbook, p. 29. Accordingly, OMB's regulations exempt certifications

from the clearance requirement, provided that no information need be

reported beyond certain basic identifying information.

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\59\ Specifically, the first category consists of: ``affidavits,

oaths, affirmations, certifications, receipts, changes of address,

consents, or acknowledgements.'' 5 CFR 1320(H)(1).

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VII. Additional Information for Interested Persons

A. Motions or Petitions

Any motions or petitions in connection with this proceeding must be

filed with the Secretary of the Commission.

B. Communications by Outside Parties to Commissioners or their Advisors

Pursuant to 1.18(c) of the Commission Rules of Practice, 16 CFR

1.18(c), communications with respect to the merits of this proceeding

from any outside party to any Commissioner or Commissioner's advisor

during the course of this rulemaking shall be subject to the following

treatment. Written communications, including written communications

from members of Congress, shall be forwarded promptly to the Secretary

for placement on the public record. Oral communications, not including

oral communications from members of Congress, are permitted only when

such oral communications are transcribed verbatim or summarized at the

discretion of the Commissioner or Commissioner's advisor to whom such

oral communications are made, and are promptly placed on the public

record, together with any written communications relating to such oral

communications. Memoranda prepared by a Commissioner or Commissioner's

advisor setting forth the contents of any oral communications from

members of Congress shall be placed promptly on the public record. If

the communication with a member of Congress is transcribed verbatim or

summarized, the transcript or summary will be placed promptly on the

public record.

List of Subjects in 16 CFR Part 300

Labeling, Trade practices, Wool.

Authority: 15 U.S.C. 68.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 96-32260 Filed 12-23-96; 8:45 am]

BILLING CODE 6750-01-P