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Textile Labeling Rules Amended to Address Fiber Content and Origin Disclosures

Wednesday, March 19, 2014
Sandler, Travis & Rosenberg Trade Report

The Federal Trade Commission announced March 14 a final rule amending the Textile Labeling Rules in an effort to give businesses more compliance options without imposing significant new obligations. The Textile Rules require that certain textiles sold in the U.S. carry labels disclosing the generic names and percentages by weight of the fibers in the product, the manufacturer or marketer name, and the country where the product was processed or manufactured.

Among the changes being made, which will become effective 30 days after the final rule is published in the Federal Register, are the following.

- amending the fiber content disclosures by (a) incorporating the updated ISO standard 2076:2010(E) establishing generic fiber names for manufactured fibers, (b) expressly stating that trim is generally exempt from fiber content disclosure requirements, (c) allowing certain hang-tags to disclose fiber names and trademarks and performance information without disclosing the product’s full fiber content, (d) clarifying a provision describing products containing virgin or new wool, and (e) stating that the use of a fiber trademark or generic fiber name in an advertisement will require a full disclosure of the required fiber content information at least once in the advertisement

- to reflect the FTC’s longstanding policy of ensuring the consistency of the Textile Rules and the customs regulations, stating that an imported product’s country of origin as determined under the laws and regulations enforced by U.S. Customs and Border Protection is the country where the product was processed or manufactured

- to better address electronic commerce, amending the definition of the terms “invoice” and “invoice or other paper” and stating explicitly that such documents can be issued electronically

- replacing the requirement that guarantors sign continuing guaranties under penalty of perjury with a requirement that they (a) guaranty that all textile fiber products that are now being sold or may in the future be sold or delivered to the buyer are not, and will not be, misbranded nor falsely nor deceptively advertised or invoiced, (b) acknowledge that furnishing a false guaranty is an unlawful, unfair and deceptive act or practice pursuant to the Federal Trade Commission Act, and (c) certify that they will actively monitor and ensure compliance with the Textile Act and Rules during the duration of the guaranty

The FTC decided not to adopt its proposal to make continuing guaranties effective for one year unless revoked earlier; as a result, such guaranties will remain effective until revoked. However, the Commission continues to have concerns that continuing guaranties remaining in effect indefinitely or until revoked may become less reliable over time, especially after the employees who originally provided the guaranty to a buyer or filed it with the Commission no longer work for the guarantor. If the FTC obtains evidence that continuing guaranties have become less reliable after this amendment takes effect it will revisit this issue and consider amending the Textile Rules’ continuing guaranty provisions accordingly.

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