Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts, 45106-45151 [E8-17562]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 73, Number 149 (Friday, August 1, 2008)]
[Rules and Regulations]
[Pages 45106-45151]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17562]



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Part II





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 65



Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat 
Meat, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, 
and Macadamia Nuts; Interim Final Rule

Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules 
and Regulations

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 65

[Docket No. AMS-LS-07-0081]
RIN 0581-AC26


Mandatory Country of Origin Labeling of Beef, Pork, Lamb, 
Chicken, Goat Meat, Perishable Agricultural Commodities, Peanuts, 
Pecans, Ginseng, and Macadamia Nuts

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Farm Security and Rural Investment Act of 2002 (2002 Farm 
Bill), the 2002 Supplemental Appropriations Act (2002 Appropriations), 
and the Food, Conservation and Energy Act of 2008 (2008 Farm Bill) 
amended the Agricultural Marketing Act of 1946 (Act) to require 
retailers to notify their customers of the country of origin of covered 
commodities. Covered commodities include muscle cuts of beef (including 
veal), lamb, chicken, goat, and pork; ground beef, ground lamb, ground 
chicken, ground goat, and ground pork; wild and farm-raised fish and 
shellfish; perishable agricultural commodities; macadamia nuts; pecans; 
ginseng; and peanuts. The implementation of mandatory country of origin 
labeling (COOL) for all covered commodities, except wild and farm-
raised fish and shellfish, was delayed until September 30, 2008.
    The 2008 Farm Bill contains a number of provisions that amended the 
COOL provisions in the Act. These changes include the addition of 
chicken, goat, macadamia nuts, pecans, and ginseng as covered 
commodities, the addition of provisions for labeling products of 
multiple origin, as well as a number of other changes that are 
discussed more fully in the Supplementary Information portion of this 
rule. However, the implementation date of September 30, 2008, was not 
changed by the 2008 Farm Bill. Therefore, in order to meet the 
September 30, 2008, implementation date and to provide the newly 
affected industries the opportunity to provide comments prior to 
issuing a final rule, the Department is issuing this interim final 
rule. This interim final rule contains definitions, the requirements 
for consumer notification and product marking, and the recordkeeping 
responsibilities of both retailers and suppliers for covered 
commodities. The provisions in this interim final rule do not affect 
the regulatory requirements for fish and shellfish that were published 
in the October 5, 2004, Federal Register.

DATES: This interim final rule is effective September 30, 2008. 
Comments must be submitted on or before September 30, 2008 to be 
assured of consideration. The requirements of this rule do not apply to 
covered commodities produced or packaged before September 30, 2008.

ADDRESSES: Comments should be submitted through the Internet at https://
www.regulations.gov. Send written comments to: Country of Origin 
Labeling Program, Room 2607-S; Agricultural Marketing Service (AMS), 
USDA; STOP 0254; 1400 Independence Avenue, SW., Washington, DC 20250-
0254, or by facsimile to 202/354-4693. All comments received will be 
posted on the Web site at: https://www.regulations.gov. Comments sent to 
the above location that specifically pertain to the information 
collection and recordkeeping requirements of this action should also be 
sent to the Desk Officer for Agriculture, Office of Information and 
Regulatory Affairs, Office of Management and Budget (OMB), New 
Executive Office Building, 725 17th Street, NW., Room 725, Washington, 
DC 20503.

FOR FURTHER INFORMATION CONTACT: Erin Morris, Associate Deputy 
Administrator, Poultry Programs, AMS, USDA, by telephone on 202/720-
5131, or via e-mail at: erin.morris@usda.gov.

SUPPLEMENTARY INFORMATION: The information that follows has been 
divided into three sections. The first section provides background 
information including questions and answers about this interim final 
rule, a summary of the history of this rulemaking, and a general 
overview of the law, including the changes contained in the 2008 Farm 
Bill. The second section provides a discussion of the rule's 
requirements, including a summary of changes from the October 30, 2003, 
proposed rule as well as a summary of the comments received in response 
to the relevant prior requests for comments associated with this 
rulemaking and the Agency's responses to these comments. The prior 
requests for comments include: The proposed rule published in the 
October 30, 2003, Federal Register (68 FR 61944); the interim final 
rule for fish and shellfish published in the October 5, 2004, Federal 
Register (69 FR 59708); the reopening of the comment period (for costs 
and benefits) for the interim final rule that was published in the 
November 27, 2006, Federal Register (71 FR 68431); the reopening of the 
comment period for all aspects of the interim final rule that was 
published in the June 20, 2007, Federal Register (72 FR 33851); and the 
reopening of the comment period for the proposed rule for all covered 
commodities that was published in the June 20, 2007, Federal Register 
(72 FR 33917). The last section provides for the required impact 
analyses including the Regulatory Flexibility Act, the Paperwork 
Reduction Act, Civil Rights Analysis, and the relevant Executive 
Orders.

I. Background

Questions and Answers Concerning This Interim Final Rule

What are the general requirements of Country of Origin Labeling?
    The 2002 and 2008 Farm Bills amended the Act to require retailers 
to notify their customers of the country of origin of beef (including 
veal), lamb, pork, chicken, goat, wild and farm-raised fish and 
shellfish, perishable agricultural commodities, peanuts, pecans, 
ginseng, and macadamia nuts. The implementation of mandatory COOL for 
all covered commodities except wild and farm-raised fish and shellfish 
was delayed until September 30, 2008. The law defines the terms 
``retailer'' and ``perishable agricultural commodity'' as having the 
meanings given those terms in section 1(b) of the Perishable 
Agricultural Commodities Act of 1930 (PACA) (7 U.S.C. 499 et seq.). 
Under PACA, a retailer is any person engaged in the business of selling 
any perishable agricultural commodity at retail. Retailers are required 
to be licensed when the invoice cost of all purchases of perishable 
agricultural commodities exceeds $230,000 during a calendar year. The 
term perishable agricultural commodity means fresh and frozen fruits 
and vegetables.
    Food service establishments are specifically exempted as are 
covered commodities that are ingredients in a processed food item. In 
addition, the law specifically outlines the criteria a covered 
commodity must meet to bear a ``United States country of origin'' 
designation.
How do I find out if my product is considered a covered commodity or if 
it is labeled accurately under the COOL law?
    This regulation contains the requirements for labeling covered 
commodities and for determining whether a product is subject to this 
rule. However, additional questions regarding

[[Page 45107]]

whether a product is considered a covered commodity or is labeled 
accurately under this regulation may be e-mailed to cool@usda.gov.
Given that the law exempts covered commodities from mandatory COOL if 
they are an ingredient in a processed food item, what is the definition 
of a processed food item and what types of products are considered 
processed food items?
    A processed food item is a retail item derived from a covered 
commodity that has undergone specific processing resulting in a change 
in the character of the covered commodity, or that has been combined 
with at least one other covered commodity or other substantive food 
component (e.g., chocolate, breading, tomato sauce), except that the 
addition of a component (such as water, salt, or sugar) that enhances 
or represents a further step in the preparation of the product for 
consumption, would not in itself result in a processed food item. 
Specific processing that results in a change in the character of the 
covered commodity includes cooking (e.g., frying, broiling, grilling, 
boiling, steaming, baking, roasting), curing (e.g., salt curing, sugar 
curing, drying), smoking (hot or cold), and restructuring (e.g., 
emulsifying and extruding). Examples of items excluded include: 
Meatloaf, meatballs, fabricated steak, breaded veal cutlets, corned 
beef, sausage, breaded chicken tenders, and teriyaki flavored pork 
loin; a salad mix that contains lettuce and a dressing packet, a salad 
mix that contains lettuce and carrots, a fruit cup that contains 
melons, bananas, and strawberries; a bag of mixed vegetables that 
contains peas and carrots; and roasted peanuts.
What requirements must be met for a retailer to label a covered 
commodity as being of United States origin?
    The law prescribes specific criteria that must be met for a covered 
commodity to bear a ``United States country of origin'' declaration. 
The specific requirements for covered commodities are as follows: 
Perishable agricultural commodities, pecans, ginseng, peanuts, and 
macadamia nuts--covered commodities must be produced in the United 
States; beef, lamb, pork, chicken, and goat--covered commodities must 
be derived exclusively from animals (1) born, raised, and slaughtered 
in the United States (including animals born and raised in Alaska and 
Hawaii and transported for a period of time not more than 60 days 
through Canada to the United States and slaughtered in the United 
States); or (2) present in the United States on or before July 15, 
2008, and once present in the United States, remained continuously in 
the United States.
How should I label a retail product that contains a single type of 
covered commodity (such as a bag of frozen strawberries) prepared from 
raw material sources having different origins?
    In this interim final rule, a single type of covered commodity 
(e.g., frozen peas), presented for retail sale in a consumer package, 
that has been prepared from raw material sources having different 
origins is referred to as a commingled covered commodity. Further, a 
commingled covered commodity does not include ground meat products. If 
the retail product contains two different types of covered commodities 
(e.g., peas and carrots), it is considered a processed food item and is 
not subject to mandatory COOL.
    In the case of perishable agricultural commodities, peanuts, 
pecans, ginseng, and macadamia nuts, for imported covered commodities 
that have not subsequently been substantially transformed in the United 
States that are commingled with imported and/or United States origin 
commodities, the declaration shall indicate the countries of origin for 
all covered commodities in accordance with Customs and Border 
Protection (CBP) marking regulations (19 CFR part 134).
What are the requirements for labeling ground meat products, which 
often contain raw material sources from multiple countries?
    The 2008 Farm Bill specifies that the notice of country of origin 
for ground beef, ground lamb, ground pork, ground goat, and ground 
chicken shall include a list of all of the countries of origin 
contained therein or reasonably contained therein. This interim final 
provides that when a raw material from a specific origin is not in a 
processor's inventory for more than 60 days, the country shall no 
longer be included as a possible country of origin.
Why can't the Department of Agriculture (USDA) track only imported 
products and consider all other products to be of ``United States 
Origin?''
    The COOL provision of the Farm Bill applies to all covered 
commodities. Moreover, the law specifically identifies the criteria 
that products of United States origin must meet. The law further states 
that ``Any person engaged in the business of supplying a covered 
commodity to a retailer shall provide information to the retailer 
indicating the country of origin of the covered commodity.'' And, the 
law does not provide authority to control the movement of product. In 
fact, the use of a mandatory identification system that would be 
required to track controlled product through the entire chain of 
commerce is specifically prohibited.
When will the requirements of this regulation take effect?
    The effective date of this regulation is September 30, 2008, 
because the statute provides for a September 30, 2008, implementation 
date. However, because some of the affected industries (goat, chicken, 
pecans, ginseng, and macadamia nuts) did not have prior opportunities 
to comment on this rulemaking and because the 2008 Farm Bill made 
changes to several of the labeling provisions for meat covered 
commodities, it is reasonable to allow time for covered commodities 
that are already in the chain of commerce and for which no origin 
information is known or been provided to clear the system. Therefore, 
the requirements of this rule do not apply to covered commodities 
produced or packaged before September 30, 2008. In addition, during the 
six month period following the effective date of the regulation, AMS 
will conduct an industry education and outreach program concerning the 
provisions and requirements of this rule. AMS has determined that this 
allocation of enforcement resources will ensure that the rule is 
effectively and rationally implemented. This AMS plan of outreach and 
education should significantly aid the industry in achieving compliance 
with the requirements of this rule.
How will the requirements of this regulation be enforced?
    USDA has entered into agreements with States having existing 
enforcement infrastructure to assist in compliance reviews for fish and 
shellfish covered commodities. These agreements will be expanded to 
encompass all covered commodities. USDA determines the number of 
reviews to be conducted and has developed comprehensive procedures for 
the compliance reviews. Only USDA is able to initiate enforcement 
actions against a person found to be in violation of the law. The COOL 
statute does not provide for a private right of action. USDA may also 
conduct investigations of complaints made by any person alleging 
violations of these regulations when the Secretary determines that 
reasonable grounds for such investigation exist.

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What are the recordkeeping requirements of this regulation?
    Any person engaged in the business of supplying a covered commodity 
to a retailer, whether directly or indirectly, must maintain records to 
establish and identify the immediate previous source (if applicable) 
and immediate subsequent recipient of a covered commodity for a period 
of 1 year from the date of the transaction. In addition, the supplier 
of a covered commodity that is responsible for initiating a 
country(ies) of origin claim, which in the case of beef, lamb, chicken, 
goat, and pork is the slaughter facility, must possess or have legal 
access to records that are necessary to substantiate that claim. In the 
case of beef, lamb, chicken, goat, and pork, a producer affidavit shall 
be considered acceptable evidence on which the slaughter facility may 
rely to initiate the origin claim, provided it is made by someone 
having first-hand knowledge of the origin of the animal(s) and 
identifies the animal(s) unique to the transaction.
    USDA continues to look for ways to minimize the burden associated 
with this rule. Therefore, under this interim final rule, slaughter 
facilities that slaughter animals that are part of a National Animal 
Identification System (NAIS) compliant system or other recognized 
official identification system (e.g., Canadian official system, Mexico 
official system) may also rely on the presence of an official ear tag 
and/or the presence of any accompanying animal markings (i.e., ``Can'', 
``M''), as applicable, on which to base their origin claims. This 
provision also applies to such animals officially identified as a group 
lot.
    For retailers, records and other documentary evidence relied upon 
at the point of sale by the retailer to establish a covered commodity's 
country(ies) of origin must be maintained for one year from the date 
the origin declaration is made at retail and, upon request, provided to 
any duly authorized representatives of USDA within 5 business days of 
the request.
    For pre-labeled products, the label itself is sufficient evidence 
on which the retailer may rely to establish a product's origin. Pre-
labeled products are those covered commodities that are labeled for 
country of origin by the firm or entity responsible for making the 
initial claim or by a further processor or repacker (i.e., firms that 
receive bulk products and package the products as covered commodities 
in a form suitable for the retailer). The country of origin information 
of pre-labeled covered commodities must be legibly printed on the 
shipping container, immediate container, or consumer ready package. In 
addition to indicating country of origin information, pre-labeled 
products must contain sufficient supplier information to allow USDA to 
trace-back the product to the supplier initiating the claim. Records 
that identify the covered commodity, the supplier, and for products 
that are not pre-labeled, the country of origin information must be 
maintained for a period of 1 year from the date the origin declaration 
is made at retail. Retailer and supplier records may be maintained in 
any location.
How does this regulation impact existing State country of origin 
labeling programs?
    To the extent that State country of origin labeling programs 
encompass commodities that are not governed by this regulation, the 
States may continue to operate them. For those State country of origin 
labeling programs that encompass commodities that are governed by this 
regulation, these programs are preempted. However, this preemption does 
not apply to State marketing programs for commodities such as 
Washington apples, Idaho potatoes, etc.
    While the COOL statute does not contain an express preemption 
provision, it is clear from the language in the statute that Congress 
intended preemption of State law. The law assigns enforcement 
responsibilities to the Secretary and encourages the Secretary to enter 
into partnerships with States with enforcement infrastructure to assist 
in the administration of the program. The law provides for a 30-day 
period in which retailers and suppliers may take the necessary 
corrective action after receiving notice of a nonconformance. The 
Secretary can impose a civil penalty only if the retailer or supplier 
has not made a good faith effort to comply, and only after the 
Secretary provides notice and an opportunity for a hearing. Allowing 
private rights of actions would frustrate the purpose of this 
comprehensive enforcement system in which Congress struck a delicate 
balance of imposing a requirement, but ensuring that the agency had 
wide latitude in enforcement discretion. Thus, it is clear that State 
laws and other actions were intended to be preempted.

Prior Documents in This Proceeding

    This interim final rule is issued pursuant to the 2002 Farm Bill, 
the 2002 Appropriations, and the 2008 Farm Bill, which amended the Act 
to require retailers to notify their customers of the origin of covered 
commodities. In addition, the FY 2004 Consolidated Appropriations Act 
(Pub. L. 108-199) delayed the implementation of mandatory country of 
origin labeling (COOL) for all covered commodities except wild and 
farm-raised fish and shellfish until September 30, 2006. The 
Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Appropriations Act of 2006 (Pub. L. 109-97) delayed 
the applicability of mandatory COOL for all covered commodities except 
wild and farm-raised fish and shellfish until September 30, 2008.
    On October 11, 2002, AMS published Guidelines for the Interim 
Voluntary Country of Origin Labeling of Beef, Lamb, Pork, Fish, 
Perishable Agricultural Commodities, and Peanuts (67 FR 63367) 
providing interested parties with 180 days to comment on the utility of 
the voluntary guidelines.
    On November 21, 2002, AMS published a notice requesting emergency 
approval of a new information collection (67 FR 70205) providing 
interested parties with a 60-day period to comment on AMS' burden 
estimates associated with the recordkeeping requirements as required by 
the Paperwork Reduction Act of 1995 (PRA). On January 22, 2003, AMS 
published a notice extending this comment period (68 FR 3006) an 
additional 30 days.
    On October 30, 2003, AMS published the proposed rule for the 
mandatory COOL program (68 FR 61944) with a 60-day comment period. On 
December 22, 2003, AMS published a notice extending the comment period 
(68 FR 71039) an additional 60 days. On June 20, 2007, AMS reopened the 
comment period for the proposed rule for all covered commodities (72 FR 
33917).
    On October 5, 2004, AMS published the interim final rule for fish 
and shellfish (69 FR 59708) with a 90-day comment period. On December 
28, 2004, AMS published a notice extending the comment period (69 FR 
77609) an additional 60 days. On November 27, 2006, the comment period 
was reopened on the costs and benefits aspects of the interim final 
rule (71 FR 68431). On June 20, 2007, the comment period was reopened 
for all aspects of the interim final rule (72 FR 33851).

Overview of the Law

    Section 10816 of Public Law 107-171 (7 U.S.C. 1638-1638d) and 
Section 11002 of Public Law 110-234 amended the Act (7 U.S.C. 1621 et 
seq.) to require retailers to inform consumers of the

[[Page 45109]]

country of origin of covered commodities.
    The intent of this law is to provide consumers with additional 
information on which to base their purchasing decisions. COOL is a 
retail labeling program and as such does not provide a basis for 
addressing food safety. Food products, both imported and domestic, must 
meet the food safety standards of the Food and Drug Administration 
(FDA) and the Food Safety and Inspection Service (FSIS).
    Under the 2002 Farm Bill, the term ``covered commodity'' was 
defined as muscle cuts of beef (including veal), lamb, pork; ground 
beef, ground lamb, ground pork; farm-raised fish and shellfish; wild 
fish and shellfish; perishable agricultural commodities; and peanuts. 
The 2008 Farm Bill added muscle cuts and ground chicken and goat; 
pecans; ginseng; and macadamia nuts as covered commodities. The law 
excludes items from needing to bear a country of origin declaration 
when a covered commodity is an ``ingredient in a processed food item.'' 
The law defines the terms ``retailer'' and ``perishable agricultural 
commodity'' as having the meanings given those terms in PACA.
    The law specifically outlines the criteria a covered commodity must 
meet in order to bear a ``United States country of origin'' 
declaration. In the case of perishable agricultural commodities, 
peanuts, pecans, ginseng, and macadamia nuts, the covered commodity 
must be exclusively produced in the United States. In addition, under 
the 2008 Farm Bill, for perishable agricultural commodities, peanuts, 
pecans, macadamia nuts, and ginseng produced in the United States, 
designation of the State, region, or locality of the United States 
where such commodity was produced shall be sufficient to identify the 
country of origin.
    In the case of beef, lamb, pork, chicken, and goat, covered 
commodities, the law states that they may bear a U.S. origin 
declaration only if they are derived exclusively from animals born, 
raised, and slaughtered in the United States (including animals born 
and raised in Alaska and Hawaii and transported for a period of time 
not more than 60 days through Canada to the United States and 
slaughtered in the United States). In addition, under the 2008 Farm 
Bill, animals present in the United States on or before July 15, 2008, 
and once present in the United States, remained continuously in the 
United States, are also eligible to bear a United States origin 
declaration.
    The 2008 Farm Bill provided further direction on country of origin 
labeling for meat covered commodities. These changes include additional 
provisions concerning labeling meat covered commodities that have 
multiple countries of origin and specify that a retailer of a covered 
commodity derived from an animal that is imported into the United 
States for immediate slaughter shall designate the origin of such 
covered commodity as the country from which the animal was imported and 
the United States. In addition, the 2008 Farm Bill specifies that meat 
covered commodities derived from an animal that was not born, raised, 
or slaughtered in the United States shall designate a country other 
than the United States as the country of origin.
    The 2008 Farm Bill also specifies how ground meat products shall be 
labeled. The notice of country of origin for ground beef, ground pork, 
ground lamb, ground chicken, or ground goat shall include a list of all 
countries of origin contained therein or a list of all reasonably 
possible countries of origin contained therein.
    To convey the country of origin information, the law states that 
retailers may use a label, stamp, mark, placard, or other clear and 
visible sign on the covered commodity or on the package, display, 
holding unit, or bin containing the commodity at the final point of 
sale to consumers. Food service establishments, such as restaurants, 
cafeterias, food stands, and other similar facilities are exempt from 
these labeling requirements.
    The law makes reference to the definition of ``retailer'' in 
section 1(b) of PACA as the meaning of ``retailer'' for the application 
of the labeling requirements under the COOL law. Under PACA and thus 
this interim final rule, a retailer is any person engaged in the 
business of selling any perishable agricultural commodity at retail. 
Retailers are required to be licensed when the invoice cost of all 
purchases of perishable agricultural commodities exceeds $230,000 
during a calendar year. Therefore, retail establishments, such as 
butcher shops, which do not generally sell fruits and vegetables, do 
not meet the PACA definition of a retailer and therefore are not 
subject to this rule.
    The law requires any person engaged in the business of supplying a 
covered commodity to a retailer to provide the retailer with the 
product's country of origin information. In addition, the law states 
the Secretary of Agriculture may conduct an audit of any person that 
prepares, stores, handles, or distributes a covered commodity for 
retail sale to verify compliance with the law and this regulation. Any 
person subject to such an audit shall provide the Secretary with 
verification of the country of origin of covered commodities. The 2008 
Farm Bill states that records maintained in the course of the normal 
conduct of the business of such person, including animal health papers, 
import or customs documents, or producer affidavits, may serve as such 
verification. The law prohibits the Secretary from using a mandatory 
identification system to verify the country of origin of a covered 
commodity. Under the 2008 Farm Bill, the Secretary is prohibited from 
requiring the maintenance of additional records other than those 
maintained in the normal conduct of business. The law provides examples 
of existing certification programs that may be used to certify the 
country of origin of a covered commodity.
    The 2008 Farm Bill also modified the enforcement provisions for 
both retailers and suppliers. Under the 2002 Farm Bill, civil penalties 
up to $10,000 per violation were specified for retailers and suppliers. 
Under the 2008 Farm Bill, civil penalties have been reduced to up to 
$1,000 for each violation. In addition, the 2008 Farm Bill specifies 
that the Secretary must provide retailers and suppliers with a 30-day 
period during which the retailer or supplier can take the necessary 
steps to comply with the law after receiving notice from the Secretary. 
Under the 2002 Farm Bill, only retailers were provided with this 30-day 
period. In addition, the 2008 Farm Bill states that the Secretary may 
fine a retailer or supplier, after providing notice and an opportunity 
for a hearing, only if the retailer or supplier has not made a good 
faith effort to comply with the law and continues to willfully violate 
the law. The law also encourages the Secretary to enter into 
partnerships with States with enforcement infrastructure to the extent 
possible to assist in the program's administration.

II. Summary of Changes From the Proposed Rule

    As previously mentioned, the 2008 Farm Bill made a number of 
changes to the COOL provisions contained in the Act. These changes have 
been incorporated into this interim final rule as appropriate. In 
addition, the Agency has made other modifications for clarity and to 
reduce the burden on regulated parties where practicable as the added 
costs of implementing this rule will likely be passed on to consumers. 
Many of these changes were incorporated in the interim final rule for 
fish and shellfish that was published in the October 5, 2004, Federal 
Register (69 FR 89708). Thus, readers may find it

[[Page 45110]]

helpful to review the interim final rule for fish and shellfish for 
further discussions of some of the changes that were made from the 
proposed rule such as those changes made to the definition of a 
processed food item and to the recordkeeping provisions.
    Further, enforcement of the interim final rule for fish and 
shellfish will be consistent with the statute as amended by the 2008 
Farm Bill. Comments are specifically requested concerning the revisions 
to recordkeeping provisions made herein. Any comments received pursuant 
to this rulemaking, to the extent relevant, will be reviewed in 
connection with the continuing regulatory action on the mandatory COOL 
program for fish and shellfish. A summary of the changes made in this 
interim final rule is discussed below.

Definitions

    The 2008 Farm Bill added muscle cuts and ground chicken and goat; 
pecans; macadamia nuts; and ginseng as covered commodities. Therefore, 
a definition for born in reference to chicken as well as definitions 
for chicken, ginseng, goat, ground chicken, and ground goat have been 
added for clarity. In addition, the definition of ``covered commodity'' 
has also been modified accordingly to include muscle cuts of beef 
(including veal), lamb, chicken, goat, and pork; ground beef, ground 
lamb, ground chicken, ground goat, and ground pork; perishable 
agricultural commodities; macadamia nuts; pecans; ginseng; and peanuts.
    The definitions of ``canned'' and ``produced in any other country 
other than the United States'' have been deleted as they have been 
determined to be unnecessary.
    A definition for ``commingled covered commodities'' and ``imported 
for immediate slaughter'' have been added for clarity.
    The following definitions have been deleted as the requirements for 
labeling wild and farm-raised fish and shellfish covered commodities 
were promulgated in a separate action: ``farm-raised fish'', 
``hatched'', ``processed (for fish and shellfish'', ``U.S. flagged 
vessel'', ``vessel flag'', ``waters of the United States'', and ``wild 
fish and shellfish''. In addition, other definitions such as ``covered 
commodity'', ``production step'', ``raised'', and ``United States 
country of origin'' have been modified to remove references to fish and 
shellfish.
    The definition of ``ground beef'' has been modified to provide 
clarity and to expand the scope of ground beef items covered by this 
rule. Under this interim final rule, the term ``ground beef'' has the 
meaning given that term in 9 CFR 319.15(a), i.e., chopped fresh and/or 
frozen beef with or without seasoning and without the addition of beef 
fat as such, and containing no more than 30 percent fat, and containing 
no added water, phosphates, binders, or extenders, and also includes 
products defined by the terms ``hamburger'' in 9 CFR 319.15(b) and 
``beef patties'' in 9 CFR 319.15(c). A full explanation of this change 
is discussed in the Comments and Responses section.
    The definition of ``processed food item'' has been modified to 
provide additional clarity as to the types of retail items that are 
considered processed food items and are therefore exempt from labeling 
under this interim final rule. Based on the comments received on the 
proposed rule in which numerous commenters suggested that the scope of 
what is considered a covered commodity should be narrowed and because 
the Department was concerned about the burden of this rule on affected 
entities as the added costs of implementing this rule will likely be 
passed on to consumers, AMS is adopting the definition of a processed 
food item in this interim final rule that was promulgated in the 
interim final rule for fish and shellfish. Thus, under this interim 
final rule, items that are cooked, cured, smoked, and restructured 
would all be considered processed food items. Under the proposed rule, 
items that were cooked would have been required to be labeled. A full 
explanation of this change is discussed in the Comments and Responses 
section.
    The definition of ``raised'' has also been modified to provide 
clarity. The term ``raised'' is defined in this interim final rule for 
the purpose of providing clarity with respect to the specific 
production steps specified in the law, born, raised, and slaughtered, 
and how the origin of covered commodities shall be labeled. This 
definition does not impact any other labeling claims subject to 
approval by FSIS.
    Pursuant to the 2008 Farm Bill, the definition of ``United States 
country of origin'' has also been modified. Under this interim final 
rule, beef, pork, lamb, chicken, and goat derived from animals present 
in the United States on or before July 15, 2008, and once present in 
the United States, remained continuously in the United States, shall be 
considered of United States origin. The 2002 Farm Bill and thus the 
October 30, 2003, proposed rule, did not contain such a provision. This 
provision will help address the issue of the lack of origin information 
on some animals currently residing in the United States.

Country of Origin Notification for Muscle Cuts and Ground Meat

    The October 30, 2003, proposed rule contained provisions for 
labeling covered commodities when the product entered the United States 
during the production process. In general, animals that were born and/
or raised in country X and slaughtered in the United States were to be 
labeled as being imported from country X and identifying the production 
steps that occurred in the United States. The 2008 Farm Bill contains 
provisions on labeling covered commodities of multiple countries of 
origin. Under this interim final rule, if an animal was born, raised, 
and/or slaughtered in the United States and was not imported for 
immediate slaughter as defined in Sec.  65.180, the origin of the 
resulting meat products derived from that animal may be designated as 
Product of the United States, Country X, and/or (as applicable) Country 
Y, where Country X and Country Y represent the actual or possible 
countries of foreign origin.
    If an animal was imported into the United States for immediate 
slaughter as defined in Sec.  65.180, the origin of the resulting meat 
products derived from that animal shall be designated as Product of 
Country X and the United States.
    In both cases above, the origin declaration may include more 
specific information related to production steps provided records to 
substantiate the claims are maintained and the claim is consistent with 
other applicable Federal legal requirements.

Labeling Ground Meat Covered Commodities

    The proposed rule contained provisions for labeling commingled 
products--including ground beef. However, the 2008 Farm Bill specifies 
how ground meat items shall be labeled.
    Under this interim final rule, the declaration for ground beef, 
ground pork, ground lamb, ground goat, and ground chicken covered 
commodities shall list all countries of origin contained therein or 
that may be reasonably contained therein. Further, this interim final 
rule provides that when a raw material from a specific origin is not in 
a processor's inventory for more than 60 days, the country shall no 
longer be included as a possible country of origin. Under the proposed 
rule, the label for these products was required to include an 
alphabetical listing of the countries of origin for all raw materials 
contained therein.

[[Page 45111]]

Labeling Comingled Covered Commodities

    For covered commodities other than meat items, this interim final 
rule, to a great extent, includes the labeling provisions for 
commingled covered commodities that were developed in the interim final 
rule for fish and shellfish based on comments received on the proposed 
rule. Most of the commenters requested greater flexibility in labeling 
these types of products. Other commenters expressed concern as to 
whether listing the countries in alphabetical order is acceptable under 
FDA and CBP regulations. For a more complete discussion of the 
rationale for this change, readers are invited to review the interim 
final rule for fish and shellfish (69 FR 59708), which is posted on the 
AMS Web site at https://www.ams.usda.gov/AMSv1.0/. Further, changes are 
made in this regulation to make clear that in those instances in which 
CBP marking regulations apply pursuant to 19 CFR part 134, this 
regulation does not impose any additional marking requirements. 
Accordingly, under this interim final rule, for imported covered 
commodities that are commingled with covered commodities (of the same 
type) sourced from a different origin the declaration shall indicate 
the countries of origin in accordance with existing CBP marking 
regulations (19 CFR part 134).

Markings

    With regard to markings, in addition to the change made by the 2008 
Farm Bill with respect to State, region, and locality labels, which is 
further discussed below, the Agency has made several changes to provide 
for increased flexibility in labeling. In general, these changes mirror 
the changes that were made to the marking provisions contained in the 
interim final rule for fish and shellfish as a result of comments 
received on the proposed rule. Many commenters requested the use of 
check boxes to convey origin information. Other commenters requested 
that bulk commodities should be allowed to be commingled in bins as 
long as the signage indicates the countries of origin of the contents 
of the bin. Numerous other commenters recommended that State and 
regional designations should be accepted in lieu of country of origin. 
For a more complete discussion of the relevant comments, readers are 
invited to review the interim final rule for fish and shellfish.
    Accordingly, under this interim final rule, the declaration of the 
country of origin of a product may be in the form of a check box 
provided it is in conformance with other Federal labeling laws. Also, 
under this final rule, a bulk container (e.g., display case, shipper, 
bin, carton, and barrel), used at the retail level to present product 
to consumers, may contain a covered commodity from more than one 
country of origin provided all possible origins are listed. Under the 
proposed rule, the use of check boxes was not expressly allowed and 
covered commodities from more than one origin that were offered for 
sale in a bulk container were required to be individually labeled.
    Under the proposed rule, State or regional label designations were 
not permitted in lieu of country of origin. However, the 2008 Farm 
Bill, and thus this interim final rule, expressly authorize the use of 
State, regional, or locality label designations in lieu of country of 
origin for perishable agricultural commodities, peanuts, pecans, 
ginseng, and macadamia nuts.

Recordkeeping

    The 2008 Farm Bill made changes to the recordkeeping provisions of 
the Act. Specifically, the 2008 Farm Bill states that records 
maintained in the course of the normal conduct of the business of such 
person, including animal health papers, import or customs documents, or 
producer affidavits, may serve as such verification. Under the 2008 
Farm Bill, the Secretary is prohibited from requiring the maintenance 
of additional records other than those maintained in the normal conduct 
of business. In addition to the changes made as a result of the 2008 
Farm Bill, other changes have been made to reduce the recordkeeping 
burden. In general, these changes, to a great extent, include the 
changes that were made to the recordkeeping provisions contained in the 
interim final rule for fish and shellfish as a result of comments 
received on the proposed rule. The majority of the commenters 
recommended shorter retention times for both retailer and supplier 
records. Other commenters expressed concern that the preamble for the 
proposed rule provided no explanation of the records that would be 
necessary to establish the chain of custody of a product. For a more 
complete discussion of the relevant comments, readers are invited to 
review the interim final rule for fish and shellfish. These changes 
include the removal of the store-level recordkeeping requirement, a 
reduction in the length of time that records must be maintained, the 
removal of the requirement for a unique identifier, and revisions to 
the recordkeeping requirements for pre-labeled products.
    With respect to establishing the chain of custody of a product, in 
response to comments received, the Agency has deleted this language 
from the rule. Any person engaged in the business of supplying a 
covered commodity to a retailer, whether directly or indirectly, must 
maintain records to establish and identify the immediate previous 
source and immediate subsequent recipient of a covered commodity for a 
period of 1 year from the date of the transaction. Under the proposed 
rule, records would have been required to be kept for 2 years.
    For retailers, this rule requires records and other documentary 
evidence relied upon at the point of sale by the retailer to establish 
a covered commodity's country(ies) of origin must be maintained for one 
year from the date the origin declaration is made at retail and, upon 
request, provided to any duly authorized representatives of USDA within 
5 business days of the request. Under the proposed rule, retailers were 
required to have maintained these records at the retail store for 7 
days following the sale of the product. For pre-labeled products, the 
rule provides that the label itself is sufficient evidence on which the 
retailer may rely to establish a product's origin. The proposed rule 
would not have provided for this method of substantiation. The rule now 
requires that records identify the covered commodity, the supplier, and 
for products that are not pre-labeled, the country of origin 
information. This information must be maintained for a period of 1 year 
from the date the origin designations are made at retail. Under the 
proposed rule, these records would have been required to be maintained 
for 2 years.
    Accordingly, under this interim final rule, upon request by USDA 
representatives, suppliers and retailers subject to this subpart shall 
make available to USDA representatives, records maintained in the 
normal course of business that verify an origin claim. Such records 
shall be provided within 5 business days of the request and may be kept 
in any location.
    USDA continues to look for ways to minimize the burden associated 
with this rule. Therefore, under this interim final rule, in addition 
to relying on producer affidavits to initiate an origin claim, 
slaughter facilities that slaughter animals that are part of a National 
Animal Identification System (NAIS) compliant system or other 
recognized official identification system (e.g., Canadian official 
system, Mexico official system) may also rely on the presence of an 
official ear tag and/or the presence of any accompanying animal

[[Page 45112]]

markings (i.e., ``Can'', ``M''), as applicable, on which to base their 
origin claims. This provision also applies to such animals officially 
identified as a group lot.

Responsibilities of Retailers and Suppliers

    With regard to the ``safe harbor'' language contained in the 
proposed rule, which allows retailers and suppliers to rely on the 
information provided unless they could have been reasonably expected to 
have knowledge otherwise, based on comments received, this ``safe 
harbor'' language has been removed from this interim final rule. The 
commenters contend that because the statute states that retailers are 
not subject to fines unless the Secretary determines they have 
willfully violated the statute, the standard of willfulness is a higher 
bar to liability than the standard of negligence that is encompassed in 
the reasonable reliance standard utilized in the ``liability shield.'' 
A complete discussion is contained in the Comments and Responses 
section of this interim final rule.
Highlights of This Interim Final Rule
Covered Commodities
    The term ``covered commodity'' includes: Muscle cuts of beef, lamb, 
pork, chicken, and goat; ground beef, ground lamb, ground pork, ground 
chicken, and ground goat; perishable agricultural commodities (fresh 
and frozen fruits and vegetables); peanuts; pecans; ginseng; and 
macadamia nuts.
Exemption for Food Service Establishments
    Under this interim final rule, food service establishments are 
exempt from COOL labeling requirements. Food service establishments are 
restaurants, cafeterias, lunch rooms, food stands, saloons, taverns, 
bars, lounges, or other similar facilities operated as an enterprise 
engaged in the business of selling food to the public. Similar food 
service facilities include salad bars, delicatessens, meal preparation 
stations in which the retailer sets out ingredients for different meals 
and consumers assemble the ingredients into meals to take home, and 
other food enterprises located within retail establishments that 
provide ready-to-eat foods that are consumed either on or outside of 
the retailer's premises.
Exclusion for Ingredient in a Processed Food Item
    Items are excluded from labeling under this regulation when a 
covered commodity is an ingredient in a processed food item. Under this 
interim final rule, a ``processed food item'' is defined as: A retail 
item derived from a covered commodity that has undergone specific 
processing resulting in a change in the character of the covered 
commodity, or that has been combined with at least one other covered 
commodity or other substantive food component (e.g., chocolate, 
breading, tomato sauce), except that the addition of a component (such 
as water, salt, or sugar) that enhances or represents a further step in 
the preparation of the product for consumption, would not in itself 
result in a processed food item. Specific processing that results in a 
change in the character of the covered commodity includes cooking 
(e.g., frying, broiling, grilling, boiling, steaming, baking, 
roasting), curing (e.g., salt curing, sugar curing, drying), smoking 
(cold or hot), and restructuring (e.g., emulsifying and extruding). 
Examples of items excluded from country of origin labeling include 
teriyaki flavored pork loin, meatloaf, roasted peanuts, breaded chicken 
tenders, fruit medley, mixed vegetables, and a salad mix that contains 
lettuce and carrots and/or salad dressing.
Labeling Covered Commodities of United States Origin
    The law prescribes specific criteria that must be met for a covered 
commodity to bear a ``United States country of origin'' declaration. 
Therefore, covered commodities may be labeled as having a United States 
origin if the following specific requirements are met:
    (a) Beef, pork, lamb, chicken, and goat--covered commodities must 
be derived from animals exclusively born, raised, and slaughtered in 
the United States; from animals born and raised in Alaska or Hawaii and 
transported for a period of time not more than 60 days through Canada 
to the United States and slaughtered in the United States; or from 
animals present in the United States on or before July 15, 2008, and 
once present in the United States, remained continuously in the United 
States.
    (b) Perishable agricultural commodities, peanuts, pecans, ginseng, 
and macadamia nuts--covered commodities must be from products 
exclusively produced in the United States.
Labeling Muscle Cut Covered Commodities of Multiple Countries of Origin 
(That Includes the United States)
    Under this interim final rule, if an animal was born, raised, and/
or slaughtered in the United States and was not imported for immediate 
slaughter as defined in Sec.  65.180, the origin of the resulting meat 
products derived from that animal may be designated as Product of the 
United States, Country X, and/or (as applicable) Country Y, where 
Country X and Country Y represent the actual or possible countries of 
foreign origin.
    If an animal was imported into the United States for immediate 
slaughter as defined in Sec.  65.180, the origin of the resulting meat 
products derived from that animal shall be designated as Product of 
Country X and the United States.
    In both cases above, the origin declaration may include more 
specific information related to production steps provided records to 
substantiate the claims are maintained and the claim is consistent with 
other applicable Federal legal requirements.
Labeling Imported Covered Commodities
    Under this interim final rule, an imported covered commodity for 
which origin has already been established as defined by this law (e.g., 
born, raised, slaughtered or grown) and for which no production steps 
have occurred in the United States shall retain its origin as declared 
to U.S. Customs and Border Protection (CBP) at the time the product 
enters the United States, through retail sale.
    Covered commodities imported in consumer-ready packages are 
currently required to bear a country of origin declaration on each 
individual package under the Tariff Act of 1930 (Tariff Act). This 
interim final rule does not change these requirements.
Labeling Commingled Covered Commodities
    In this interim final rule, a commingled covered commodity is 
defined as a single type of covered commodity (e.g., frozen peas), 
presented for retail sale in a consumer package, that has been prepared 
from raw material sources having different origins. Further, a 
commingled covered commodity does not include ground meat products. If 
the retail product contains two different types of covered commodities 
(e.g., peas and carrots), it is considered a processed food item and is 
not subject to mandatory COOL.
    In the case of perishable agricultural commodities, peanuts, 
pecans, ginseng, and macadamia nuts, for imported covered commodities 
that have not subsequently been substantially transformed in the United 
States that are commingled with imported and/or United States origin 
commodities, the declaration shall indicate the countries

[[Page 45113]]

of origin for all covered commodities in accordance with CBP marking 
regulations (19 CFR part 134). For example, a bag of frozen peas that 
were sourced from France and India is currently required under CBP 
regulations to be marked with that origin information on the package.
Defining Country of Origin for Ground Meat Products
    The law states that the origin declaration for ground beef, ground 
pork, ground lamb, ground goat, and ground chicken covered commodities 
shall list the countries of origin contained therein or shall list the 
reasonably possible countries of origin. Therefore, under this interim 
final rule, when a raw material from a specific origin is not in a 
processor's inventory for more than 60 days, the country shall no 
longer be included as a possible country of origin. This does not mean 
that labels must change every 60 days. Labels containing the applicable 
countries (e.g., Country X, Y, Z) may extend beyond a given 60-day 
period depending on how long raw materials from those countries are 
actually in inventory. In the event of a supplier audit by USDA, 
records kept in the normal course of business should provide the 
information necessary to verify the origin claim.
Remotely Purchased Products
    For sales of a covered commodity in which the customer purchases a 
covered commodity prior to having an opportunity to observe the final 
package (e.g., Internet sales, home delivery sales, etc.) the retailer 
may provide the country of origin notification either on the sales 
vehicle or at the time the product is delivered to the consumer.
Markings
    Under this interim final rule, the country of origin declaration 
may be provided to consumers by means of a label, placard, sign, stamp, 
band, twist tie, pin tag, or other clear and visible sign on the 
covered commodity or on the package, display, holding unit, or bin 
containing the commodity at the final point of sale to consumers. In 
general, abbreviations are not acceptable. Only those abbreviations 
approved for use under CBP rules, regulations, and policies, such as 
``U.K.'' for ``The United Kingdom of Great Britain and Northern 
Ireland'', ``Luxemb'' for Luxembourg, and ``U.S.'' for the ``United 
States'' are acceptable. The declaration of the country of origin of a 
product may be in the form of a statement such as ``Product of USA,'' 
``Produce of the USA'', or ``Grown in Mexico''; may only contain the 
name of the country such as ``USA'' or ``Mexico''; or may be in the 
form of a check box provided it is in conformance with CBP marking 
regulations and other Federal labeling laws (i.e., FDA, FSIS). For 
example, CBP marking regulations (19 CFR part 134) specifically require 
the use of the words ``product of'' in certain circumstances. The 
adjectival form of the name of a country may be used as proper 
notification of the country of origin of imported commodities provided 
the adjectival form of the name does not appear with other words so as 
to refer to a kind or species of product. Symbols or flags alone may 
not be used to denote country of origin. The labeling requirements 
under this rule do not supersede any existing Federal legal 
requirements, unless otherwise specified, and any country of origin 
designation must not obscure or intervene with other labeling 
information required by existing regulatory requirements.
    For domestic and imported perishable agricultural commodities, 
macadamia nuts, peanuts, pecans, and ginseng, State, regional, or 
locality label designations are acceptable in lieu of country of origin 
labeling.
    In order to provide the industry with as much flexibility as 
possible, this rule does not contain specific requirements as to the 
exact placement or size of the country of origin declaration. However, 
such declarations must be legible and conspicuous, and allow consumers 
to find the country(ies) of origin easily and read it without strain 
when making their purchases, and provided that existing Federal 
labeling requirements must be followed. For example, the country of 
origin declaration may be located on the information panel of a package 
of frozen produce as consumers are familiar with such location for 
displaying nutritional and other required information. Likewise, in the 
case of store overwrap and other similar type products, which is the 
type of packaging used for fresh meat and poultry products, the 
information panel would also be an acceptable location for the origin 
declaration as this is a location that is currently utilized for 
providing other Federally-mandated labeling information (i.e., safe 
handling instructions, nutrition facts, and ingredients statement). 
However, to the extent practicable, the Agency encourages retailers and 
suppliers to place this information on the front of these types of 
packages, also known as the principal display panel, so it will be 
readily apparent to consumers.
Recordkeeping Requirements and Responsibilities
    The law states that the Secretary may conduct an audit of any 
person that prepares, stores, handles, or distributes a covered 
commodity for retail sale to verify compliance. As such, records 
maintained in the normal course of business that verify origin 
declarations are necessary in order to provide retailers with credible 
information on which to base origin declarations.
    Under this interim final rule, any person engaged in the business 
of supplying a covered commodity to a retailer, whether directly or 
indirectly (i.e., growers, distributors, handlers, packers, and 
processors, etc.), must make available information to the subsequent 
purchaser about the country(ies) of origin of the covered commodity. 
This information may be provided either on the product itself, on the 
master shipping container, or in a document that accompanies the 
product through retail sale provided it identifies the product and its 
country(ies) of origin.
    Any person engaged in the business of supplying a covered commodity 
to a retailer, whether directly or indirectly, must maintain records to 
establish and identify the immediate previous source (if applicable) 
and immediate subsequent recipient of a covered commodity for a period 
of 1 year from the date of the transaction.
    In addition, the supplier of a covered commodity that is 
responsible for initiating a country of origin declaration, which in 
the case of beef, lamb, pork, chicken, and goat is the slaughter 
facility, must possess or have legal access to records that are 
necessary to substantiate that claim. In the case of beef, lamb, 
chicken, goat, and pork, a producer affidavit shall be considered 
acceptable evidence on which the slaughter facility may rely to 
initiate the origin claim, provided it is made by someone having first-
hand knowledge of the origin of the animal(s) and identifies the 
animal(s) unique to the transaction.
    USDA continues to look for ways to minimize the burden associated 
with this rulemaking. Therefore, slaughter facilities that slaughter 
animals that are part of a National Animal Identification System (NAIS) 
compliant system or other recognized official identification system 
(e.g., Canadian official system, Mexico official system) may also rely 
on the presence of an official ear tag and/or the presence of any 
accompanying animal markings (i.e., ``Can'', ``M''), as applicable, on 
which to base their origin claims. This would also include such

[[Page 45114]]

animals officially identified as a group lot.
    For an imported covered commodity, the importer of record as 
determined by CBP, must ensure that records: Provide clear product 
tracking from the United States port of entry to the immediate 
subsequent recipient and accurately reflect the country(ies) of origin 
of the item as identified in relevant CBP entry documents and 
information systems; and maintain such records for a period of 1 year 
from the date of the transaction.
    Under this interim final rule, retailers also have recordkeeping 
responsibilities. Records and other documentary evidence relied upon at 
the point of sale by the retailer to establish a covered commodity's 
country(ies) of origin must be maintained for one year from the date 
the origin declaration is made at retail. Upon request, these records 
must be provided to any duly authorized representatives of USDA within 
5 business days of the request and may be maintained in any location. 
For pre-labeled products (i.e., labeled by the manufacturer/first 
handler) the label itself is sufficient evidence on which the retailer 
may rely to establish the product's origin. Pre-labeled products are 
those covered commodities that are labeled for country of origin by the 
firm or entity responsible for making the initial claim or by a further 
processor or repacker (i.e., firms that receive bulk products and 
package the products as covered commodities in a form suitable for the 
retailer). The country of origin information of pre-labeled covered 
commodities must be legibly printed on the shipping container, 
immediate container, or consumer ready package. In addition to 
indicating country of origin information, pre-labeled products must 
contain sufficient supplier information to allow USDA to trace-back the 
product to the supplier initiating the claim. Records that identify the 
covered commodity, the supplier, and for products that are not pre-
labeled, the country of origin information must be maintained for a 
period of 1 year from the date the origin declaration is made at 
retail.
Enforcement
    The law encourages the Secretary to enter into partnerships with 
States to the extent practicable to assist in the administration of 
this program. As such, USDA has entered into partnerships with States 
that have enforcement infrastructure to conduct retail compliance 
reviews.
    Routine compliance reviews may be conducted at retail 
establishments and associated administrative offices, and at supplier 
establishments subject to these regulations. USDA will coordinate the 
scheduling and determine the procedures for compliance reviews. Only 
USDA will be able to initiate enforcement actions against a person 
found to be in violation of the law. USDA may also conduct 
investigations of complaints made by any person alleging violations of 
these regulations when the Secretary determines that reasonable grounds 
for such investigation exist.
    Retailers and suppliers, upon being notified of the commencement of 
a compliance review, must make all records or other documentary 
evidence material to this review available to USDA representatives 
within 5 business days of receiving a request and provide any necessary 
facilities for such inspections.
    The law contains enforcement provisions for both retailers and 
suppliers that include civil penalties of up to $1,000 for each 
violation. For retailers and persons engaged in the business of 
supplying a covered commodity to a retailer (suppliers), the law states 
that if the Secretary determines that a retailer or supplier is in 
violation of the Act, the Secretary must notify the retailer or 
supplier of the determination and provide the retailer or supplier with 
a 30-day period during which the retailer or supplier may take 
necessary steps to comply. If upon completion of the 30-day period the 
Secretary determines the retailer or supplier has (1) not made a good 
faith effort to comply and (2) continues to willfully violate the Act, 
after providing notice and an opportunity for a hearing, the retailer 
or supplier may be fined not more than $1,000 for each violation.
    In addition to the enforcement provisions contained in the Act, 
statements regarding a product's origin must also comply with other 
existing Federal statutes. For example, the Federal Food, Drug, and 
Cosmetic Act prohibits labeling that is false or misleading. In 
addition, for perishable agricultural commodities, mislabeling country 
of origin is also in violation of PACA misbranding provisions. Thus, 
inaccurate country of origin labeling of covered commodities may lead 
to additional penalties under these statutes as well.
    With regard to the voluntary use of NAIS compliant tags on which to 
base origin claims, 9 CFR 71.22 prohibits the removal of official 
identification devices except at the time of slaughter.
Comments and Responses
    On October 30, 2003, AMS published the proposed rule for the 
mandatory COOL program (68 FR 61944) with a 60-day comment period. On 
December 22, 2003, AMS published a notice extending the comment period 
(68 FR 7103