[Federal Register Volume 67, Number 198 (Friday, October 11, 2002)]
[Notices]
[Pages 63367-63375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-25734]
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Notices
Federal Register
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This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
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Federal Register / Vol. 67, No. 198 / Friday, October 11, 2002 /
Notices
[[Page 63367]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
[Docket Number LS-02-13]
Establishment of Guidelines for the Interim Voluntary Country of
Origin Labeling of Beef, Lamb, Pork, Fish, Perishable Agricultural
Commodities, and Peanuts Under the Authority of the Agricultural
Marketing Act of 1946
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Notice.
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SUMMARY: The Farm Security and Rural Investment Act of 2002 (Pub. L.
107-171) amended the Agricultural Marketing Act of 1946 to require the
Department of Agriculture's Agricultural Marketing Service (AMS) to
issue country of origin labeling guidelines for voluntary use by
retailers who wish to notify their customers of the country of origin
of beef (including veal), lamb, pork, fish, perishable agricultural
commodities, and peanuts. The guidelines contained within this notice
include definitions that can be used by retailers and their suppliers
and understood by other market participants, to facilitate the
voluntary labeling or identification of commodities covered by this
program by their respective country of origin. These voluntary
guidelines also outline what the Agency believes represents the
framework of a consumer notification, product marking, and
recordkeeping program that would be required to carry out this program.
AMS is committed to providing the industry and consumers with a
workable voluntary program that will carry out the intent of the law.
Public Law 107-171 also requires the Secretary to promulgate a
regulation for mandatory labeling by September 30, 2004. Development of
this mandatory regulation will begin in April 2003 and will likely be
based on these voluntary guidelines from the current interim period as
well as related input the Agency receives. AMS encourages submissions
on the utility of these voluntary guidelines during the next 180 days.
The forthcoming mandatory regulation will be developed through the
rulemaking process, which will include a proposal and an opportunity
for public comment. Although the benefits and costs of the voluntary
program are difficult to quantify, the Agency believes that retailers
will choose to participate if the benefits outweigh the costs. However,
as the Agency moves toward the development of the regulation that will
implement the mandatory program as required by Public Law 107-171,
information concerning the benefits and the estimated or actual costs
of implementing a program in compliance with the voluntary guidelines
will be of great benefit to the Agency.
DATES: These voluntary guidelines are effective October 11, 2002.
Submissions must be received by April 9, 2003.
ADDRESSES: Send written submissions to: Country of Origin Labeling
Program, Agricultural Marketing Service, USDA, Stop 0249, Room 2092-S,
1400 Independence Avenue, SW, Washington, D.C. 20250-0249, or by fax to
(202) 720-3499, or by e-mail to [email protected].
FOR FURTHER INFORMATION CONTACT: Eric Forman, Associate Deputy
Administrator, Fruit and Vegetable Programs, AMS, USDA, by phone at:
(202) 690-0262, or via e-mail at: [email protected]; or William
Sessions, Associate Deputy Administrator, Livestock and Seed Program,
AMS, USDA, by phone at: (202) 720-5705, or via e-mail at:
[email protected]. Additional information may also be obtained
over the Agency's website at: www.ams.usda.gov/cool/.
SUPPLEMENTARY INFORMATION:
Background
Section 10816 of Public Law 107-171 (7 U.S.C. 1638-1638d) amends
the Agricultural Marketing Act of 1946 (AMA) (7 U.S.C. 1621 et seq.) to
require retailers to inform consumers of the country of origin for
covered commodities. The term ``covered commodity'' is defined in the
law as muscle cuts of beef (including veal), lamb, and pork; ground
beef, ground lamb, and ground pork; farm-raised fish and shellfish;
wild fish and shellfish; perishable agricultural commodities (fresh and
frozen fruits and vegetables); and peanuts. The terms ``retailers'' and
``perishable agricultural commodities'' are defined in the law as in
the Perishable Agricultural Commodities Act of 1930 (PACA) (7 U.S.C.
499a(b)).
Interest has been expressed in expanding these covered commodities
to include other commodities, such as pecans. The Department of
Agriculture (USDA), however, does not have the authority to include
commodities in this program other than those specified in the statute.
For agricultural commodities that cannot be covered under these
guidelines, the Department has different authority to develop voluntary
user-fee programs to certify that a non-covered commodity is a product
of the United States. Under such a program, a participating handler or
processor could label its product as a USDA certified product of the
United States. Any person interested in such a program should contact
the Agricultural Marketing Service (AMS).
In the case of beef, lamb, and pork products, the law states that a
retailer may use a ``United States Country of Origin'' label only if
the product is from an animal that was exclusively born, raised, and
slaughtered in the United States. However, in the case of beef, this
definition also includes cattle exclusively born and raised in Alaska
or Hawaii and transported for a period not to exceed 60 days through
Canada to the United States and slaughtered in the United States. In
the case of farm-raised fish and shellfish, the product must be fish or
shellfish hatched, raised, harvested, and processed in the United
States. For wild fish and shellfish, it must either be harvested in the
waters of the United States or by a U.S. flagged vessel and processed
in the United States or aboard a U.S. flagged vessel. In addition, the
label must distinguish between farm-raised and wild fish products. In
the case of peanuts and perishable agricultural commodities, they must
be exclusively produced in the United States to carry that label.
To convey country of origin information to consumers, 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
[[Page 63368]]
final point of consumption. Food-service establishments--such as
restaurants, bars, food stands, and similar facilities--are exempt.
The law makes reference to the definition of ``retailer'' in the
PACA as the meaning of ``retailer'' for the application of country of
origin labeling requirements. Under the PACA, a ``retailer'' is any
person who buys or sells perishable agricultural products solely for
sale at retail with a cumulative invoice value in any calendar year of
more than $230,000. This definition excludes butcher shops, fish
markets, and small grocery stores that either purchase fruit and
vegetables at a level below this dollar volume threshold or do not
purchase fruit and vegetables at all.
The law directs the Secretary to first issue guidelines for
voluntary labeling and then, by September 30, 2004, to promulgate
requirements for mandatory labeling. When the mandatory labeling
program takes effect, the law states that the Secretary may require any
person who prepares, stores, handles, or distributes a covered
commodity for retail sale to maintain a verifiable recordkeeping audit
trail. According to the law, under the mandatory labeling program,
suppliers are required to provide information to retailers indicating
the country of origin of the covered commodity. Although the law states
that the Secretary shall not use a mandatory identification system to
verify country of origin under the mandatory labeling program, it does
state that the Secretary may use, as a model, identity verification
programs already in place. The law also provides enforcement procedures
for the mandatory labeling program that includes fines, civil
penalties, and cease and desist orders for retailers, packers, or other
persons for willful violations.
Key Components of the Law
These voluntary guidelines describe a program that allows
retailers, as defined by the law, to label covered commodities by their
country of origin. It is important to note that industry is not
required to participate in this voluntary labeling program that will be
in effect until a mandatory program is implemented. However, for those
retailers and other market participants who choose to adopt these
voluntary guidelines, all of the requirements contained within must be
followed. It also is important to note that retailers and other market
participants can place country of origin information on labels
independent of these voluntary guidelines, provided that current
labeling laws are followed.
Defining a Covered Commodity
Covered commodities are muscle cuts of beef, lamb, and pork; ground
beef, ground lamb, and ground pork; farm-raised fish; wild fish;
perishable agricultural commodities; and peanuts.
Ingredient in a Processed Food Item
The law excludes food items from country of origin labeling when a
covered commodity is an ``ingredient in a processed food item.''
However, Public Law 107-171 does not define a ``processed food item.''
Therefore, the Agency must define what constitutes a ``processed food
item'' for each covered commodity in the context of Public Law 107-171
for the purposes of these guidelines.
In developing the definition of ``processed food item'', the Agency
considered using existing definitions of processing. For example, the
National Organic Program defines processing as: cooking, baking,
curing, heating, drying, mixing, grinding, churning, separating,
extracting, slaughtering, cutting, fermenting, distilling,
eviscerating, preserving, dehydrating, freezing, chilling, or otherwise
manufacturing and includes the packaging, canning, jarring, or
otherwise enclosing food in a container. While this definition was
useful as a starting point, the Agency believes that such a definition
would exempt commodities that Congress clearly intended to be subject
to these guidelines. For example, with the coverage of muscle products
of beef, lamb, and pork, Congress clearly intended that the
slaughtering, cutting, and chilling of these commodities would not
exempt them from the guidelines.
The Agency considered defining this exemption to exclude any
``ingredient'' listed on an ingredient label. Such an interpretation,
however, would exclude many products that Congress intended to be
covered by this statute. For example, if such an interpretation would
be adopted, an item such as bagged lettuce, which lists only lettuce on
the ingredients statement, could be excluded. The Agency believes that
the mere listing of an otherwise covered commodity in an ingredient
statement or list on a packaged covered commodity does not meet the
threshold set forth in the law.
To determine when a covered commodity is an ingredient in a
processed food item and excluded from these guidelines, the Agency has
chosen to define a ``processed food item'' in two ways. First, a
processed food item is defined as a combination of ingredients that
result in a product with an identity that is different from that of the
covered commodity. Such items include raw salmon when combined with
other ingredients to produce sushi and peanuts when combined with other
ingredients to produce a candy bar. However, blended and mixed covered
commodities, which will be discussed in more detail later in this
notice, where the covered commodities retain their identity are still
covered by these guidelines. Such items include mixed vegetables such
as peas and carrots.
Second, a commodity that is materially changed to the point that
its character is substantially different from that of the covered
commodity is also deemed to be a processed food item. This includes,
but is not limited to, changes that occur as a result of cooking,
curing, or restructuring. However, covered commodities that retain
their identity when combined with other ingredients, such as water
enhanced case ready steaks, are not considered to be ``processed food
items'' under these guidelines. To the extent that this applies to
specific covered commodities, further guidance is provided under the
particular section for each category of covered commodity.
Whole Muscle Beef, Lamb, and Pork
All raw fresh and frozen whole muscle beef, lamb, and pork products
are covered under these guidelines unless they are an ingredient in a
processed food item or have been materially changed before retail
marketing.
Where there are added ingredients, so long as the character of the
whole muscle beef, lamb or pork is retained, the resulting products are
covered. This includes such products as needle-tenderized steaks;
seasoned, vacuum packaged pork loins; and water enhanced case ready
steaks, chops and roasts. These items would be covered because
combination of the ingredients and the whole muscle beef, lamb, or pork
in does not result in a product with an identity that is different from
that of the covered commodity.
In situations where the whole muscle beef, lamb, and pork is an
ingredient in a processed food item and the identity of the processed
food item is significantly different from that of the covered
commodity, the processed food item is excluded from country of origin
labeling. For example, items such as ready-to-cook Beef Wellington
would be exempt because the combination of ingredients with the covered
commodity (muscle cut of beef) creates a product with an identity
different from the covered commodity.
[[Page 63369]]
When items are materially changed to the point that they do not
retain their raw, whole muscle character they would also be excluded
from country of origin labeling. This includes such products as
restructured steaks and lamb pita meats, which contain pieces of whole
muscle beef, pork or lamb that are formed back together. The cooking
and curing of products (e.g., the addition of nitrites) also excludes
products from labeling. Examples of these products include corned beef
briskets and bacon. This is because cooked and cured products,
including raw whole muscle cured products, are functionally different
products and are not typically marketed with fresh and frozen whole
muscle meats at a retail establishment, but instead they are marketed
with other excluded meat products.
Ground Beef, Lamb, and Pork
Public Law 107-171 specifically covers ``ground beef, ground lamb,
and ground pork.'' The FSIS Food Standards and Labeling Policy Book
(1998) defines products labeled as ground meats as not containing added
water, cereal, soy derivatives, or other extenders. The Policy Book
also specifically defines ground beef as not being able to have any
salt, sweetening agents, flavorings, spices, or other seasonings added.
Using the FSIS standards for ground meat and ground beef as a
guide, the Agency does not believe that any added ingredient items or
further processed products produced from ground beef, ground lamb, or
ground pork are covered.
Fresh and Frozen Fruits and Vegetables
The Perishable Agricultural Commodities Act defines perishable
agricultural commodities as ``any of the following, whether or not
frozen or packed in ice: Fresh fruits and vegetables of every kind and
character; and * * * includes cherries in brine as defined by the
Secretary in accordance with trade usages''. Therefore, frozen fruits
and vegetables (e.g., a package of frozen strawberries, or frozen
French fried potatoes made from sliced potatoes) are covered
commodities and fall under these country of origin labeling guidelines.
To maintain consistency with PACA, a frozen fruit or vegetable will
be a covered commodity so long as its ``kind or character'' has not
been altered. Therefore, for all perishable agricultural commodities,
an ``ingredient in a processed food item'' is defined to mean an
otherwise covered commodity that is a constituent in a food item where
the identity of the food item is different from that of the covered
commodity (e.g., a frozen prepared pie that includes frozen sliced
apples) or is included in a package with significant other foods (e.g.,
a frozen entree consisting of a pre-cooked meat item and frozen
vegetables). Alternatively, when a perishable agricultural commodity is
processed (i.e., frozen so as to remain subject to the PACA) and
packaged with only preservatives, seasoning, sweeteners or other minor
ingredients, the covered commodity would fall under these voluntary
country of origin labeling guidelines.
Peanuts
Because the vast majority of peanuts sold at retail are shelled,
roasted, and salted, the Agency believes these products were intended
to be covered by the law. Accordingly, shelling, roasting, salting, and
flavoring of peanuts would not exclude these products from being
subject to Public Law 107-171. However, further processed peanut
products, including such items as candy coated peanuts, peanut brittle,
and peanut butter would not be covered by country of origin labeling
guidelines. Similarly, where the peanuts are ingredients in other food
products, such as peanuts in a candy bar, they would be excluded.
Wild and Farm-Raised Fish and Shellfish
All fresh and frozen fish and shellfish items are covered by these
country of origin labeling guidelines. All cooked and canned fish
products, including such items as canned tuna and canned sardines, and
restructured fish products, such as fish sticks and surimi, are
excluded. Similarly, processed products where the fish or shellfish is
an ingredient, such items as sushi, crab salad, and clam chowder, are
excluded.
Labeling Country of Origin for Products Produced Exclusively in the
United States
If following these guidelines, a retailer shall label a covered
commodity as having a ``United States Country of Origin'' only if the
following criteria are met:
1. Beef: Covered commodities must be derived exclusively from
animals born, raised, and slaughtered in the United States (including
animals that were born and raised in Alaska or Hawaii and transported
for a period not to exceed 60 days through Canada to the United States
and slaughtered in the United States).
2. Lamb and Pork: Covered commodities must be derived exclusively
from animals born, raised, and slaughtered in the United States.
3. Farm-raised Fish and Shellfish: Covered commodities must be
derived exclusively from fish or shellfish hatched, harvested, and
processed in the United States.
4. Wild Fish and Shellfish: Covered commodities must be derived
exclusively from fish or shellfish either harvested in the waters of
the United States or by a U.S. flagged vessel and processed in the
United States or aboard a U.S. flagged vessel.
5. Fresh and Frozen Fruits and Vegetables, and Peanuts: Covered
commodities must be derived exclusively from produce or peanuts grown,
packed and, if applicable, processed in the United States.
Product otherwise meeting the requirements of ``United States
Country of Origin'' may retain that designation after export for
further processing in a foreign country and reentry into the United
States for retail sale so long as a verifiable recordkeeping audit
trail is maintained and such labeling is consistent with other Federal
labeling requirements.
Labeling Country of Origin for Imported Products (i.e., Produced
Entirely Outside of the United States)
Currently, Federal law--the Tariff Act of 1930 as amended (19
U.S.C. 1304), the Federal Meat Inspection Act, the Poultry Products
Inspection Act as amended (21 U.S.C. 451 et seq.), and other
legislation requires most imports, including food items, to bear labels
informing the ``ultimate purchaser'' of their country of origin.
Ultimate purchaser has been defined as the last U.S. person who will
receive the article in the form in which it was imported. Containers
(e.g., cartons and boxes) holding imported fresh fruits and vegetables,
for example, must be labeled with country of origin information when
entering the United States. (Note: The PACA requires all labels on
subject commodities to be accurate, but requires no specific labeling
information.) Consumer-ready packages, including food products (e.g., a
vacuum packaged imported lamb leg, a bundle of asparagus, or a package
of frozen strawberries), although they are packed in a box, currently
must have country of origin labels on each consumer-ready package. In
contrast, a retailer may take loose produce out of a container and
display it in an open bin, selling each individual piece of produce
that has not been labeled. A placard or other label indicating country
of origin is not currently required. If the article is destined for a
U.S. processor or manufacturer where it will undergo ``substantial
transformation,'' that
[[Page 63370]]
processor or manufacturer is considered the ultimate purchaser. As a
result, meat and other items have not been required to carry a country
of origin mark after cutting or processing in the United States and may
presently be labeled product of the United States.
Under these guidelines, the country of origin for products produced
entirely outside of the United States shall be the country as specified
by the requirements of existing Federal laws at the time the product
arrives at the U.S. port of entry. For example, an imported lamb
carcass may have actually resulted from an animal slaughtered in the
exporting country but born in a country other than the exporting
country. However, for the purposes of these labeling guidelines, the
imported lamb carcass may be labeled as the product of the exporting
country.
Using this country of origin information for imported products,
retailers (and their suppliers) will have to maintain the country of
origin identity of this class of products to the final point of sale of
a covered commodity. So, for the imported lamb carcass example above,
under these guidelines if the carcass is fabricated into cuts in the
United States, a resulting lamb loin marketed at retail would be marked
as product of the exporting nation as it is not eligible for a United
States origin claim.
Labeling Country of Origin When the Product Has Entered the United
States During the Production Process (i.e., Mixed Origin That Includes
the United States)
The law explicitly defines the requirements for covered commodities
to be labeled with a ``United States Country of Origin.'' However, the
law is considerably less prescriptive for products produced completely
or in part outside of the United States. In these cases, the law only
requires that retailers inform consumers at the point of sale of a
covered commodity of the country of origin.
A number of animals born in foreign countries are raised and
slaughtered in the United States. Also, some animals born in the U.S.
are raised in foreign countries and then may be slaughtered in either
that foreign country or returned to the United States for slaughter. As
all three criteria (i.e., born, raised, slaughtered for beef, lamb, and
pork) are needed for product to be considered ``United States Country
of Origin,'' the Agency has to define how the products from mixed
origin animals should most appropriately be labeled. Similarly, the law
states that peanuts and perishable agricultural commodities must be
``produced'' in the United States to be labeled ``United States Country
of Origin.'' Since many such products may be grown, packed, or
processed in different countries, the Agency must determine how they
should be labeled.
The Agency recognizes that the definition provided in the law does
not allow products that were produced in both the United States and in
a foreign country to be called ``United States Country of Origin'' or
even ``Product of the United States and Country X.'' However, the
Agency also recognizes that products such as pork products derived from
a pig that was born in a foreign country (e.g., Country X), raised, and
slaughtered in the United States cannot be labeled as ``Product of
Country X'' as much of the production of that animal was in the United
States. Accordingly, these guidelines provide a system where such
products that were produced in both foreign markets and in the United
States would be labeled to identify what production processes occurred
in a foreign market and what production processes occurred in the
United States, up to the point that the country of origin definition
was determined. For the pork example above, the product label could
either read, ``From Country X hogs Raised and Slaughtered in the United
States,'' or alternatively, ``Born in Country X, Raised and Slaughtered
in the United States.'' A different example would be vegetables grown
in the United States, frozen (processed) in a foreign country, and
imported back into the United States for retail sale. This product
could be labeled as, ``Grown in the United States, Processed in Country
X.''
The Agency is aware that in some cases, a covered commodity will
undergo production processes in two or more foreign countries prior to
entering the United States for additional processing or a final process
such as slaughter. In these cases, verifiable product information will
not always be available for all points in the production process (i.e.,
born, raised, or grown and packed) prior to the port of entry. In these
cases, the product label will designate the country of origin as
specified by existing Federal laws (e.g., requirements of the U.S.
Customs Service) at the time the product arrives at the U.S. port of
entry and any additional major processes (e.g., slaughter for beef or
processing for peanuts) performed in the United States be listed on the
product label. For example, if a calf was born in Country X and raised
in Country Y before being imported for slaughter in the United States,
an acceptable product label under these guidelines for the covered
commodities derived from this animal would be: ``From Cattle Imported
from Country Y, Slaughtered in the United States.'' However,
alternatively, if all of the production process information is known
for the product that occurred in both Country X and Country Y, it may
be included on the product label. So, for the previous example, a label
of, ``Born in Country X, Raised in Country Y, and Slaughtered in the
United States'' would be acceptable under these guidelines if a
verifiable recordkeeping trail was available, but it would not be
required since two or more countries (prior to the product entering the
United States) are involved.
The Agency believes this level of detail is required under the
statute and will be consistent with the law's purpose of providing
meaningful information to consumers. However, the Agency does have
concerns that requiring meat products to carry labels that refer to the
slaughtering of livestock could be viewed negatively by consumers. As a
result, the Agency will allow the term ``Processed'' to be used in lieu
of the term ``Slaughtered'' on meat products.
Defining Country of Origin for Blended or Mixed Products
The law requires the Agency to formulate guidelines for country of
origin labeling for ground beef (and to a lesser extent ground lamb and
pork), mixed fruit and vegetables, and blended seafood products that
are covered commodities. For the purposes of these labeling provisions,
blended or mixed products are those that contain one or more covered
commodities from one or more countries. The Agency recognizes that
these items are often a mixture of raw materials that are derived from
covered commodities produced both in the United States and in countries
outside of the United States. Each of the raw material sources for
mixed or blended items would have a country of origin as defined by
these guidelines.
In addition, the Agency recognizes that it could be misleading to
consumers if only a small percentage of a mixture of a covered
commodity met the definition of United States origin and yet the
mixture could list the United States first ahead of other countries in
a country of origin declaration on the package. Therefore, under these
guidelines the applicable country of origin labeling for each raw
material source (as defined in the guidelines) must be reflected in the
labeling of the mixed or blended retail item by order of prominence by
weight. This being the case, ground beef would be labeled with
[[Page 63371]]
the applicable country of origin information as required by the
guidelines for each raw material source in descending order of
prominence by weight.
For example, the label ``From Country X Cattle Slaughtered in the
United States; Product of Country Y; and United States Product'' could
be the label on a package of ground beef for a mixture of three beef
raw material sources where the most substantial raw material source was
from cattle born and raised in Country X and slaughtered in the United
States, followed by imported Country Y beef trimmings, and then
followed by trimmings from beef completely of United States origin.
Likewise, the labeling for a bag of shrimp tails containing shrimp that
were sourced from multiple countries must, under these guidelines,
specify the country of origin of each of the sources of the shrimp in
order of their prominence by weight for those shrimp tails in the bag.
It is important to note that these guidelines do not require the label
to list the actual percentage of weight for each constituent ingredient
(e.g., 50 percent United States, 40 percent Country X, 10 percent
Country Y).
In the case of mixed or blended products where the individual
constituents can be separately identified, the guidelines would require
the container to be labeled to individually identify the country of
origin of each constituent. An example of a mixed or blended product
where the individual constituents can be separately identified is a
bagged salad. For a bagged salad that contains lettuce, spinach, and
peppers from three different countries, the package label would list
the applicable country of origin separately for each constituent
ingredient.
Method of Notification
The law states that country of origin notification may be provided
to consumers by means of 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. However, it is important to note that this
requirement does not supercede any existing labeling requirements and
any such country of origin notification must not obscure other labeling
information required by existing regulatory requirements.
The guidelines allow market participants to utilize a variety of
different labeling nomenclatures to denote the country of origin of a
covered commodity. For example, ``U.K.'' and ``United Kingdom of Great
Britain and Northern Ireland'' are both allowed under the guidelines.
Similarly, covered commodities meeting the guidelines for a ``United
States Country of Origin'' may be labeled by any commonly understood
designations such as:
1. Country of Origin--United States;
2. Product of the United States;
3. Produced in the United States; or
4. Product of USA.
The Agency kept this portion of the guidelines non-prescriptive to
provide the industry with the most flexibility in implementing the
program in the least costly manner possible.
State and Regional Labeling Programs
Under this voluntary program, the law states that retailers notify
consumers of the country of origin of covered commodities. The Agency
has determined that State and regional labeling programs, such as
``Washington Apples,'' ``Idaho Potatoes,'' and ``California Grown'' do
not meet this requirement. Therefore, such State and regional labeling
claims cannot be accepted in lieu of country of origin labeling.
Remotely Purchased Products
For sales of a covered commodity where 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, as defined by these guidelines, shall provide the country of
origin information on the sales vehicle (i.e., Internet site, home
delivery catalog, etc.) as part of the information describing the
covered commodity being offered for sale. This is because of the
Agency's belief that consumers must be made aware of the country of
origin of the covered commodity before the purchase is made.
Verification and Enforcement of Country of Origin Labeling Claims Under
the Voluntary Program
A distinction was made by Congress when constructing the
legislation authorizing this program between the voluntary labeling
program and the mandatory labeling program. During the voluntary
labeling timeframe covered by these guidelines, the Agency will not
perform compliance visits pursuant to Public Law 107-171 and has no
authority under the law to pursue enforcement action against entities
participating in this voluntary program. However, it is important to
note that when retailers and their suppliers choose to adopt the
guidelines that all of the provisions contained within must be
followed. Any reference by retailers and their suppliers to the use of
these guidelines when certain provisions are not being met could be
considered a labeling claim that is not truthful and therefore may be a
violation of the PACA and other applicable labeling laws and subject to
enforcement under these laws.
The law contains several provisions for the verification of country
of origin claims. The law states that, ``The Secretary may require that
any person that * * * distributes a covered commodity for retail sale
maintain a verifiable record keeping audit trail * * * to verify
compliance * * *'' However, the law also sets forth that, ``The
Secretary shall not use a mandatory identification system to verify the
country of origin of a covered commodity.'' To have a meaningful
program, retailers and their down-line suppliers will have to maintain
a verifiable audit trail on covered commodities to substantiate country
of origin labeling claims. The law states that, ``To certify the
country of origin of a covered commodity, the Secretary may use as a
model certification programs in existence on the date of enactment of
this Act.'' The Agency encourages all retailers who voluntarily choose
to adopt these guidelines to contact the Agency to gain a better
understanding of the various verification programs operated by the
Agency that are already in place in certain market segments that would
meet the requirements of this program.
Verification and Enforcement of Country of Origin Labeling Claims Under
the Mandatory Program
Enforcement of the country of origin labeling provisions of Public
Law 107-171 relative to the frequency and extent of surveillance
activities, complaint response, retailer and violation tracking, and
public disclosure of information obtained by the Agency are all areas
that will be addressed in the mandatory program. Accordingly, the
Agency will not perform surveillance activities, investigate
complaints, prosecute violations, or otherwise enforce the voluntary
guidelines (except as might normally occur under other program
authorities). However, as a preparatory measure, retailers and others
may request that the Agency perform advisory audits on a user-fee basis
to receive feedback on their application of the voluntary system.
Retention of Records
These guidelines require a two-year records retention policy. This
timeframe was chosen because it is consistent with
[[Page 63372]]
the current records retention requirements of the PACA, which govern
these same retailers.
Economic Implications
Though the benefits and costs of the voluntary program are
difficult to quantify, the Agency believes that retailers will only
choose to participate if the benefits outweigh the costs. As the Agency
moves toward the development of a regulation to implement the mandatory
program as required by Public Law 107-171, information concerning the
benefits and the estimated or actual costs of implementing a program in
compliance with the voluntary guidelines will be of great benefit to
the Agency. The Agency is aware that studies have been conducted by
USDA's Food Safety and Inspection Service (FSIS) and the United States
General Accounting Office regarding implications of country of origin
labeling and will use this information accordingly.
Labeling of Covered Commodities Marketed to Others Besides Retailers
It is important to note that these guidelines do not apply to
covered commodities marketed to others besides retailers, as defined in
the law. This includes covered commodities sold to such businesses as
food service establishments, butcher shops, and foreign outlets. So,
for example, boxed whole muscle beef cuts sold to an importer in Japan
would be labeled as they currently are labeled under existing
regulations.
Paperwork Reduction Act of 1995
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the Agency has requested emergency approval from the
Office of Management and Budget for the information collection burden
imposed by this program.
The Guidelines
These guidelines include definitions that can be used by retailers
and their suppliers and understood by other market participants, to
facilitate the labeling or identification of commodities covered by
this program by their respective country of origin. These guidelines
also outline what the Agency believes represents the framework of a
consumer notification, product marking, and recordkeeping program that
would be required to carry out this program.
Voluntary Country of Origin Labeling Guidelines
Definitions
Unless otherwise defined, the following terms should be construed
as follows:
``Act'' means the Agricultural Marketing Act of 1946, (7 U.S.C.
1621 et seq.).
``Agency'' means the Agricultural Marketing Service, United States
Department of Agriculture.
``Beef'' means meat produced from cattle, including veal.
``Consumer package'' means any container or wrapping in which any
covered commodity is enclosed for use in the delivery or display of
such commodity to retail purchasers.
``Covered commodity'' means fresh or frozen muscle cuts of beef
(including veal), lamb, and pork, ground beef, lamb, and pork, as well
as farm-raised fish, wild fish, and shellfish (including steaks,
nuggets, any other flesh from farmed raised fish and shellfish),
perishable agricultural commodities as defined in the Perishable
Agricultural Commodities Act of 1930 (7 U.S.C. 499a(b)), and peanuts.
Covered commodities are excluded from these guidelines if the commodity
is an ingredient in a processed food item.
``Department'' means the United States Department of Agriculture.
``Farm-raised fish'' means net-pen aquaculture or other farm-raised
fish or shellfish; and fillets, steaks, nuggets, and any other flesh
from a farm-raised fish or shellfish.
``Food service establishment'' means a restaurant, cafeteria,
lunchroom, food stand, saloon, tavern, bar, lounge, or other similar
facility operated as an enterprise engaged in the business of selling
food to the public. Food service establishments include salad bars,
delicatessens, and other prepared food enterprises that provide ready-
to-eat foods that are consumed either on or outside of the retailer's
premises.
``Ground beef'' means ground beef of skeletal origin produced in
conformance with all applicable Food Safety and Inspection Service
labeling guidelines. This product contains no added ingredients.
``Ground lamb'' means ground lamb of skeletal origin produced in
conformance with all applicable Food Safety and Inspection Service
labeling guidelines. This product contains no added ingredients.
``Ground pork'' means ground pork of skeletal origin produced in
conformance with all applicable Food Safety and Inspection Service
labeling guidelines. This product contains no added ingredients.
``Ingredient'' means the component, either in part or in full, of a
finished food product.
``Lamb'' means meat, other than mutton, produced from sheep.
``Legibly'' means English language text that can be easily read.
``Material change'' means altered prior to retail to the extent
that the product does not meet the definition of covered commodity. To
be considered ``materially changed,'' changes to a commodity must be of
such magnitude that its character is substantially different from that
of the covered commodity. Specifically, for the following:
1. Whole muscle beef, lamb, and pork: Altered to the point that its
character is no longer that of the covered commodity; such as through
restructuring, cooking, and curing. Examples include ham, raw corned
beef brisket, and restructured beef steaks.
2. Ground beef, lamb, and pork: The addition of any ingredients or
cooking. Examples include ground beef with vegetable protein, cooked
ground beef crumbles, bratwurst, fresh pork sausage, and lamb sausage.
3. Fresh and frozen fruits and vegetables: Altered to the point
that its character is no longer that of the covered commodity. Examples
include orange and other fruit juices.
4. Peanuts: Altered to the point that its character is no longer
that of the covered commodity. An example is peanut butter.
5. Wild fish and farm-raised fish: Altered to the point that its
character is no longer that of the covered commodity. Includes the
cooking and canning of fish and shellfish. Examples include canned tuna
and canned sardines as well as surimi and restructured fish sticks.
``Perishable agricultural commodity'' means fresh and frozen fruits
and vegetables of every kind and character where the original character
has not been changed (for example, frozen green beans would be
included, but frozen concentrated orange juice would be excluded) and
includes cherries in brine as defined by the Secretary in accordance
with trade usages.
``Person'' means any individual, partnership, corporation,
association, or other legal entity.
`` Pork'' means meat produced from hogs.
``Processed food item'' means either:
1. A combination of ingredients that may include a covered
commodity but the identity of the processed food item
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is different from that of the covered commodity; or
2. A covered commodity that has undergone a material change.
``Produced in any country other than the United States'' means
born, raised, slaughtered, grown, packed, processed, or harvested (as
applicable to the covered commodity), outside the fifty U.S states, the
District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin
Islands, the Trust Territories of the Pacific Islands, and the waters
of the United States (as defined in these guidelines), or by a vessel
not registered in the United States.
``Raised'' means, in the case of beef, lamb, and pork, the period
of time following weaning until slaughter.
``Retailer'' has the meaning given the term in section 1(b) of the
Perishable Agricultural Commodities Act of 1930 (7 U.S.C. 499a(b)),
i.e., a person who is a dealer engaged in the business of selling any
perishable agricultural commodity solely at retail with an invoice
value in any calendar year of more than $230,000.
``Secretary'' means the Secretary of Agriculture of the United
States or any person to whom the Secretary's authority has been
delegated.
``Slaughter'' means the point in which a livestock animal
(including cattle, swine, and sheep) is prepared into meat products fit
for human consumption. For labeling purposes, the term ``slaughtered''
is interchangeable with the term ``processed.''
``United States'' means the fifty U.S states, the District of
Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, the
Trust Territories of the Pacific Islands, and the waters of the United
States (as defined in these guidelines).
United States country of origin'' means in the case of:
1. Beef: From animals born, raised, and slaughtered in the United
States (including animals born and raised in Alaska and Hawaii and
transported for a period not to exceed 60 days through Canada to the
United States and slaughtered in the United States).
2. Lamb and pork: From animals born, raised, and slaughtered in the
United States.
3. Farm-raised fish: From fish hatched, raised, harvested, and
processed in the United States.
4. Wild-fish: From fish either harvested in the waters of the
United States or by a U.S. flagged vessel and processed in the United
States or aboard a U.S. flagged vessel.
5. Fresh and frozen fruits and vegetables, and peanuts: From
products produced in the United States.
``U.S. flagged vessel'' means a ship or boat registered in the
United States or documented under chapter 121 of title 46, United
States Code.
``Vessel flag'' means the country of registry for a vessel, ship,
or boat.
``Waters of the United States'' means those fresh and ocean waters
contained within the 200-mile boundary of the Exclusive Economic Zone
(EEZ) surrounding the United States.
``Wild fish'' means fish and shellfish, regardless of origin,
harvested in the wild; and fillets, steaks, nuggets, and any other
flesh from a wild fish or shellfish.
Country of Origin Notification
In voluntarily providing notice of the country of origin as covered
by this statute, the following guidelines shall be followed:
1. Consumer Notification
A. General
I. All covered commodities offered for sale individually, in bulk
bins, cartons, crates, barrels, clusters, or consumer packages shall be
legibly marked with the country of origin.
II. Country of origin labeling may be applied prior to or after
delivery to the United States.
B. Exemptions
I. Food service establishments are exempted from the country of
origin guidelines.
C. Exclusions
I. Covered commodities are excluded from country of origin labeling
if they are an ingredient in a processed food item. Examples include:
i. Whole muscle beef, lamb, and pork: Ready-to-cook Beef
Wellington.
ii. Ground beef, ground lamb, ground pork: A meal kit that includes
ground beef and other ingredients.
iii. Fresh and frozen fruit and vegetables: Frozen prepared pie
that includes frozen sliced apples.
iv. Peanuts: Peanuts in a candy bar.
v. Wild and farm-raised fish and shellfish: Salmon sushi.
D. Designation of Wild Fish and Farm-Raised Fish
I. The notice of country of origin for wild fish and farm-raised
fish shall specify and distinguish between wild fish and farm-raised
fish.
E. Labeling Covered Commodities of United States Country of Origin
I. They must fully meet the definition of United States Country of
Origin as put forth in the Definitions section of these guidelines.
II. Products further processed or handled in foreign countries
after reaching the threshold point in which the country of origin of
the covered commodity is determined may still qualify for ``United
States Country of Origin'' under these guidelines if the product's
identity is maintained under a verifiable recordkeeping system.
Otherwise, such products shall be labeled with the country from which
it was exported in conformance with existing Federal laws. An example
is a beef carcass meeting the definition of ``Product of United States
Origin'' exported to another country for cutting into steaks. The
resulting steaks from this carcass that are imported back into the
United States may either be marked as product of ``Country X'' or,
alternatively, if a verifiable recordkeeping system is in place,
``Product of United States Origin.''
F. Labeling Imported Products
I. Shall be labeled with the country from which it was exported in
conformance with existing Federal laws.
II. For covered commodities that undergo different phases of
preparation, production or processing in various countries prior to
export to the United States, the label may also include additional
country of origin information if the product's identity is maintained
under a verifiable recordkeeping system. This includes referencing
production processes which may have occurred in the United States prior
to export to a foreign country and ultimate import back into the United
States.
G. Labeling Covered Commodities From Multiple Countries That Include
the United States
I. Beef, Lamb, Pork:
i. If an animal was born or raised in a foreign country prior to
slaughter in the United States, the resulting meat products shall be
labeled to show the processing steps that occurred in a foreign country
prior to slaughter in the United States consistent with existing
Federal law at the time the animal entered the United States. For
example, if a calf is born and raised in a foreign country, and then
exported for further raising and slaughtering in the United States, the
label could either read, ``From Country X'' cattle Raised and
Slaughtered in the United States,'' or, alternatively, ``Born and
Raised in Country X and Raised and Slaughtered in the United States.''
ii. If the animal was born or raised in two or more foreign
countries prior to slaughter in the United States, the resulting meat
products shall be labeled as originating from animals from the
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country as determined under existing Federal law at the time they
entered the United States and for the process(es) occurring in the
United States. For example, a steer born in Country X, exported to
Country Y for raising, and then exported to the United States for
slaughter could have the label, ``From Country Y cattle Slaughtered in
the United States.'' However, such products may instead be labeled to
identify each specific country (e.g., ``Born in Country X, Raised in
Country Y, and Slaughtered in the United States'') if the animal's
identity was maintained under a verifiable recordkeeping system.
II. Fresh and Frozen Fruits and Vegetables, and Peanuts
i. In the case where a covered commodity was grown and packed in a
foreign country prior to processing in the United States, the product
shall be labeled with the foreign country where it was grown and/or
packed in accordance with existing Federal law at the time when the
product entered the United States. For example, the product label could
be applied as: ``Grown and packed in Country X and Processed in the
United States.''
ii. In the case where a covered commodity was grown and packed in
two or more foreign countries prior to processing in the United States,
the product shall be labeled with the foreign country it was grown and/
or packed in accordance with existing Federal law at the time when the
product entered the United States. For example, product may have been
grown in Country X, packed in Country Y, and processed in the United
States. When the product entered the United States, under existing
Federal law it would be identified as product of Country Y and could
carry the label ``Product of Country Y, Processed in the United
States.'' However, such products may instead be labeled to identify
each specific country and in applicable chronological order by country
if the product's identity was maintained under a verifiable
recordkeeping system.
III. Wild Fish and Farm-raised Fish: In the case where a covered
commodity was harvested in the waters of or by a flagged vessel of one
country and processed in another country or onboard a vessel with a
different flag, the product label shall be applied as: ``Harvested in
(Country X, as applicable) and Processed in (Country Y, as
applicable).''
H. Blended Products
I. For commingled, blended, or mixed covered commodities offered
for retail sale that are prepared from raw materials originating from
different countries (e.g., ground beef, salads, or fresh or frozen
mixed fruits or vegetables) the label shall indicate the country of
origin information of each constituent or component covered commodity
raw material source in accordance with these guidelines by order of
prominence by weight.
II. The product label shall be applied as: ``Produced from covered
commodities with the following countries of origin: (Raw material
source A, with born, raised, slaughtered, grown, packed, harvested, or
processed information as applicable to the commodity as defined by
these guidelines), (Raw material source B, with born, raised,
slaughtered, grown, packed, harvested, or processed as applicable to
the commodity as defined by these guidelines),'' and so forth until all
covered commodity raw material sources are accounted for by order of
prominence by weight.
III. Products made from commingled, blended, or mixed covered
commodities where processing has altered the commodity's character
(e.g., cooked vegetables in a soup), do not have to be labeled as to
the country of origin of the constituent items.
I. Remotely Purchased Products
I. For sales of a covered commodity where 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, as defined by these guidelines, shall provide the country of
origin information on the sales vehicle (i.e., Internet site, home
delivery catalog, etc.) as part of the information describing the
covered commodity being offered for sale.
2. Markings
A. Country of origin notification markings can either be in the
form of a placard, sign, label, sticker, or other format that allows
consumers to identify the country of origin of particular covered
items. The placard, sign, label, sticker or other display must be
placed in a conspicuous location. Country of origin information may be
typed, printed, or handwritten. Labels must be written in English;
additional accompanying languages are permissible. Country of origin
notification shall be written in a form that allows the consumer to
read them when selecting items to be purchased.
B. Abbreviations and variant spellings, which unmistakably indicate
the country such as: ``U.K.'' for ``The United Kingdom of Great Britain
and Northern Ireland'' and ``Brasil'' for ``Brazil'' are acceptable.
The adjectival form of the name of a country or region/city within a
country may not be used as proper indication of the country of origin
of imported commodities. For example, product names such as ``Spanish
peanuts'' which are most commonly used to designate a product variety
and not the actual origin of the product, would, without a further
designation of country of origin, be unacceptable even if the products
did actually originate from that country. Symbols (flags, national
symbols, etc.) may not be used to denote a country of origin, but may
be used in conjunction with an acceptable country of origin label.
C. State or regional labeling programs will not be accepted in lieu
of country of origin labeling.
D. The phrases ``Product of Country X,'' and/or ``Grown in Country
X,'' and/or ``Imported from Country X,'' can be used to denote the
country of origin for products produced entirely in any country other
than the United States.
3. Recordkeeping
A. Every person that prepares, stores, handles, or distributes a
covered commodity for retail sale must keep records on the country of
origin for a period of at least two years.
B. Any person engaged in the business of supplying a covered
commodity to a retailer must make available information to the retailer
indicating the country of origin of the covered commodity. Such
persons, which include but are not limited to, producers, growers,
handlers, packers, processors, and importers, must maintain auditable
records documenting the origin of covered commodities. Self-
certification by such persons is not sufficient.
C. Retailers must ensure that a verifiable audit trail is
maintained through contracts or other means, recognizing that suppliers
throughout the production/marketing chain have a responsibility to
maintain the necessary supporting records.
D. All records must be legible and written in English, and may be
maintained in either electronic or hard copy formats. To ensure
accurate labeling and provide an auditable document trail, retailers
must have records at the place of final sale that identify the country
of origin of all covered commodities sold at that facility. In
addition, records of any person who prepares, stores, handles, or
distributes a covered commodity and/or comprehensive records maintained
by the retailer may be located at points of distribution and sale,
warehouses, or at central offices. Wherever maintained
[[Page 63375]]
and in whatever format, these records must be readily accessible to
review by the retailer and the Department.
E. Records for domestically produced and/or processed products must
clearly identify the location of the growers and production facilities.
When similar covered commodities may be present from more than one
country or different production regimes, a verifiable segregation plan
must be in place. For imported commodities, records must provide clear
product tracking from the port of entry into the United States.
F. Recognizing retailers and their suppliers may have different
accounting and inventory documentary systems; various forms of
documentation will be acceptable provided the necessary tracking
information is available.
4. Enforcement
A. The Secretary will not perform surveillance of retailers,
investigate complaints, prosecute violations, or otherwise enforce the
provisions of the voluntary guidelines.
B. The voluntary guidelines will not interfere with or supercede
any other statutory requirement for country of origin labeling for the
covered commodities. (i.e., all other Federal and/or state labeling
requirements remain in force).
C. As a preparatory measure, retailers and any other person that
prepares, stores, handles, or distributes a covered commodity for
retail sale may request that the Agency perform advisory audits on a
user-fee basis to receive feedback on their application of the
voluntary system.
Authority: 7 U.S.C. 1621 et seq.
A.J. Yates,
Administrator.
[FR Doc. 02-25734 Filed 10-8-02; 3:00 pm]
BILLING CODE 3410-02-P