[Federal Register Volume 77, Number 19 (Monday, January 30, 2012)]
[Proposed Rules]
[Pages 4498-4501]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1862]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 77, No. 19 / Monday, January 30, 2012 / 
Proposed Rules

[[Page 4498]]


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FEDERAL TRADE COMMISSION

16 CFR Part 300


Rules and Regulations Under the Wool Products Labeling Act of 
1939

AGENCY: Federal Trade Commission.

ACTION: Advance notice of proposed rulemaking; request for public 
comment.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
systematically reviews all its rules and guides to ensure that they 
continue to achieve their intended purpose without unduly burdening 
commerce. As part of this systematic review, the Commission requests 
public comment on the overall costs, benefits, necessity, and 
regulatory and economic impact of, and possible modifications to, the 
Rules and Regulations under the Wool Products Labeling Act of 1939 
(``Wool Rules'' or ``Rules''). The Commission also seeks comment on how 
it should modify the Rules to implement the Wool Suit Fabric Labeling 
Fairness and International Standards Conforming Act, and on the costs 
and benefits of certain provisions of the Wool Products Labeling Act of 
1939.

DATES: Comments must be submitted by March 26, 2012.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Wool Rules, 16 CFR 
part 300, Project No. P124201'' on your comment, and file your comment 
online at https://ftcpublic.commentworks.com/ftc/woolanpr by following 
the instructions on the web-based form. If you prefer to file your 
comment on paper, mail or deliver your comment to the following 
address: Federal Trade Commission, Office of the Secretary, Room H-113 
(Annex Q), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Robert M. Frisby, Attorney, (202) 326-
2098, Division of Enforcement, Bureau of Consumer Protection, Federal 
Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Wool Products Labeling Act of 1939 (``Wool Act''), 15 U.S.C. 
68-68j, requires marketers to attach a label to each wool product 
disclosing: (1) The percentages by weight of the wool, recycled wool, 
and other fibers accounting for 5% or more of the product, and the 
aggregate of all other fibers; (2) the maximum percentage of the total 
weight of the wool product of any nonfibrous matter; (3) the name under 
which the manufacturer or other responsible company does business or, 
in lieu thereof, the registered identification number (``RN number'') 
of such company; and (4) the name of the country where the wool product 
was processed or manufactured.\1\ The Wool Act also contains 
advertising and record-keeping provisions.
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    \1\ 15 U.S.C. 68b(a).
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    Additionally, the Wool Act authorizes the Commission to ``make 
rules and regulations for the manner and form of disclosing information 
required by this subchapter * * * and to make such further rules and 
regulations under and in pursuance of the terms of this subchapter as 
may be necessary and proper for administration and enforcement.'' \2\ 
Pursuant to this provision, the Commission promulgated the Wool 
Rules.\3\
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    \2\ 15 U.S.C. 68d(a).
    \3\ 16 CFR part 300.
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    The Commission completed its last comprehensive review of the Rules 
in 1998, and modified the Rules twice in 1998 and again in 2000. 
Specifically, as a result of the 1998 review,\4\ the Commission, among 
other things, streamlined the labeling requirements and incorporated 
the definition of ``trimmings'' set forth in Sec.  303.12 of the Rules 
and Regulations Under the Textile Fiber Products Identification Act 
(``Textile Rules'').\5\ Later in 1998, the Commission amended the Rules 
to update Commission addresses.\6\ In 2000, it amended the Rules to 
clarify that the Commission will assign only one RN number to a 
qualified applicant and to clarify the country-of-origin disclosure 
requirements.\7\ At that time the Commission also amended certain 
provisions of the Textile Rules that the Wool Rules incorporate. In 
particular, the Commission revised the RN number application process 
set forth in the Textile Rules and amended the Textile Rules to 
reference an updated version of International Organization for 
Standardization ISO 2076: 1999(E), ``Textiles--Man-Made Fibres--Generic 
Names,'' the standard currently set forth in Sec.  303.7 of the Textile 
Rules.\8\
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    \4\ Federal Trade Commission: Rules and Regulations Under the 
Textile Fiber Products Identification Act, the Wool Products 
Labeling Act, and the Fur Products Labeling Act: Final Rule, 63 FR 
7508 (Feb. 13, 1998).
    \5\ 16 CFR part 303. The Wool Rules provide that the term 
``trimmings'' has the meaning set forth in Sec.  303.12 of the 
Textile Rules. 16 CFR 300.1(k).
    \6\ Federal Trade Commission: Miscellaneous Rules: Final Rule, 
63 FR 71582 (Dec. 29, 1998).
    \7\ Federal Trade Commission: Rules and Regulations Under the 
Textile Fiber Products Identification Act; Rules and Regulations 
Under the Wool Products Labeling Act of 1939, Final Rule, 65 FR 
75154 (Dec. 1, 2000).
    \8\ The Wool Rules provide that the application for RN numbers 
or to update information pertaining to existing RN numbers is found 
in Sec.  303.20(d) of the Textile Rules. 16 CFR 300.4(e). The Wool 
Rules also provide that the generic names of manufactured fibers 
established in Sec.  303.7 of the Textile Rules shall be used in 
disclosing fiber content. 16 CFR 300.8(b).
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    In 2006, Congress amended the Wool Act by passing the Wool Suit 
Fabric Labeling Fairness and International Standards Conforming Act 
(``Conforming Act'').\9\ This legislation declared that specified wool 
products manufactured on or after January 1, 2007, including cashmere, 
are misbranded if the average diameter of their fibers does not meet 
certain standards. The Commission seeks comment on how it should modify 
the Wool Rules to implement the Conforming Act.
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    \9\ Public Law 109-428 (Dec. 20, 2006), codified at 15 U.S.C. 
68b(a)(5)-(6).
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    The Conforming Act sets the maximum average diameter for 18 
different ``Super'' designations of wool products by average fiber 
diameter. For example, a wool product is misbranded if it is identified 
as ``Super 80's'' or ``80's'' unless the average diameter of the wool 
fibers in the product is 19.75 microns or finer.\10\ The Conforming Act 
also authorizes the Commission to adopt additional standards or 
deviations for these wool products.\11\
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    \10\ 15 U.S.C. 68b(a)(5)(A).
    \11\ 15 U.S.C. 68b(a)(5). In addition, the Conforming Act 
provides that a product is misbranded as cashmere if: (1) It does 
not consist of the fine (dehaired) undercoat fibers produced by a 
cashmere goat; (2) the average diameter of the fiber exceeds 19 
microns; or (3) it contains more than 3% by weight of cashmere 
fibers with average diameters exceeding 30 microns. 15 U.S.C. 
68b(a)(6)(A)--(C). Furthermore, the average fiber diameter for each 
cashmere product may be subject to a coefficient of variation around 
the mean that does not exceed 24 percent. 15 U.S.C. 68b(a)(6).

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[[Page 4499]]

II. Regulatory Review Program

    Since 1992, the Commission has systematically reviewed its 
regulations to ensure that they continue to achieve their intended 
goals without unduly burdening commerce. The Commission schedules its 
regulations and guides for review on a ten-year cycle; i.e., all rules 
and guides are scheduled to be reviewed ten years after implementation 
and ten years after the completion of each review. The Commission 
publishes this schedule annually, with adjustments in response to 
public input, changes in the marketplace, and resource demands.\12\
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    \12\ Federal Trade Commission: Notice Announcing Ten-year 
Regulatory Review Schedule and Request for Public Comment on the 
Federal Trade Commission's Regulatory Review Program, 76 FR 41150 
(Jul. 13, 2011).
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    When the Commission reviews a rule or guide, it publishes a notice 
in the Federal Register seeking public comment on the continuing need 
for the rule or guide as well as its costs and benefits to consumers 
and businesses. Based on this feedback, the Commission may modify or 
repeal the rule or guide to address public concerns or changed 
conditions, or to reduce undue regulatory burden. As part of this 
process, the Commission now solicits comments on, among other things, 
the economic impact of, and the continuing need for, the Wool Rules; 
the benefits of the Rules to consumers; and the burdens the Rules place 
on business.\13\
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    \13\ See questions 1 through 12 in Section IV below.
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III. Specific Issues of Interest to the Commission

    As part of this process, the Commission seeks comment on several 
issues. Specifically, the Commission seeks comment on whether it should 
clarify or modify certain Rule provisions and/or its business and 
consumer education materials to improve industry and consumer 
understanding of the Rules. Additionally, the Commission seeks comment 
on whether it could otherwise improve the Rules.\14\ These issues are 
explained below, along with two other issues involving the benefits and 
costs of certain provisions of the Wool Act.\15\
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    \14\ In its review of the Textile Rules, the Commission has 
solicited comment on provisions of the Textile Rules that the Wool 
Rules incorporate. Federal Trade Commission: Rules and Regulations 
under the Textile Fiber Products Identification Act: Advance Notice 
of Proposed Rulemaking; Request for Public Comment, 76 FR 68690 at 
68692 (Nov. 7, 2011). For example, the International Organization 
for Standardization developed ISO 2076: 2010, an updated version of 
ISO 2076: 1999(E), ``Textiles--Man-made fibres--Generic Names,'' 
referenced in Sec.  303.7 of the Textile Rules and incorporated into 
the Wool Rules in 16 CFR 300.8(b). This development may warrant 
modifying Sec.  303.7 to incorporate the updated version of ISO 
2076, which would in turn affect disclosure requirements under the 
Wool Rules.
    \15\ The Commission sought comment on issues similar to those 
explained below in its review of the Textile Rules. Id.
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    First, some of the definitions in the Rules may warrant 
modification. For example, Sec.  300.23 requires fiber content 
disclosures for certain trimmings, such as those containing or 
purporting to contain wool. Section 300.1(k) incorporates by reference 
the definition of ``trimmings'' from Sec.  303.12 of the Textile Rules, 
which provides that trimmings may include elastic material added to a 
product in minor proportion for holding, reinforcing or similar 
structural purposes. However, Sec.  303.12 of the Textile Rules lists 
product components or parts that may qualify as trim without otherwise 
defining the term ``trimmings.'' Moreover, neither the Wool Rules nor 
the Textile Rules define or elaborate on the term ``minor proportion.''
    Second, the disclosure of fiber content percentages in multiple 
languages may warrant modification of the Rules or other action such as 
addressing the issue in business education materials. Section 300.7 
requires label disclosures in English, but allows disclosures in other 
languages. However, Sec.  300.10(b) provides that such ``non-required'' 
information ``shall not minimize, detract from, or conflict with 
required information and shall not be false, deceptive, or 
misleading.'' The Commission seeks comment on the voluntary practice of 
disclosing required information in multiple languages. In particular, 
the Commission seeks comment on whether voluntary multilingual labeling 
causes consumer confusion, and if so, how to avoid such confusion while 
maintaining the benefits of such disclosures.
    Third, the Commission would benefit from comment on ways it might 
clarify or otherwise improve its consumer and business education 
materials to make them more useful and better ensure compliance with 
the Wool Act and Rules. Furthermore, comment on whether the Commission 
should continue to print paper copies of its consumer and business 
education materials could help the Commission allocate its resources 
more effectively.
    In addition, comment on the benefits and costs of several Wool Act 
provisions could assist the Commission in its administration of the 
Wool program. The Commission is considering the benefits and costs of 
the requirement that businesses identify themselves on labels using 
either their names or identifiers issued by the FTC (i.e., RN 
numbers).\16\ Specifically, the Commission seeks comment on whether 
allowing alternative identifiers, such as numbers issued by other 
nations (e.g., Canadian CA numbers), would benefit businesses without 
imposing undue costs on consumers and law enforcement.\17\
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    \16\ See 15 U.S.C. 68b(a)(2)(C) and 16 CFR 300.3(a)(3).
    \17\ See questions 13 through 19 in Section IV below.
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    Finally, the Wool Act provides that no person shall be guilty of 
misbranding a wool product if he obtains a guaranty, received in good 
faith and signed by the manufacturer or supplier residing in the United 
States, that a wool product is not misbranded.\18\ The Commission seeks 
comment on the extent to which retailers obtain guaranties and 
continuing guaranties under the Rules. The Commission also seeks 
comment on the costs of obtaining guaranties for wool products and 
whether changes in the extent and manner of importation indicate that 
the guaranty provisions of the Wool Act and Rules should be modified.
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    \18\ 15 U.S.C. 68g.
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IV. Request for Comment

    The Commission solicits comments on the following specific 
questions related to the Wool Rules.
    (1) Is there a continuing need for the Rules as currently 
promulgated? Why or why not?
    (2) What benefits have the Rules provided to, or what significant 
costs have the Rules imposed on, consumers? Provide any evidence 
supporting your position.
    (3) What modifications, if any, should the Commission make to the 
Rules to increase their benefits or reduce their costs to consumers?
    (a) How would these modifications affect the costs and benefits of 
the Rules for consumers and businesses, particularly small businesses?
    (b) Provide any evidence supporting your proposed modifications.
    (4) What impact have the Rules had in promoting the flow of 
truthful information to consumers and preventing the flow of deceptive 
information to consumers? Provide any evidence supporting your 
position.
    (5) What benefits, if any, have the Rules provided to, or what 
significant

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costs, including costs of compliance, have the Rules imposed on 
businesses, particularly small businesses? Provide any evidence 
supporting your position.
    (6) What modifications, if any, should be made to the Rules to 
increase their benefits or reduce their costs to businesses, 
particularly small businesses?
    (a) How would these modifications affect the costs and benefits of 
the Rules for consumers and businesses, particularly small businesses?
    (b) Provide any evidence supporting your proposed modifications.
    (7) Provide any evidence concerning the degree of industry 
compliance with the Rules. Does this evidence indicate that the Rules 
should be modified? If so, why and how? If not, why not?
    (8) Provide any evidence concerning whether any of the Rules' 
provisions are no longer necessary. Explain why these provisions are 
unnecessary.
    (9) What potentially unfair or deceptive practices concerning wool 
labeling, not covered by the Rules, are occurring in the marketplace?
    (a) With reference to such practices, should the Rules be modified? 
If so, why and how? If not, why not?
    (b) Provide any evidence, such as empirical data, consumer 
perception studies, or consumer complaints, demonstrating the extent of 
such practices.
    (c) Provide any evidence demonstrating whether such practices cause 
consumer injury.
    (10) What modifications, if any, should be made to the Rules to 
account for current or impending changes in technology or economic 
conditions?
    (a) How would these modifications affect the costs and benefits of 
the Rules for consumers and businesses, particularly small businesses?
    (b) Provide any evidence supporting the proposed modifications.
    (11) Do the Rules overlap or conflict with other federal, state, or 
local laws or rules, such as those enforced by U.S. Customs and Border 
Protection? If so, how?
    (a) With reference to the asserted conflicts, should the Rules be 
modified? If so, why and how? If not, why not?
    (b) Have the Rules assisted in promoting national consistency with 
respect to wool labeling and advertising?
    (c) Provide any evidence supporting your position.
    (12) Are there foreign or international laws, regulations, or 
standards with respect to wool labeling or advertising that the 
Commission should consider as it reviews the Rules? If so, what are 
they?
    (a) Should the Rules be modified in order to harmonize with these 
international laws, regulations, or standards? If so, why and how? If 
not, why not?
    (b) How would such harmonization affect the costs and benefits of 
the Rules for consumers and businesses, particularly small businesses?
    (c) Provide any evidence supporting your position.
    (13) How should the Commission modify the Rules to address the 
amendments to the Wool Act set forth in the 2006 Wool Suit Fabric 
Labeling Fairness and International Standards Conforming Act?
    (a) How would these modifications affect the costs and benefits of 
the Rules for consumers and businesses, particularly small businesses?
    (b) Should the Commission adopt additional standards or deviations 
from average fiber diameters, or does the limited deviation for 
cashmere products as provided in the amendments adequately achieve the 
purpose of the amendments? If so, why? If not, why not? How should the 
Commission address this issue? How should any allowable deviations be 
determined or measured? Identify any tests or methodologies that the 
Commission should consider in addressing this issue.
    (c) Provide any evidence supporting your proposed modifications.
    (14) Should the Commission modify the Rules to add or clarify 
definitions of terms set forth in the Rules, such as the definition of 
``trimmings'' in Sec.  300.1(k), which incorporates by reference 
Section 303.12 of the Textile Rules? If so, why and how? If not, why 
not?
    (a) How would these modifications affect the costs and benefits of 
the Rules for consumers and businesses, particularly small businesses?
    (b) Provide any evidence supporting your position.
    (15) Should the Commission modify Section 300.10 or consider any 
additional measures regarding non-required information such as the 
voluntary use of multilingual labels? In particular, do multilingual 
labels pose the potential to confuse consumers and, if so, how could 
such confusion be avoided while providing the benefits of disclosures 
in multiple languages?
    (a) How would these modifications affect the costs and benefits of 
the Rules for consumers and businesses, particularly small businesses?
    (b) Provide any evidence supporting your position.
    (16) Is our business compliance guidance and consumer education 
about the Rules useful? Can it be improved? If so, how?
    (a) Should the Commission consider consumer education or other 
measures to help non-English-speaking consumers obtain the information 
that must be disclosed under the Wool Act and Rules?
    (b) Should the Commission print copies of consumer education 
materials, or is a downloadable pdf at www.business.ftc.gov sufficient 
for your needs?
    (17) Regarding the requirement that businesses identify themselves 
on labels using either their names or identifiers issued by the FTC, 
what are the benefits and costs to consumers and businesses of allowing 
businesses to use alternative identifiers, such as numbers issued by 
other nations? Provide any evidence supporting your position.
    (18) To what extent do retailers obtain valid separate or 
continuing guaranties that comply with the requirements of the Wool Act 
and Rules, i.e., guaranties signed by a person residing in the United 
States and, in the case of continuing guaranties, signed under the 
penalty of perjury?
    (a) Do retailers who obtain such guaranties obtain them for all, 
most, some, or few of the wool products they sell?
    (b) Why do retailers decline to obtain such guaranties?
    (c) Have changes in technology, such as the use of electronic 
documents, affected the ability of retailers to obtain valid separate 
or continuing guaranties? If so, why and how? If not, why not?
    (d) Provide any evidence supporting your position.
    (19) How many and what proportion of wool products sold in the U.S. 
are imported? How many and what proportion of imported products are 
imported directly by retailers, including products shipped to consumers 
directly from foreign sources after the consumers purchase them online 
from U.S. retailers? What proportion are imported by businesses located 
in the United States for resale or distribution to retailers? How have 
these proportions changed since the Wool Act and Rules became 
effective?
    (a) Have changes in the extent or manner in which wool products are 
imported affected the ability of retailers to obtain valid separate or 
continuing guaranties? If so, does the ability of retailers to obtain 
such guaranties differ depending on whether the wool products are 
imported directly by retailers versus imported by businesses for resale 
or distribution to retailers?
    (b) Identify and explain the costs of obtaining valid guaranties 
for imported

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wool products and the impact of such costs on the ability of retailers 
to obtain valid guaranties.
    (c) Do the costs or difficulty of obtaining guaranties for imported 
wool products create a problem for retailers? If so, why and how? If 
not, why not?
    (d) Do changes in the extent or manner in which wool products are 
imported indicate that the Wool Act and Rules should be modified? If 
so, why and how? If not, why not?
    (e) Provide any evidence supporting your position.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before March 26, 2012. 
Write ``Wool Rules, 16 CFR part 300, Project No. P124201'' on your 
comment. Your comment B including your name and your state B will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site. Because your 
comment will be made public, you are solely responsible for making sure 
that your comment doesn't include any sensitive personal information, 
such as anyone's Social Security number, date of birth, driver's 
license number or other state identification number or foreign country 
equivalent, passport number, financial account number, or credit or 
debit card number. You are also solely responsible for making sure that 
your comment doesn't include any sensitive health information, like 
medical records or other individually-identifiable health information. 
In addition, don't include any ``[t]rade secret or any commercial or 
financial information which is obtained from any person and which is 
privileged or confidential,'' as provided in Section 6(f) of the FTC 
Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In 
particular, don't include competitively-sensitive information such as 
costs, sales statistics, inventories, formulas, patterns, devices, 
manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you must follow the procedure explained in 
FTC Rule 4.9(c), 16 CFR 4.9(c).\19\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \19\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/woolanpr by following the instructions on the web-based form. If 
this Notice appears at http://www.regulations.gov/#!home, you also may 
file a comment through that Web site.
    If you file your comment on paper, write ``Wool Rules, 16 CFR Part 
300, Project No. P124201'' on your comment and on the envelope and mail 
or deliver it to the following address: Federal Trade Commission, 
Office of the Secretary, Room H-113 (Annex Q), 600 Pennsylvania Avenue 
NW., Washington, DC 20580. If possible, submit your paper comment to 
the Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before March 26, 2012. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2012-1862 Filed 1-27-12; 8:45 am]
BILLING CODE 6750-01-P