[Federal Register Volume 69, Number 192 (Tuesday, October 5, 2004)]
[Rules and Regulations]
[Pages 59708-59750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22309]



[[Page 59707]]

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Part IV





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 60



Mandatory Country of Origin Labeling of Fish and Shellfish; Interim 
Rule

Federal Register / Vol. 69, No. 192 / Tuesday, October 5, 2004 / 
Rules and Regulations

[[Page 59708]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 60

[No. LS-03-04]
RIN 0581-AC26


Mandatory Country of Origin Labeling of Fish and Shellfish

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 (Farm Bill) 
and the 2002 Supplemental Appropriations Act (2002 Appropriations) 
amended the Agricultural Marketing Act of 1946 (Act) to direct the 
Secretary of Agriculture to promulgate regulations by September 30, 
2004, requiring retailers to notify their customers of the country of 
origin of covered commodities. Covered commodities include 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; and peanuts. The FY 2004 
Consolidated Appropriations Act (2004 Appropriations) (Public Law 108-
199) delayed the applicability of mandatory country of origin labeling 
(COOL) for all covered commodities except wild and farm-raised fish and 
shellfish until September 30, 2006. After issuance of a proposed rule, 
the Department has decided to provide further opportunity to comment 
due to the changes made as a result of comments received and the costs 
associated with this 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 fish and shellfish covered commodities. Regulatory 
provisions for the other covered commodities will be provided in a 
separate regulatory action as appropriate.

DATES: This interim final rule is effective April 4, 2005. The 
requirements of this rule do not apply to frozen fish or shellfish 
caught or harvested before December 6, 2004. Comments must be submitted 
on or before January 3, 2005, to be assured of consideration.

ADDRESSES: Send written comments to: Country of Origin Labeling 
Program, Room 2092-S; Agricultural Marketing Service (AMS), USDA; STOP 
0249; 1400 Independence Avenue, SW., Washington, DC 20250-0249, or by 
facsimile to (202) 720-3499, or by e-mail to <a href="/cdn-cgi/l/email-protection#a1c2cececde1d4d2c5c08fc6ced7"><span class="__cf_email__" data-cfemail="13707c7c7f53666077723d747c65">[email protected]</span></a>. State that 
your comments refer to Docket No. LS-03-04. Comments may also be 
submitted electronically through http://www.regulations.gov. All 
comments received will be posted to the AMS Web site at: http://www.ams.usda.gov/cool/. Comments may also be inspected at the above 
location between 8 a.m. and 4:30 p.m., Monday through Friday, except 
holidays. 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: William Sessions, Associate Deputy 
Administrator, Livestock and Seed Program, AMS, USDA, by telephone on 
202/720-5705, or via e-mail at: <a href="/cdn-cgi/l/email-protection#7f08161313161e12510c1a0c0c1610110c3f0a0c1b1e51181009"><span class="__cf_email__" data-cfemail="35425c59595c54581b465046465c5a5b4675404651541b525a43">[email protected]</span></a>.

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. The second section provides a discussion of the 
rule's requirements, including a summary of the comments received in 
response to the proposed rule published in the October 30, 2003, 
Federal Register (68 FR 61944) and the Agency's responses to these 
comments. 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 Farm Bill (Public Law 107-171) amended the Act (7 U.S.C. 1621 
et seq.) to direct the Secretary of Agriculture to issue regulations by 
September 30, 2004, to require retailers to notify their customers of 
the country of origin of beef (including veal), lamb, pork, fish, 
shellfish, perishable agricultural commodities, and peanuts beginning 
September 30, 2004. The 2004 Appropriations Act (Public Law 107-206) 
delayed the applicability of mandatory COOL for all covered commodities 
except wild and farm-raised fish and shellfish until September 30, 
2006. 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.). Food service establishments are 
specifically excluded 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'' label.
How Do I Find Out if My Product Is Considered a Covered Commodity or if 
It Is Labeled Accurately Under the COOL Law?
    Questions regarding whether a product is considered a covered 
commodity or is labeled accurately under this regulation may be e-
mailed to <a href="/cdn-cgi/l/email-protection#25464a4a4965505641440b424a53"><span class="__cf_email__" data-cfemail="d6b5b9b9ba96a3a5b2b7f8b1b9a0">[email protected]</span></a>.
What Is the Definition of a Processed Food Item and What Types of 
Products Are Considered Processed Food Items?
    Fish and shellfish covered commodities are exempt from COOL under 
this rule if they are an ingredient in a processed food item. An 
ingredient is a component either in part or in full of a finished 
retail food product. A processed food item is a retail item derived 
from fish or shellfish 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 components (e.g., 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, compressing into blocks and cutting into 
portions). Examples of fish and shellfish combined with different 
covered commodities or other substantive food components include 
scallops and shrimp in a seafood medley, breaded shrimp, breaded fish 
fillets, coated shrimp, and marinated fish fillets.

[[Page 59709]]

What Requirements Must Be Met for a Retailer To Label a Covered 
Commodity as Being of U.S. 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 fish and shellfish covered commodities 
are as follows: Farm-raised fish and shellfish--covered commodities 
must be derived exclusively from fish or shellfish hatched, raised, 
harvested, and processed in the United States, and that has not 
undergone a substantial transformation (as established by U.S. Customs 
and Border Protection) outside of the United States; 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, and that has not undergone a substantial transformation 
(as established by U.S. Customs and Border Protection) outside of the 
United States.
How Should I Label a Retail Product That Contains a Covered Commodity 
(Such as a Bag of Shrimp) Commingled From More Than One Country of 
Origin?
    For imported covered commodities that have not subsequently been 
substantially transformed in the United States that are commingled with 
other imported and/or U.S. origin commodities, the declaration shall 
indicate the countries of origin for all covered commodities in 
accordance with existing Federal legal requirements. For imported 
covered commodities that have subsequently undergone substantial 
transformation in the United States that are commingled with other 
imported covered commodities that have subsequently undergone 
substantial transformation in the United States (either prior to or 
following substantial transformation in the United States) and/or U.S. 
origin covered commodities, the declaration shall indicate the 
countries of origin contained therein or that may be contained therein.
What Are the Requirements for Maintaining Country of Origin Information 
for Blended Covered Commodities That Contain Products From More Than 
One Country of Origin?
    The labeling requirements are consistent with other Federal legal 
requirements under which facilities are not required to separately 
track throughout the process, and ultimately into each individual 
retail package, the country source of the commodities that are found 
within each individual retail package. Rather, the declaration of the 
retail product can indicate the several countries of origin that are 
represented in the overall blending process, without being required to 
verify which specific countries of origin are found within each 
individual retail package.
Why Can't the Department of Agriculture (USDA) Track Only Imported 
Products and Consider All Other Products To Be of ``U.S. Origin?''
    The COOL provision of the Farm Bill applies to all covered 
commodities. Moreover, the law specifically identifies the criteria 
that products of U.S. 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 Be Enforced?
    The effective date of this regulation is six months following the 
date of publication of this interim final rule. The requirements of 
this rule do not apply to frozen fish or shellfish caught or harvested 
before December 6, 2004. The country of origin statute provides that 
``not later than September 30, 2004, the Secretary shall promulgate 
such regulations as are necessary to implement this subtitle.'' Many of 
the covered commodities sold at retail are in a frozen or otherwise 
preserved state (i.e., not sold as ``fresh''). Thus, many of these 
products would already be in the chain of commerce prior to September 
30, 2004, and the origin/production information may not be known. 
Therefore, it is reasonable to delay the effective date of this interim 
final rule for six months to allow existing inventories to clear 
through the channels of commerce and to allow affected industry members 
to conform their operations to the requirements of this rule. During 
this time period, AMS will conduct an industry education and outreach 
program concerning the provisions and requirements of this rule. AMS 
also will focus its resources for the six months immediately following 
the effective date of this interim final rule on industry education and 
outreach. After a careful review of all its implications, AMS has 
determined that its allocation of enforcement resources will ensure 
that the rule is effectively and rationally implemented. This AMS plan 
of outreach and education, conducted over a period of one year, should 
significantly aid the industry in achieving compliance with the 
requirements of this rule.
How Will the Requirements of This Regulation Be Enforced?
    USDA will seek to enter into partnerships with States having 
existing enforcement infrastructure to assist in the administration of 
this law. USDA will determine the scheduling and procedures for the 
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. In addition, the 
Agency plans to publish a compliance guide that will provide the 
industry with information on compliance and the phasing in of active 
enforcement.
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, in such a 
way that identifies the product unique to that transaction by means of 
a lot number or other unique identifier, for a period of 1 year from 
the date of the transaction. For retailers, records and other 
documentary evidence relied upon at the point of sale by the retailer 
to establish a product's country(ies) of origin and method(s) of 
production (wild and/or farm-raised) must be available during normal 
business hours to any duly authorized representatives of USDA for as 
long as the product is on hand. For pre-labeled products, the label 
itself is sufficient evidence on which the retailer may rely to 
establish a product's origin and method(s) of production (wild and/or 
farm-raised). Records that identify the supplier, the product unique to 
that transaction by means of a lot number or other unique identifier, 
and for products that are not pre-labeled, the country of origin and 
method of production (wild and/or farm-raised) information must be

[[Page 59710]]

maintained for a period of 1 year from the date the origin and 
production designations are made at retail.
How Does This Regulation Impact Existing State Country of Origin 
Labeling Programs?
    To the extent that State country of origin labeling programs 
encompass commodities which 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.
Can Food Products That Are Not Covered by This Regulation Be 
Voluntarily Labeled With COOL Information?
    Yes. Such voluntary claims must be truthful and accurate and adhere 
to existing Federal labeling regulations.

Prior Documents in This Proceeding

    This interim final rule is issued pursuant to the Farm Bill, the 
2002 Appropriations, and the 2004 Appropriations, which amended the 
Act.
    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.

Overview of the Law

    Section 10816 of Public Law 107-171 (7 U.S.C. 1638-1638d) amended 
the Act (7 U.S.C. 1621 et seq.) to require retailers to inform 
consumers of the country of origin of covered commodities beginning 
September 30, 2004.
    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. Seafood products, both imported and domestic, 
must meet the food safety standards of the Food and Drug Administration 
(FDA). The law defines the term ``covered commodity'' 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; and peanuts. 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 
defines the term ``wild fish'' as naturally-born or hatchery-raised 
fish and shellfish harvested in the wild and excludes net-pen 
aquacultural or other farm-raised fish.
    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 farm-raised fish and shellfish, the covered 
commodity must be derived from fish or shellfish hatched, raised, 
harvested, and processed in the United States. In the case of wild fish 
and shellfish, the covered commodity must be derived from fish or 
shellfish 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 law also requires that fish and 
shellfish covered commodities be labeled to indicate whether they are 
wild or farm-raised.
    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 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 produce 
exceeds $230,000 during a calendar year. Since fish markets and similar 
specialty shops do not generally sell fruits and vegetables, they do 
not meet the PACA definition of a retailer and therefore are not 
covered by 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 require that any person that prepares, 
stores, handles, or distributes a covered commodity for retail sale 
maintain a verifiable recordkeeping audit trail. The law prohibits the 
Secretary from using a mandatory identification system to verify the 
country of origin of a covered commodity and provides examples of 
existing certification programs that may be used to certify the country 
of origin of a covered commodity. The law contains enforcement 
provisions for both retailers and suppliers that include civil 
penalties of up to $10,000 for each violation. 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. Highlights of This Interim Final Rule

Covered Commodities

    The term ``covered commodity'' includes: farm-raised fish and 
shellfish (including fillets, steaks, nuggets, and any other flesh) and 
wild fish and shellfish (including fillets, steaks, nuggets, and any 
other flesh).

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 fish or shellfish 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 (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,

[[Page 59711]]

roasting), curing (e.g., salt curing, sugar curing, drying), smoking 
(cold or hot), and restructuring (e.g., emulsifying and extruding, 
compressing into blocks and cutting into portions). Examples of items 
excluded include fish sticks, surimi, mussels in tomato sauce, seafood 
medley, coconut shrimp, soups, stews, and chowders, sauces, pates, 
salmon that has been smoked, marinated fish fillets, canned tuna, 
canned sardines, canned salmon, crab salad, shrimp cocktail, gefilte 
fish, sushi, and breaded shrimp.

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. 
The specific requirements for each commodity are as follows:
    (a) Farm-raised Fish and Shellfish--covered commodities must be 
derived exclusively from fish or shellfish hatched, raised, harvested, 
and processed in the United States, and that has not undergone a 
substantial transformation (as established by U.S. Customs and Border 
Protection) outside of the United States.
    (b) 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, and that has not 
undergone a substantial transformation (as established by U.S. Customs 
and Border Protection) outside of the United States.

Labeling Country of Origin for Imported Products That Have Not Been 
Substantially Transformed in the United States

    Under this interim final rule, an imported covered commodity shall 
retain its origin as declared to U.S. Customs and Border Protection at 
the time the product enters the United States, through retail sale, 
provided it has not undergone a substantial transformation (as 
established by U.S. Customs and Border Protection) in the United 
States.
    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 Imported Products That Have Been Substantially Transformed in 
the United States

    Under this interim final rule, in the case of wild fish and 
shellfish, if a covered commodity was imported from country X and 
substantially transformed (as established by U.S. Customs and Border 
Protection guidelines and policies) in the United States or aboard a 
U.S. flagged vessel, the product shall be labeled at retail as ``From 
[country X], processed in the United States.'' The covered commodity 
must also be labeled to indicate that it was derived from wild fish or 
shellfish.
    In the case of farm-raised fish, if a covered commodity was 
imported from country X at any stage of production and substantially 
transformed (as established by U.S. Customs and Border Protection 
guidelines and policies) in the United States, the product shall be 
labeled at retail as ``From [country X], processed in the United 
States.'' The covered commodity shall also be labeled to indicate that 
it was derived from farm-raised fish or shellfish.

Defining Country of Origin for Blended Products

    Under this interim final rule, the country of origin declaration of 
blended or commingled retail food items comprised of the same covered 
commodity (e.g., bag of shrimp) having different origins, shall 
indicate the countries of origin for covered commodities in accordance 
with existing Federal legal requirements when the commingled product 
contains imported covered commodities that have not subsequently been 
substantially transformed in the United States. When the retail product 
contains imported covered commodities that have subsequently undergone 
substantial transformation in the United States commingled with other 
imported covered commodities that have subsequently undergone 
substantial transformation in the United States (either prior to or 
following substantial transformation in the United States) and/or U.S. 
origin covered commodities, the declaration shall indicate the 
countries of origin contained therein or that may be contained therein.

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 and method of production information 
(wild and/or farm-raised), 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 
and method of production (wild and/or farm-raised) designation may be 
provided to consumers by means of a label, stamp, mark, placard, 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. The country of 
origin declaration and method of production (wild and/or farm-raised) 
designation may be combined or made separately. Except as provided in 
Sec.  60.200(g) and Sec.  60.200 (h)(2) of this regulation, the 
declaration of the country(ies) of origin of a product shall be listed 
according to existing Federal legal requirements. Abbreviations and 
variant spellings that unmistakably indicate the country of origin, 
such as ``U.K.'' for ``The United Kingdom of Great Britain and Northern 
Ireland'' are acceptable. The adjectival form of the name of a country 
may be used as proper notification of the country(ies) 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.
    With respect to the production designation, various forms of the 
production designation are acceptable, including ``wild caught,'' 
``wild,'' ``farm-raised,'' ``farmed,'' or a combination of these terms 
for blended products that contain both wild and farm-raised fish or 
shellfish provided it can be readily understood by the consumer and is 
in conformance with other Federal labeling laws. Designations such as 
``ocean caught,'' ``caught at sea'', ``line caught,'' ``cultivated,'' 
or ``cultured'' do not meet the requirements of this regulation. 
Alternatively, the method of production (wild and/or farm-raised) 
designation may also be in the form of a check box. However, the 
labeling requirements under this rule do not supersede any existing 
Federal legal requirements, unless otherwise specified, and any such 
country of origin and method of production (wild and/or farm-raised) 
notification must not obscure or intervene with other labeling 
information required by existing regulatory requirements.
    In order to provide the industry with as much flexibility as 
possible, this rule does not contain specific requirements

[[Page 59712]]

as to the exact placement or size of the country of origin or method of 
production (wild and/or farm-raised) declaration. However, such 
declarations must be conspicuous and allow consumers to determine the 
country(ies) of origin and method(s) of production (wild and/or farm-
raised) when making their purchases and provided that existing Federal 
labeling requirements must be followed. For example, under FDA labeling 
regulations (21 CFR 101.2) it is not permissible to include the method 
of production (wild and/or farm-raised) designation in either the 
ingredient statement or as part of the common or usual name of a 
product.

Recordkeeping Requirements and Responsibilities

    The law states that the Secretary may require any person that 
prepares, stores, handles, or distributes a covered commodity for 
retail sale to maintain a verifiable recordkeeping audit trail that 
will permit the Secretary to verify compliance. As such, records and 
other documentary evidence to substantiate origin declarations and 
designations of wild and/or farm-raised 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., harvesters, producers, distributors, handlers, etc.), 
must make available information to the subsequent purchaser about the 
country(ies) of origin and method(s) of production (wild and/or farm-
raised) 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 and method(s) of 
production, unique to that transaction by means of a lot number or 
other unique identifier. If after October 6, 2005, a frozen fish or 
shellfish covered commodity caught or harvested before December 6, 
2004, is offered for retail sale and for which origin and/or method of 
production information is not known, the supplier must possess records 
to substantiate the date of harvest or capture of the fish or 
shellfish.
    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, in such a 
way that identifies the product unique to that transaction by means of 
a lot number or other unique identifier, 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 and method 
of production (wild and/or farm-raised) designation must possess 
records necessary to substantiate the claim.
    For an imported covered commodity, the importer of record as 
determined by CBP, must ensure that records: provide clear product 
tracking from the U.S. port of entry to the immediate subsequent 
recipient and accurately reflect the country(ies) of origin and 
method(s) of production (wild and/or farm-raised) 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.
    Any intermediary supplier (i.e., not the supplier responsible for 
initiating a country of origin declaration and method of production 
(wild and/or farm-raised) designation) handling a covered commodity 
that is found to be designated incorrectly for country of origin and/or 
method of production (wild and/or farm-raised) shall not be held liable 
for a violation of the Act by reason of the conduct of another if the 
intermediary supplier could not have been reasonably expected to have 
had knowledge of the violation.
    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 product's country(ies) 
of origin and method(s) of production (wild and/or farm-raised), or, if 
applicable, date of harvest or capture designation, must be available 
during normal business hours to any duly authorized representatives of 
USDA for as long as the product is on hand. 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 a 
product's origin and method(s) of production (wild and/or farm-raised). 
Records that identify the retail supplier, the product unique to that 
transaction by means of a lot number or other unique identifier, and 
for products that are not pre-labeled, the country of origin and method 
of production (wild and/or farm-raised) information must be maintained 
for a period of 1 year from the date the origin declaration is made at 
retail. Such records may be located at the retailer's point of 
distribution, warehouse, central offices, or other off-site location.
    Any retailer handling a covered commodity that is found to be 
designated incorrectly as to country of origin and/or the method of 
production (wild and/or farm-raised) shall not be held liable by reason 
of the conduct of another if the retailer could not have been 
reasonably expected to have had knowledge of the violation.

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 will seek to enter 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 in a 
timely manner during normal hours of business 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 $10,000 for each 
violation. For retailers, the law states that if the Secretary 
determines that a retailer is in violation of the Act, the Secretary 
must notify the retailer of the determination and provide the retailer 
with a 30-day period during which the retailer may take necessary steps 
to comply. If upon completion of the 30-day period the Secretary 
determines the retailer has willfully violated the Act, after providing 
notice and an opportunity for a hearing, the retailer may be fined not 
more than $10,000 for each violation.
    For suppliers, the law states that section 253 of the Act shall 
apply to a violation of this subpart. This section states in part that 
in determining the amount of a civil penalty to be assessed for 
violations of this subpart, the

[[Page 59713]]

Secretary must consider the gravity of the offense, the size of the 
business involved, and the effect of the penalty on the ability of the 
person that has committed the violation to continue in business. The 
Act also states that the Secretary shall consider whether there has 
been a pattern of errors in the violation of this subtitle in 
determining whether to assess a civil penalty. This section also 
provides that in addition to or in lieu of a civil penalty, the 
Secretary may issue a cease and desist order from continuing any 
violation. In addition, section 253 also contains the administrative 
process that must be followed in assessing a civil penalty or cease and 
desist order. As with retailers, if the Secretary determines that a 
supplier is in violation of the Act, the Secretary will notify the 
supplier of the determination and provide the supplier with a 30-day 
period during which the supplier may take necessary steps to comply.
    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. Thus, 
inaccurate country of origin labeling of covered commodities may lead 
to additional penalties under this statute as well.
    In order to provide regulated parties with additional information 
relative to the enforcement of this program, AMS will issue a 
compliance guide. This compliance guide will contain additional 
information about the audit process, the types of records that may be 
useful in verifying compliance with this regulation, examples of 
instances that would be considered violations, as well as other 
information that may be useful in complying with this regulation.

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 71039) an additional 60 days. AMS received over 5,600 timely 
comments from consumers, retailers, foreign governments, producers, 
wholesalers, manufacturers, distributors, members of Congress, trade 
associations and other interested parties. The majority of the comments 
received were from consumers expressing support for the requirement to 
label the method of production of fish and shellfish as either wild 
and/or farm-raised. Numerous other comments related to the definition 
of a processed food item, the recordkeeping requirements for both 
retailers and suppliers, and the enforcement of the program. In 
addition, over 100 late comments were received which generally 
reflected the substance of the timely comments received. Specific 
comments are discussed in detail below. As this interim final rule 
contains the requirements for labeling fish and shellfish covered 
commodities, to the extent practicable, only those comments that 
pertain to fish and shellfish covered commodities and to the general 
requirements of this regulation are discussed herein. In some cases, 
the summary of comments and Agency response encompass both fish and 
shellfish covered commodities and other covered commodities. These 
comments and the Agency response are included in this interim final 
rule in cases where their inclusion facilitates the reader's 
understanding of the changes that were made in this rule based on the 
commenters' recommendations.

Definitions

Covered Commodity
    Summary of Comments: Numerous commenters suggested that the 
definition of covered commodity should be amended to include poultry.
    Agency Response: Section 281(2)(A) of the Act defines the term 
``covered commodity'' as ``muscle cuts of beef, lamb, and pork; ground 
beef, ground lamb, ground pork; farm-raised fish; wild fish; a 
perishable agricultural commodity; and peanuts.'' Accordingly, this 
recommendation is not adopted.
Processed (for Fish and Shellfish)
    Summary of Comments: One commenter recommended that USDA adopt a 
clearer definition of determining a country of origin's location of 
processing if USDA is unable to clearly articulate what substantial 
transformation means in this rule. Other commenters recommended that 
the definition of processed be modified so that imported products 
subjected to processing beyond repackaging but less than substantial 
transformation should be eligible to voluntarily be labeled as 
processed in the United States.
    Agency Response: Because of changes made by the Agency in the 
regulatory text in Sec.  60.200(g) to simplify the labeling of imported 
products that have been substantially transformed in the United States, 
the Agency no longer believes that a separate definition of processed 
is necessary. With respect to allowing imported products that have been 
subjected to processing beyond repackaging but less than substantial 
transformation to voluntarily be labeled as processed in the United 
States, such labeling would not conform to U.S. Customs and Border 
Protection requirements. Accordingly, because the definition of 
processed has been deleted no changes have been made as a result of 
these comments.
Processed Food Item
    Summary of Comments: AMS received numerous comments on the 
definition of a processed food item. Some commenters offered specific 
recommendations as to what should be considered a processed food item 
such as canned fish, breaded products, all products that have been 
substantially transformed, and all seafood products made from block 
derivatives. Other commenters offered specific recommendations as to 
what products should not be considered a processed food item such as 
smoked fish, cured products, and simple mixtures of covered 
commodities. Several commenters recommended that the first alternative 
definition provided in the proposed rule should be utilized which would 
exclude any product that bears an ingredient statement. Several other 
commenters recommended that the second alternative definition provided 
in the proposed rule should be utilized which would exclude any covered 
commodity that has undergone processing as defined by other existing 
Federal regulations. Other commenters recommended that the third 
alternative definition provided in the proposed rule should be utilized 
which would only exclude a covered commodity if it is mixed with other 
commodities to create a distinct food item such as a pizza or TV 
dinner. Another commenter recommended that a processed food item be 
defined as ``transformation of a covered commodity that results in a 
finished product that has a distinct character from the covered 
commodity so that consumers do not use the item in the same fashion as 
they would use the covered commodity itself.'' Another commenter stated 
his belief that Congress intended for COOL to cover only those products 
not currently covered under existing tariff laws. Other commenters 
expressed general concern about the proposed definition, but did not 
offer any alternatives. Some commenters stated that the definition as 
proposed will result in USDA deciding on a case by case basis which 
food products must be labeled. Other commenters expressed concern that 
the concept of substantial transformation which is the basis for 
determining origin under both CBP regulations and the

[[Page 59714]]

World Trade Organization's Rules of Origin is being overwritten.
    Agency Response: In an effort to make the definition of a processed 
food item clearer, the Agency has modified the language in the proposed 
rule to provide specific examples of the types of processing that would 
result in a product being considered a processed food item. In 
addition, the Agency has determined that the application of the 
definition and thus the scope of covered commodities should be 
modified. Accordingly, under this interim final rule, all cooked (e.g., 
canned fish, cooked shrimp) and breaded products, which in the case of 
shrimp can account for up to 50 percent of the finished product, are 
considered processed food items and are excluded from labeling under 
this regulation. In addition, retail items that have been given a 
distinct flavor (e.g., Cajun marinated catfish) are also considered 
processed food items. Further, to provide additional guidance to the 
industry, the Agency has added additional examples of the types of 
products that would be excluded in the Questions and Answers section of 
this rule. With respect to the issue of substantial transformation, the 
law specifically defines the criteria for a covered commodity to be 
labeled as having a United States country of origin. Thus, under this 
regulation, imported products that have been subsequently substantially 
transformed in the United States are not eligible to bear a ``product 
of the U.S.'' declaration.
Raised
    Summary of comments: One commenter recommended that the definition 
of raised for farm-raised fish and shellfish be modified to include 
farm-raised fish and shellfish originally obtained from the wild.
    Agency Response: The Agency defined ``raised'' in the case of farm-
raised fish and shellfish in the context of defining the production 
steps contemplated by the law for this commodity (hatched, raised, 
harvested, and processed). The Agency separately defined the term 
``farm-raised fish'' to include farm-raised fish and shellfish 
originally obtained from the wild. However, the Agency has modified the 
definition of ``raised'' to clarify that it is defined in context of 
the production steps defined by the law (hatched, raised, harvested, 
and processed).
Retailer
    Summary of comments: Numerous commenters recommended that the 
definition of retailer be modified to include specialty shops such as 
fish markets.
    Agency Response: The law specifically defines the term retailer as 
having the meaning given that term in section 1(b) of PACA. 
Accordingly, fish markets or any other retail entities that either 
invoice fruits and vegetables at a level below the $230,000 threshold 
or do not sell any fruits and vegetables at all are not included. 
Therefore, this recommendation is not adopted.
United States Country of Origin
    Summary of comments: One commenter expressed concern that the 
definition of United States country of origin departs from the relevant 
international standard in which the country of origin is defined as the 
country where substantial transformation occurred.
    Agency Response: The law specifically defines the criteria a 
covered commodity must meet to bear a United States country of origin 
declaration. As such, the Agency is unable to modify this definition in 
the manner recommended by the commenter. However, the Agency has 
modified the definition to clarify that products otherwise meeting the 
definition of U.S. origin that are subsequently substantially 
transformed outside of the United States are not eligible to bear a 
U.S. origin declaration.

Country of Origin Notification

General
    Summary of comments: One commenter recommended that Sec.  60.200(a) 
of the proposed rule should be deleted as it could be construed as 
requiring each individual commodity to bear a label indicating its 
country of origin.
    Agency Response: The Agency agrees with the commenter that the 
language could be interpreted as requiring each individual covered 
commodity to bear a label. However, the Agency does not agree that this 
section should be deleted. The Agency has modified the language in this 
section to clarify that the regulation does not require each covered 
commodity to be individually labeled.
Designation of Wild Fish and Farm-Raised Fish
    Summary of Comments: Several commenters recommended the Agency 
clarify that the designation of the method of production for fish and 
shellfish as either wild or farm-raised is a separate requirement from 
the requirement to provide notice of a covered commodity's country of 
origin.
    Agency Response: The Agency agrees with the commenters' 
recommendation and has modified Sec.  60.200(d) accordingly.
Labeling Covered Commodities When the Product Has Entered the United 
States During the Production Process
    Summary of Comments: Several commenters recommended alternative 
methods of labeling products that have entered the United States during 
the production process. Several commenters recommended that mixed 
origin products should be labeled to reflect each country involved in 
the production process (e.g., capture/farming country, processing 
country). Other commenters recommended that the Agency should delete 
any requirement to display the origin where processing occurred for any 
of the covered commodities. Several other commenters expressed support 
for the provisions contained in the proposed rule. Another commenter 
recommended that all countries involved in the production of a covered 
commodity be listed alphabetically. In addition, one commenter 
recommended that the words ``by a vessel other than a U.S. flagged 
vessel'' be inserted after the phrase ``was harvested in country X'' in 
Sec.  60.200(2)(ii).
    Agency Response: The Agency has made modifications to Sec.  
60.200(g) in order to harmonize the requirements of this regulation 
with current Federal legal requirements. No additional changes have 
been made as a result of these comments.
Blended Products
    Summary of Comments: Numerous commenters recommended alternative 
methods for labeling products comprised of the same commodity that are 
prepared from raw material sources having different origins. Several 
commenters recommended that companies should be allowed to list the 
countries either alphabetically or by weight. Numerous other commenters 
recommended that companies be allowed to use labels that indicate what 
countries may be contained within the package. Several commenters 
recommended that AMS consider using general rather than specific labels 
for products involving more than one country such as ``mixed origin.'' 
Another commenter recommended that labels should list all of the 
countries but in no particular order. Another commenter recommended 
that the label should indicate the percentage of each country contained 
within the package (e.g., 65% country Y, 35% country X). Finally, one 
commenter expressed concern as to whether listing the countries 
alphabetically is acceptable under FDA and CBP regulations.

[[Page 59715]]

    Agency Response: The law requires all covered commodities to be 
labeled with country of origin information. As such, the use of ``mixed 
origin'' labels does not provide consumers with the required 
information and are therefore unacceptable. However, USDA is concerned 
about the burden imposed by the rule on facilities that produce a 
blended retail product. The proposed rule would have required such 
facilities to document that the origin of a product was separately 
tracked, while in their control, during production and packaging. The 
proposed rule also would have required that the labeling of all blended 
products specify precisely the countries of origin represented within 
each individually-packaged retail product. In this interim final rule, 
the provision to separately track the product has been removed, and the 
labeling requirements have been made consistent with other Federal 
legal requirements. Therefore, this interim final rule does not impose 
any additional burden with respect to the labeling of blended products 
for which labeling is also required under U.S. Customs and Border 
Protection legal requirements. For imported covered commodities that 
have not subsequently been substantially transformed in the United 
States that are commingled with other imported or U.S. origin covered 
commodities, the declaration shall indicate the countries of origin for 
all covered commodities in accordance with existing Federal legal 
requirements. For imported covered commodities that have subsequently 
undergone substantial transformation in the United States that are 
commingled with other imported covered commodities that have 
subsequently undergone substantial transformation in the United States 
(either prior to or following substantial transformation in the United 
States) and/or U.S. origin covered commodities, the declaration shall 
indicate the countries of origin contained therein or that may be 
contained therein.
Remotely Purchased Products
    Summary of Comments: Some commenters recommended that consumers be 
notified of a product's country of origin prior to the purchase being 
made. Other commenters recommended that the country of origin 
notification should be allowed to be made either on the sales vehicle 
or at the time the product is delivered to the consumer.
    Agency Response: The Agency believes that companies should be 
allowed flexibility in providing the notice of country of origin and 
method of production (wild and/or farm-raised). As such, under this 
interim final rule, companies can provide the required notification 
either on the sales vehicle or at the time the product is delivered to 
the consumer.

Markings

Section 60.300(a)
    Summary of Comments: Several commenters recommended that the method 
of production (wild and/or farm-raised) designation should be allowed 
to be made separately from the country of origin declaration. Another 
commenter requested flexibility in labeling commingled similar wild and 
farm-raised products. Several other commenters recommended that the 
Agency specifically allow the use of check boxes to convey both the 
country of origin and method of production (wild and/or farm-raised) 
information.
    Agency Response: The Agency believes that the law provides the same 
flexibility in providing the method of production (wild and/or farm-
raised) designation as it does the country of origin notification. As 
such, Sec.  60.300(a) has been modified to clarify that various forms 
of the method of production (wild and/or farm-raised) designation are 
permissible and that the country of origin declaration and method of 
production (wild and/or farm-raised) designation can be combined or 
made separately. In addition, Sec.  60.300(d) has been modified to 
clarify that a bulk container used at the retail level to present 
product to consumers may contain products comprised of both wild and 
farm-raised fish or shellfish provided all possible origins and/or 
method(s) of production are listed. In addition, Sec.  60.300(a) has 
been modified to clarify that products may contain both wild and farm-
fish provided the label identifies both methods of production. With 
respect to check boxes, the Agency has added language in Sec.  
60.300(a) to specifically authorize the use of check boxes as an 
acceptable method of notification.
Section 60.300(b)
    Summary of Comments: Several commenters recommended that the 
conspicuous location requirement should include any place on the 
package or product. Another commenter recommended that the preamble 
recognize that conspicuous may be provided in a broad number of ways, 
including signs adjacent to a bulk display, pin tags for seafood, etc.
    Agency Response: The Agency believes the current explanation of a 
conspicuous location as being likely to be read and understood by a 
customer under normal conditions of purchase is sufficient. In 
addition, the proposed rule adequately clarified that the country of 
origin and method of production (wild and/or farm-raised) declarations 
can be made in a multitude of ways (e.g., placard, sign, label, 
sticker, band, twist tie, etc.). However, the Agency will add pin tags 
as a specific example. Accordingly, these recommendations have been 
adopted in part.
Section 60.300(d)
    Summary of Comments: One commenter recommended 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. 
Another commenter requested that the words ``that a substantial amount 
of'' be inserted after the word provided. Another commenter expressed 
concern that requiring individual stickering may result in the 
elimination of bulk displays and in packaged products displacing fresh 
displays.
    Agency Response: The Agency has modified Sec.  60.300(d) such that 
a bulk container used at the retail level may contain a covered 
commodity from more than one origin and/or method of production 
provided that all possible origins and/or methods of production are 
listed. No additional changes have been made as a result of these 
comments.
Section 60.300(e)
    Summary of Comments: Several commenters recommended that the Agency 
define acceptable standard country abbreviations. One commenter 
recommended that the three letter format accepted by the International 
Olympic Committee be used while the other commenter expressed concern 
that if the International Organization for Standardization country 
codes were utilized, abbreviations for many of the countries exporting 
to the United States will not be recognized by consumers. Another 
commenter requested clarification on whether ``Brazilian product'' 
would be accepted as proper country of origin notification. Another 
commenter recommended that the language allowing the use of the 
adjectival form of the name of a country be modified to delete the 
reference to ``region/city'' since the Agency expressly prohibited the 
use of State or regional label designations in lieu of country of 
origin notification.
    Agency Response: The Agency believes that the language regarding 
abbreviations as proposed that allows abbreviations and variant 
spellings that

[[Page 59716]]

unmistakably indicate the country of origin is appropriate. This is the 
same language contained in U.S. Customs and Border Protection laws and 
regulations, which will minimize the burden on the industry by allowing 
them to continue to follow existing regulations. With respect to the 
clarification on the use of ``Brazilian product'' as country of origin 
notification, the adjectival form of the name of a country is 
specifically authorized as long as it does not refer to a kind or 
species of product (e.g., Brazil nuts). With respect to the commenter's 
recommendation to delete the reference to ``region/city,'' the Agency 
agrees with the commenter's recommendation and has deleted the 
reference to ``region/city.'' Accordingly, these recommendations have 
been adopted in part.
Section 60.300(f)
    Summary of Comments: Numerous commenters recommended that the 
Agency accept State and regional label designations in lieu of country 
of origin labeling.
    Agency Response: The Act specifically requires that all covered 
commodities be labeled with country of origin information. Thus, 
allowing State and regional label designations in lieu of country 
designations would not meet the requirements of the statute. 
Accordingly, this recommendation is not adopted.

Recordkeeping

General
    Summary of Comments: Several commenters recommended that the Agency 
list the specific records that it will use to determine the validity of 
origin claims. Other commenters recommended that the Agency cite the 
examples of records that can be used to substantiate origin and method 
of production (wild and/or farm-raised) claims that the Agency has 
posted on its website in the preamble of the final rule. Other 
commenters recommended that the Agency require no additional records 
beyond those mandated by the Tariff Act, PACA, and FDA. Several other 
commenters requested that the Agency provide guidance on what records 
could be used to substantiate method of production (wild and/or farm-
raised) claims for imported products and asked what AMS would require 
of foreign suppliers. Another commenter expressed concern that the 
preamble provides no explanation of the records that would be necessary 
to establish the chain of custody of a product. The commenter further 
contends that this requirement is higher than the standard set forth in 
FDA's recordkeeping authority under the Bioterrorism Act and suggested 
that it be deleted.
    Agency Response: With regard to identifying records that may be 
useful in verifying origin and method of production (wild and/or farm-
raised) claims, the Agency has included some examples of records in the 
regulation and additional examples will be included in the compliance 
guide. In addition Sec.  60.400(b)(4) has been modified to clarify the 
responsibilities of importers. With respect to using existing records 
mandated by the Tariff Act, PACA, and FDA to verify compliance with 
this regulation, it is not necessary that additional records be created 
to comply with this regulation to the extent that existing records 
contain the necessary information. With respect to establishing the 
chain of custody of a product, the Agency has deleted this language 
from this rule. The requirement in the interim final rule that retail 
suppliers maintain records to establish and identify the immediate 
previous source and immediate subsequent recipient of a covered 
commodity, in such a way that identifies the product unique to that 
transaction by means of a lot number or other unique identifier, is 
sufficient documentation to allow the Agency to track a product back 
through the marketing chain in order to verify compliance with this 
regulation.
Recordkeeping Retention
    Summary of Comments: The Agency received numerous comments 
regarding the recordkeeping retention requirement. The majority of 
commenters recommended a shorter record retention time for both 
retailers and suppliers. Specifically, most commenters recommended that 
a one-year record retention requirement for suppliers and for the 
centrally-located retail records. Several other commenters recommended 
alternate retention times including, for the reasonable life of the 
product (and that for most perishable items 30 days would be 
sufficient), six months for perishable items, and 90 days for both 
retailers and slaughter facilities. Other commenters suggested various 
recordkeeping retention requirements at the store level including, 
limiting it to the time that the products are located at the store, 
lengthening it to 30 days, reducing it to 2 days or eliminating it all 
together. Another commenter requested that the preamble include 
language specifying that the ``date the origin declaration was made at 
retail'' with respect to retaining the centrally located retail records 
that identify the retail supplier is the date that the product is 
received at the retail store. Another commenter expressed concern that 
it may be impossible for retailers to determine when the proposed 
recordkeeping retention requirement of 7 days after retail sale has 
elapsed. One commenter recommended that the regulations should 
expressly recognize that a document that identifies the country of 
origin and method of production (wild and/or farm-raised) of a covered 
commodity provided by the supplier that accompanies the product from 
the supplier all the way to the retail store would serve as an adequate 
record upon which the retailer could justifiably rely at the point of 
retail sale to establish a covered commodity's origin and method of 
production (wild and/or farm-raised). The commenter also recommended 
that pre-labeled products should not require additional documentation 
at the retail level as the label itself is the documentary evidence on 
which the retailer is relying.
    Agency Response: The Agency believes that a 1-year record retention 
requirement for suppliers and centrally located retail records as 
recommended by many of the commenters is appropriate. This requirement 
would be consistent with the recordkeeping retention time proposed by 
FDA under the Bioterrorism Act and would allow the Agency ample time to 
conduct enforcement reviews to verify compliance with this regulation. 
With respect to the recordkeeping retention requirement for store-level 
records, the Agency agrees with the commenters' recommendation that 
records only need to be available while the product is on hand. As one 
commenter pointed out, it would be difficult for the retail facility to 
determine when the 7 day time period after retail sale had elapsed. In 
addition, generally retail enforcement activities would not encompass 
products that have already been sold. With respect to a commenter's 
request to clarify that the date the origin declaration is made at 
retail is the date the product is received at the retail store, the 
Agency does not believe such a clarification is appropriate. In the 
case of nonperishable products, the retailer may receive products at 
the store that are not actually displayed for sale for some time. 
Accordingly, this recommendation is not adopted. With respect to the 
commenter's recommendation that pre-labeled products should not require 
any additional documentation at the retail level and that a document 
containing country of origin and method of

[[Page 59717]]

production (wild and/or farm-raised) information that accompanies the 
product through retail sale should be adequate documentation on which a 
retailer can rely, the Agency agrees and has modified Sec.  
60.400(b)(1) and Sec.  60.400(c)(1) accordingly.

Responsibilities of Suppliers and Retailers

    Summary of Comments: One commenter recommended that the final rule 
should clarify that only USDA has the authority to verify, audit, and 
administer the labeling program. Another commenter recommended that the 
Agency clarify that suppliers of covered seafood products must also 
separately track and document the method of production (wild and/or 
farm-raised). The commenter also recommended that the preamble should 
expressly state that suppliers such as wholesalers who simply 
distribute pre-packaged product are not required to document that the 
product was separately tracked. Another commenter recommended that 
importers be required to maintain adequate records to reconcile 
purchase, inventories, and sales of imported and domestic commodities. 
One commenter stated their belief that the safe harbor provision for 
retailers and intermediary suppliers does not have a specific statutory 
basis in the Act and expressed an interest in understanding the 
application of the PACA standard to claims required under the Act. The 
commenter also recommended that the safe harbor provision for retailers 
should also extend to misstatements of the method of production (wild 
and/or farm-raised). The commenter also requested that the preamble 
should articulate that retailers can accept information provided by 
suppliers without liability and without obligations to investigate the 
declarations or systems put in place to ensure the accuracy of 
declarations. Several commenters requested that the ``reasonable 
knowledge'' language contained in the safe harbor provision be deleted 
as the commenters contend it is difficult to determine what someone 
should have been reasonably expected to be known.
    Agency Response: With respect to clarifying that only USDA has the 
authority to verify, audit, and administer the labeling program, the 
Enforcement section of the preamble states that only USDA may initiate 
enforcement actions against a person found to be in violation of the 
law. Thus, the Agency believes no further clarification is necessary. 
With respect to clarifying that suppliers of covered seafood products 
must also separately track and document the method of production (wild 
and/or farm-raised), the Agency has deleted Sec.  60.400(b)(5) as it is 
duplicative and unnecessary given the requirement in the regulation 
that suppliers provide country of origin and method of production 
information for all covered commodities. No additional changes as a 
result of these comments have been made. With respect to the 
recommendation to require importers to maintain adequate records to 
reconcile purchases, inventories, and sales of imported and domestic 
commodities, the law does not provide the Agency with the authority to 
require such detailed information nor is such information necessary to 
substantiate origin and method of production claims. Accordingly, this 
recommendation is not adopted. With respect to the safe harbor 
provision, the Agency agrees with the commenters' recommendations to 
extend the safe harbor to misstatements of the method of production 
(wild and/or farm-raised) and has modified Sec.  60.400(b)(2) 
accordingly. With respect to the statutory basis for the ``safe 
harbor'' provision, the basis for providing regulatory protection for 
retailers in instances where they receive inaccurate COOL information 
and/or method of production (wild and/or farm-raised) information is 
based on the language contained in sections 253 and 283 of the Act. 
Section 283 speaks of specific enforcement procedures and penalties for 
retailers, while enforcement procedures and penalties as to other 
persons are found in section 253. Because the penalty as to retailers 
requires a willful violation, where a retailer acting in good faith 
relies on statements or records given by others, we do not believe it 
was Congress' intent to hold retailers responsible for violations when 
they relied upon false and/or inaccurate information provided by a 
supplier. However, the Agency believes the ``reasonable knowledge'' 
language is necessary as there are instances in which a retailer would 
likely have had knowledge that the country of origin information 
provided to them by the supplier was not correct and should be held 
accountable. For example, a retailer that receives fresh wild salmon 
from Alaska in January labeled as product of the U.S. should have known 
that such a declaration was inaccurate. With respect to the issue of 
retailers accepting information provided by suppliers without liability 
and without requiring third-party verification of the information, the 
Agency believes that because the penalty as to retailers specifically 
requires a willful violation and the final regulation contains a safe 
harbor provision, there is no additional language needed.

Use of Affidavits and Self-Certification

    Summary of Comments: In the proposed rule, the Agency invited 
comment on the practicality of requiring suppliers to provide an 
affidavit for each transaction to the immediate subsequent recipient 
certifying that the country of origin claims and, if applicable, 
designations of wild or farm-raised, being made are truthful and that 
the required records are being maintained. Numerous commenters 
recommended that such affidavits not be required as they believe it 
would be expensive, onerous, unnecessary, and does nothing to alleviate 
knowing violations of the law. Another commenter supported the use of 
affidavits as they believe it would provide a level of insurance that 
the retailer can rely on the information provided by the supplier. One 
commenter suggested that providing an affidavit with each transaction 
would be helpful, but legal requirements for such a legally binding 
document may vary by State. Numerous other commenters interpreted 
allowing the use of affidavits as allowing self-certification. These 
commenters recommended that suppliers should be allowed to self-certify 
the origin of their product.
    Agency Response: Self-certification documents or affidavits may 
play a role in assuring that auditable records are available throughout 
the marketing chain, but the auditable records must themselves also be 
available to ensure credibility of country of origin labeling claims. 
However, in view of the marketing practices of the fish and shellfish 
industries and the probable cost impacts, the Agency has concluded that 
requiring affidavits is not practicable or necessary.

Enforcement

    Summary of Comments: The Agency received numerous comments on the 
issue of enforcement. Several commenters recommended that the Agency 
incorporate a grace period in which enforcement of this regulation 
would be delayed and implement a program emphasizing compliance rather 
than enforcement for the first year. Numerous other commenters 
requested that the Agency clearly define the process of enforcement 
including recognizing the circumstances under which retailers will be 
considered to have willfully violated the statute. Several commenters 
suggested that

[[Page 59718]]

retailers should not be found in willful violation of the statute 
unless the retailer intentionally removed or changed the information 
provided by the supplier. Another commenter recommended that willful be 
defined as any act resulting in misinformation that was a deliberate 
and intentional act for the purpose of misstating the COOL label. 
Several other commenters recommended that the Agency should expressly 
recognize that if the majority of covered commodity items bear a label, 
the retailer has met their obligation. Several commenters requested 
additional information on the process the Agency will employ to fulfill 
the mandate to partner with States. Other commenters recommended that 
the Agency expressly prohibit third-party audits from being required of 
any party subject to this regulation. Another commenter expressed 
concern that the Agency does not define what type of information will 
be sufficient to withstand third-party audits which the commenter 
believes will lead to a lack of uniformity exposing all participants to 
unnecessary legal liability. Another commenter recommended that the 
final regulation clearly describe or at least reiterate the statutory 
standards for non-retailers. Another commenter recommended that AMS 
establish a sliding scale for penalties.
    Agency Response: Many of the covered commodities sold at retail are 
in a frozen or otherwise preserved state (i.e., not sold as ``fresh''). 
Thus, many of these products would already be in the chain of commerce 
prior to September 30, 2004, and the origin/production information may 
not be known. Accordingly, the effective date of this regulation is six 
months following the date of publication of this interim final rule. 
The requirements of this rule do not apply to frozen fish or shellfish 
caught or harvested before December 6, 2004. Further, AMS will focus 
its activities on industry education and outreach for an additional six 
months from the effective date of this interim final rule. This will 
allow a total of 12 months for AMS to conduct an industry education and 
outreach program concerning the provisions contained within this 
rulemaking. With respect to the issue of acts that will constitute 
``willful'' violations of this subpart, determinations will be made on 
a case by case basis. However, the Agency will take into consideration 
the facts and circumstances regarding the situation before initiating 
an enforcement action. In addition, the Agency will issue a compliance 
guide similar to the guide published by FDA in promulgating regulations 
under the Bioterrorism Act of 2002 to provide the industry with further 
information on compliance and enforcement. With respect to partnerships 
with States, following publication of the interim final rule, USDA will 
seek to enter into cooperative agreements with States that have 
existing infrastructure to conduct audits at the retail level. USDA 
will provide States with a schedule identifying the stores that should 
be audited and with what frequency, identify the products to be 
audited, and outline the audit procedures that will be followed. If a 
noncompliance is identified by the State, the State will notify USDA. 
USDA will then proceed with the appropriate enforcement action. With 
regard to third-party audits, the law does not require third-party 
audits of any party subject to these regulations. However, the law does 
not prohibit any party subject to this regulation from requiring a 
third-party audit of another party as part of their contractual 
arrangement if they so choose. With respect to penalties for non-
retailers, the Farm Bill incorporates by reference section 253 of the 
Act as applying to violations of this subpart by non-retailers. This 
section details the penalties that may be assessed as well as other 
enforcement mechanisms (e.g., cease and desist orders) and the 
administrative process that must be followed. Therefore, it is not 
necessary to fully restate the penalties for non-retailers. However, 
the Agency has added additional information regarding enforcement of 
non-retailers to the provisions regarding enforcement in the Highlights 
of the Interim Final Rule section. With respect to establishing a 
sliding scale for penalties, the Agency will determine the appropriate 
penalty on a case by case basis depending on the circumstances 
surrounding the violation.

Existing State Programs

    Summary of Comments: The Agency invited comment on the proposed 
rule as it relates to existing State programs. One commenter 
recommended that the Agency reiterate the conclusion that this 
regulation preempts State law. No comments from States were received on 
this issue.
    Agency Response: In the discussion on Executive Order 13132, 
Federalism, the Agency has added additional language clarifying that 
State programs that encompass commodities that are subject to this 
regulation are preempted.

Miscellaneous

    Summary of Comments: Numerous commenters recommended that mandatory 
COOL be repealed and replaced with a voluntary program and recommended 
that USDA seek administrative relief from Congress. Another commenter 
requested that USDA promulgate an interim final regulation instead of a 
final rule. Other commenters stated their belief that COOL is a 
nontariff trade barrier intended to discriminate against imported 
products and questioned whether this regulation is in conformance with 
various WTO agreements.
    Agency Response: The Agency could not implement a voluntary program 
without legislative changes. With respect to promulgating an interim 
final regulation, the Agency believes that because of the changes made 
as a result of comments received and the costs associated with this 
rule, additional public input should be obtained and is issuing this 
regulation as an interim final rule. However, the Agency is not making 
final provisions that concern other covered commodities at this time. 
With respect to the commenters' concern regarding WTO agreements, the 
Agency has considered these obligations throughout the rulemaking 
process and concludes that this regulation is consistent with these 
international obligations.

Preliminary Economic Impact Analysis (Executive Order 12866)

    Summary of Comments: A commenter stated that USDA did not consider 
any of its alternative approaches viable and that AMS failed to 
consider an array of obvious alternatives. The commenter suggested that 
AMS could reduce the recordkeeping requirement for retailers from 7 
days to 2 days at the point of sale and reduce the overall 
recordkeeping requirement from 2 years to 1 year. The commenter also 
suggested that AMS could consider using general rather than specific 
labels for products involving more than one country (e.g., ``mixed 
origin'').
    Agency Response: The proposed rule identified limited discretionary 
authority for alternative regulatory approaches, but alternative 
approaches were considered. The preliminary economic impact assessment 
considered alternative definitions of the term ``processed food item,'' 
which change the scope of commodities required to be labeled with 
country of origin and method of production (wild and/or farm-raised) 
information. This interim final rule includes a revised definition of a 
processed food item that leads to lower costs of implementation for the 
affected industries. The Agency also considered the impacts of the use 
of

[[Page 59719]]

affidavits to transmit country of origin information along the food 
production and marketing chain.
    The interim final rule reduces the recordkeeping burden at the 
retailer's point of sale from 7 days following retail sale of the 
product to the length of time the product is on hand. The interim final 
rule also reduces the recordkeeping burden for suppliers and retailers 
of covered commodities from 2 years to 1 year.
    The Agency disagrees that the law provides discretionary authority 
to use general rather than specific labels for products involving more 
than one country. The law requires a retailer of a covered commodity to 
inform consumers of the country of origin of a covered commodity. A 
label such as ``mixed origin'' does not fulfill this requirement 
because it provides no information regarding the country of origin of 
the commodity, other than the fact that the origin involves more than 
one country.
    Summary of Comments: A commenter observed that AMS argued in the 
proposed rule that if COOL was really desirable to consumers, the 
marketplace would provide the information on a voluntary basis. The 
commenter further noted that some retailers do label seafood as to its 
source. In addition, the commenter noted that such labeling is erratic 
and can be inconsistent, and said that seafood is far less likely to be 
labeled for foreign than domestic origin. On this basis, the commenter 
concluded that mandatory COOL requirements are essential.
    Agency Response: The Agency concluded in its preliminary economic 
impact assessment that there was no compelling market failure argument 
regarding the provision of country of origin information. This 
conclusion stemmed from a lack of evidence of barriers to private 
provision of voluntary COOL should consumer demand support the 
increased costs of such labeling. The fact that some retailers already 
label seafood as to its source indicates that market participants will 
provide country of origin information in response to market demand.
    Summary of Comments: A commenter stated that the preliminary 
economic impact analysis depended heavily on a study, Umberger, et al., 
concerning beef labeling. The commenter said that Umberger et al.'s and 
other analyses may not apply to seafood, which the commenter noted is 
far more likely than beef to be imported from other countries--and, 
unlike beef, comes from two distinct types of production systems (wild 
capture and fish farming).
    Agency Response: The Umberger, et al. study was referenced as one 
of the available studies on consumer response to country of origin 
labeling. The Agency agrees that there are differences in terms of 
consumer demand characteristics for beef versus seafood products. 
Therefore, the transfer of estimates from Umberger, et al. may be a 
source of uncertainty. Based on the numerous comments received on the 
issue, the Agency also concludes that wild capture versus farm-raised 
is an important distinction for many seafood consumers.
    Summary of Comments: A commenter said that when determining the 
actual value of COOL regulations, USDA needs to consider the importance 
of consumer education, small U.S. based producers and their inability 
to mount extensive lobbying campaigns, the importance of progressive 
regulations, and discouraging fraudulent information in the 
marketplace.
    Agency Response: The Agency agrees that consumer education will be 
vital to firms' abilities to derive benefits from mandatory COOL. While 
the Agency will make available to the public information about the 
requirements of this rule, industry will need to undertake any 
initiatives to educate consumers with an eye toward using COOL as a 
promotional tool. The Agency also recognizes the importance of 
discouraging fraudulent information in the marketplace, which underlies 
the rationale for much of this rule. That is, this rule is designed to 
ensure that mandatory country of origin claims made at retail are 
credible and verifiable back through the supply chain.
    Summary of Comments: A number of commenters expressed concern about 
USDA's preliminary analysis of benefits for the proposed rule, and many 
claimed that USDA failed to identify or acknowledge any benefits of the 
COOL law. One commenter noted results of a poll of 900 people conducted 
in January 2004--82 percent of respondents said that food should be 
labeled with country of origin information, 85 percent would be more 
inclined to buy food produced in U.S., and 81 percent said they would 
be willing to pay a few cents more for food products of U.S. origin. 
Another commenter reported results of a survey conducted by Fresh 
Trends in 2002, in which 86 percent of respondents favored the concept 
of COOL. This commenter also cited a study by North Carolina State 
University, in which 68 percent of respondents indicated willingness to 
pay more for U.S. food products. Another commenter said that there is 
little factual support for USDA's finding that there is ``little 
evidence that consumers are willing to pay a price premium for country 
of origin labeling.''
    Agency Response: In the preliminary economic impact analysis, the 
Agency did identify and acknowledge benefits from the proposed rule. 
The Agency noted that surveys show that a majority of consumers state 
at least some interest in knowing where their food was produced, and a 
smaller but significant number indicate a strong desire to know where 
their food was produced. The Agency also cited results of studies that 
found substantial degrees of willingness-to-pay for country of origin 
information by consumers. The comment period did not elicit additional 
evidence sufficient to change the Agency's conclusion that such 
professed interest in country of origin labels would result in 
increased demands or higher prices for U.S.-origin covered commodities.
    The January 2004 poll commissioned by the National Farmers Union 
reconfirms that consumers, when prompted, indicate an interest in 
country of origin information for food. The poll also indicates that 
respondents would be ``willing to pay a few cents more'' for food 
products grown and/or raised in the U.S. This poll does not overcome 
limitations of previous surveys and willingness-to-pay studies, namely, 
that there is little basis to support the notion that these prompted 
responses will carry over into actual purchasing behavior. No comments 
brought forth evidence that there are barriers to the voluntary 
provision of country of origin information by firms that produce and 
market the covered commodities. In addition, the Agency did not receive 
any information that indicated an increased demand for U.S.-origin 
products in States that currently require country of origin labeling 
for some of the covered commodities. Therefore, the Agency continues to 
conclude that in the presence of demand for U.S.-origin products, food 
companies would respond by sourcing such products and providing 
consumers with the information.
    Summary of Comments: One commenter believes there are a number of 
scenarios where consumer preference would shift to U.S. products, 
creating a one to five percent shift in consumer demand, thus 
recovering implementation costs of the proposed rule.
    Agency Response: This commenter did not specify the scenarios under 
which consumer preference would shift to U.S. products. Neither this 
commenter nor other commenters provided evidence sufficient to

[[Page 59720]]

conclude that there would be a shift in consumer demand for U.S.-origin 
products of one to five percent.
    Summary of Comments: One commenter stated that USDA needs to 
address the direct cost of administering this program and where the 
funds would come from (not from user fees).
    Agency Response: The Agency intends to use funds that may be 
appropriated for administration of this program. The Agency estimates 
the costs for a minimal level of enforcement to be $2.8 million per 
year. About five percent of covered retailers would be audited each 
year under this scenario.
    Summary of Comments: A commenter stated that the preliminary 
economic impact assessment is inadequate due to the broad range of 
implementation costs presented.
    Agency Response: In its preliminary economic impact assessment, the 
Agency estimated a range of direct, incremental costs to reflect 
uncertainty about steps that affected entities would need to take to 
implement the proposed rule. Comments on the voluntary country of 
origin labeling guidelines (67 FR 63367) and feedback that the Agency 
received through its outreach efforts during development of the 
proposed rule painted two very different pictures of the costs and 
difficulty of implementing mandatory COOL. One viewpoint suggested that 
implementation and operational costs would be relatively low and would 
consist of primarily additional recordkeeping costs. The other 
viewpoint suggested that implementation and operational costs would be 
relatively high and would consist of not only additional recordkeeping, 
but would entail substantial changes to operations, systems 
development, and capital expenditures. Thus, the Agency's estimated 
range of direct costs reflected the different viewpoints expressed 
about costs of implementing mandatory COOL.
    Taking into account comments received on the proposed rule, the 
Agency concludes in its interim final economic impact assessment that 
implementation costs will exceed the lower range estimates presented in 
the preliminary economic impact assessment published with the proposed 
rule. Affected firms and trade associations noted that implementation 
costs will involve costs and operational changes beyond recordkeeping 
practices alone. Therefore, in its interim final economic impact 
assessment, the Agency no longer presents a range of costs.
    Summary of Comments: A commenter said that the preliminary economic 
impact assessment is incomplete because it fails to explain in detail 
the components underlying each of the cost estimates. The commenter 
said that the analysis should have included cost estimate subcategories 
for each type of covered commodity.
    Agency Response: As described in the preliminary economic impact 
assessment, the Agency derived its direct, incremental cost estimates 
from publicly available sources of data and studies. These sources are 
fully referenced in the proposed rule. The Agency presented details 
about cost components to the extent that such information was provided 
in the available studies. Lack of available information precludes 
further sub-categorization of costs.
    Summary of Comments: One commenter stated that USDA's preliminary 
cost estimates do not take into account industry infrastructure and 
current labeling practices and do not consider existing regulations 
such as PACA. Similarly, another commenter stated that the preliminary 
regulatory impact assessment fails to net out the cost of complying 
with existing regulations such as the Tariff Act and PACA and does not 
take into account existing signage.
    Agency Response: The Agency's preliminary cost estimates did take 
into account existing industry infrastructure, labeling practices, and 
statutes such as PACA. The Agency sought to estimate the incremental 
cost of implementing the proposed rule. The Agency assumed that 
incremental changes would be made to affected firms' operations and 
recordkeeping systems to implement the requirements of the rule. The 
Agency's assumptions recognized the existence of existing Federal 
regulations such as those promulgated under PACA. PACA does not require 
that retailers provide country of origin information to consumers, or 
that producers, processors, dealers, and other industry participants 
provide country of origin information to their customers. Instead, PACA 
would require records to substantiate any transaction or product claim 
made by entities subject to PACA, such as a claim that a perishable 
agricultural commodity had a certain country of origin.
    PACA requires maintenance of records and firms subject to PACA have 
developed recordkeeping systems to comply with the requirements of 
PACA. The existence of such infrastructure and recordkeeping systems 
reduces the incremental costs of additional informational requirements, 
including mandatory COOL. The Agency's preliminary cost estimates 
reflected these existing conditions, which is one reason that per-unit 
costs were estimated generally to be less for perishable agricultural 
commodities than for other covered commodities not covered by PACA, its 
regulations, and recordkeeping requirements.
    Summary of Comments: A commenter noted that the preliminary 
economic impact assessment does not consider or discuss similar 
voluntary State labeling programs, such as the ``Buy California'' or 
``Go Texan'' programs.
    Agency Response: Voluntary State labeling programs have limited 
application to the analysis of the impacts of the rule. First and 
foremost, State labeling programs are voluntary, while this rule is 
mandatory. Under these types of voluntary State programs, there is no 
requirement for any firms to participate, and firms will not choose to 
participate unless it is in their economic interest to do so. Even when 
firms do participate in these types of voluntary State programs, they 
are not required to label everything that they sell. Conversely, this 
rule is mandatory, and retailers and their suppliers must adhere to the 
requirements of the rule for 100 percent of the sales of the covered 
commodities that must be labeled at retail. Second, these voluntary 
State programs do not have the same types of requirements for 
recordkeeping and tracking as contained in this mandatory rule. Third, 
State labeling programs such as ``Buy California'' and ``Go Texan'' 
generally involve a more comprehensive program of marketing and 
promotional tools beyond just labeling, while this mandatory rule 
addresses labeling but does not address marketing and promotional 
activities. For example, some State programs require certain minimum 
quality standards for participation in the program. Most State programs 
also include promotional and marketing activities by the State. Such 
voluntary quality standards and promotional activities imply different 
market effects compared to this rule, which addresses only labeling 
requirements.
    Summary of Comments: A commenter said that seafood labeling should 
not be costly because the National Oceanic and Atmospheric 
Administration (NOAA) already has recordkeeping requirements for 
fishing vessels that are pertinent to COOL.
    Agency Response: The Agency believes that costs for seafood 
producers (wild fish harvesters and fish farmers) will be relatively 
low. The Agency's interim final regulatory impact analysis estimates 
first-year implementation

[[Page 59721]]

costs for fish producers at $241 per producer. The difficulty, however, 
lies in passing the relevant information along through the food 
production and marketing chain so that credible and verifiable 
information is made available to consumers at retail. The additional 
costs throughout the production and marketing chain are not embodied in 
current NOAA recordkeeping requirements for fishing vessels.
    Summary of Comments: A commenter noted that potential costs include 
additional equipment for printing codes, significant computer 
programming, and complete label review and redesign.
    Agency Response: The Agency believes that these types of costs will 
be incurred to implement the rule. Both the preliminary upper-range 
cost estimates published with the proposed rule and the interim final 
economic impact assessment reflect these added costs.
    Summary of Comments: A commenter said that USDA's cost estimates 
are substantially understated because they fail to recognize complexity 
of the industry, and that USDA's upper-range cost estimates are too 
low.
    Agency Response: The Agency disagrees with this comment. The upper-
range estimates presented in the preliminary economic impact assessment 
sought to reflect the full range of direct, incremental costs that 
affected entities would incur during the first year of implementation. 
Likewise in this interim final rule, the Agency's cost estimates seek 
to reflect the full implementation costs that will be faced by 
industry.
    Summary of Comments: One commenter observed that the proposed rule 
will impact the canned seafood production process by requiring the 
segregation of both raw materials and frozen stock, requiring multiple 
lids, and requiring the processing line to be shut down to switch to 
another origin.
    Agency Response: Although canned seafood is exempt from the interim 
final rule, the Agency believes that these types of adjustments to 
operational procedures will be incurred by affected firms to comply 
with the rule. The estimated implementation costs presented in the 
interim final economic impact assessment reflect these types of costs.
    Summary of Comments: A commenter noted that about three-fourths of 
fish and shellfish consumed in the U.S. is imported and about one-
fourth is farmed-raised.
    Agency Response: The greater the potential number of countries of 
origin from which to source a given product, the more complicated will 
be the task of making, maintaining, and transferring country of origin 
claims as the product moves through the production and marketing chain. 
For example, a product that is sourced from only one country would 
require only one production line along with a sufficient recordkeeping 
trail. A product that is sourced from more than one country likely 
would require some type of segregation plan, additional storage, and 
perhaps additional production lines along with the requisite 
recordkeeping requirements. The fact that fish must also be labeled as 
wild caught or farm-raised represents another piece of information that 
must be maintained and transferred throughout the system.
    Summary of Comments: Several commenters noted the anticipated costs 
of the proposed rule for their businesses. For example, one grower-
cooperative estimated that costs for its growers alone would exceed 
$3.5 million. A grocery store chain noted that the proposed rule would 
cost its company $3.5 million per year.
    Agency Response: These comments confirm the Agency's conclusion 
that implementation of this regulation is a complex matter for the 
affected industries and that costs will be substantial for many 
affected entities. In these examples, the retailer estimate appears to 
be consistent with the upper range cost estimates presented in the 
preliminary economic impact assessment. The grower-cooperative estimate 
appears to be lower than the Agency's upper range cost estimate per 
pound, although the comment does not provide much detail about how the 
total was computed and whether the total includes both grower costs and 
intermediary costs.
    Summary of Comments: A seafood processor noted that it already 
includes country of origin information on all imported canned crabmeat 
as required by U.S. Customs and Border Protection, and said that to 
indicate whether it is wild or farm-raised will impose huge financial 
and administrative burden. This commenter stated that it already has a 
substantial amount of inventory of cans that will be unusable and to 
make design changes to the packaging will take about 1 year, and that 
it will not have time to implement by September 30, 2004.
    Agency Response: Canned seafood products are exempt from the 
interim final rule. Nevertheless, the Agency recognizes that labeling 
of wild versus farm-raised fish and fish products will entail 
additional costs, even in cases in which country of origin information 
is already maintained. In addition, many of the covered commodities 
sold at retail are in a frozen or otherwise preserved state (i.e., not 
sold as ``fresh''). Thus, many of these products would already be in 
the chain of commerce prior to September 30, 2004, and the origin/
production information may not be known. Accordingly, the effective 
date of this regulation is six months following the date of publication 
of this interim final rule. Further, AMS will focus its activities for 
the six months immediately following the effective date of this interim 
final rule on industry education and outreach. This will allow a total 
of 12 months for existing product to clear through the channels of 
commerce and for AMS to conduct an industry education and outreach 
program concerning the provisions contained within this rulemaking. 
Additionally, this will permit existing inventories of labels and 
packaging materials to be exhausted.
    Summary of Comments: A commenter observed that the preliminary 
economic impact analysis of costs on the fish and seafood sector derive 
from the findings of one study, namely Sparks/CBW. This commenter 
stated that in the proposed rule, USDA argues that the Sparks/CBW 
estimates are too low without providing detailed rationale.
    Agency Response: For fish and seafood producers, the Agency 
estimates costs per pound of $0.0025 per pound for a total of $19 
million, compared to the Sparks/CBW total estimate of $1 million. Fish 
harvesters and farmers already maintain many of the types of records 
sufficient to substantiate country of origin and wild caught versus 
farm-raised claims. For example, it is USDA's expectation that the 
information contained in records typically kept by fish and shellfish 
harvesters and farmers will provide the necessary information to 
substantiate these claims. These records include but are not limited to 
hatching records, site maps, feeding records, vessel records, a U.S. 
vessel identification number, spawning records, and import permits. 
Additional examples of the types of records that may be used to 
substantiate origin and method of production claims will appear in the 
compliance guide. However, the basis for arguing higher costs is that 
systems need to be implemented to ensure that this information is 
transferred from producers to the next buyers of their products, and 
that the information is maintained for the required amount of time. 
Currently, this type of information exchange does not necessarily take 
place. The Agency believes that its estimated first-year implementation 
costs of $241 per producer are within reason.

[[Page 59722]]

    In the case of fish and seafood intermediaries and retailers, the 
Agency adopted the upper range of the Sparks/CBW estimated costs per 
pound. However, the Agency estimated that greater total units of fish 
and seafood production would be affected by mandatory COOL. In the case 
of both intermediaries and retailers, the Agency's preliminary 
estimates for fish and seafood intermediaries included canned product, 
while the Sparks/CBW estimates included only fresh and frozen product. 
The Agency's revised estimates exclude canned product, as well as fish 
sticks, fish portions, and breaded shrimp, due to the change in the 
definition of a processed food item. In addition, Sparks/CBW estimated 
that one-third of fish and seafood products would move through retail, 
compared to the Agency's estimate that 41.4 percent of the domestic 
disappearance of the covered commodities would be sold through 
retailers covered by this rule. The Agency received no comments to 
refute its initial estimated share of production that would be sold 
through retailers covered by this rule, but the share estimates are 
revised to reflect the lower proportion of fish and shellfish consumed 
at home relative to other food products.
    Summary of Comments: A commenter observed that USDA did not provide 
a cost comparison for development of a compliance system with the new 
FDA recordkeeping requirement under the Bioterrorism Act.
    Agency Response: There are several reasons that the Agency did not 
take into consideration the requirements of the FDA rules being 
promulgated under the Bioterrorism Act. Of the rules proposed by FDA, 
only the rule relating to the establishment and maintenance of records 
likely would have much, if any, impact on firms' initiatives to comply 
with mandatory COOL. FDA's proposed rule on records maintenance is not 
yet final, and the Agency cannot anticipate how the final rule may 
differ from the proposed rule. Also, the covered commodities beef, 
pork, and lamb are exempt from the FDA rulemaking as the FDA rules do 
not cover food regulated exclusively by USDA. Finally, as with PACA's 
regulations and similar existing Federal rules, the FDA rules would not 
require that country of origin information be provided to consumers by 
retailers, or that firms' in the supply chain provide country of origin 
information.
    Summary of Comments: A commenter said that U.S. farmers will be 
required to absorb a majority of the costs, marginalizing any profits 
attributed to increased demand for U.S. commodities.
    Agency Response: The Agency assumes that in the longer run, higher 
costs will be passed onto consumers in the form of higher prices for 
the covered commodities. In the short run, however, increased costs 
incurred by intermediaries and retailers may lead to lower demand at 
the farm level. Lower market demand may in turn translate into lower 
farm-level prices for producers.
    Summary of Comments: Several commenters pointed out potential 
trade-restricting impacts of the proposed rule, especially for ground 
beef processing. One commenter noted that a meat grinder looking for 
product of least cost would tend to seek domestic U.S. product at the 
disadvantage of imported product. Another commenter stated that the 
increased cost of mandatory COOL will cause suppliers to cease selling 
to customers in the U.S, as the cost associated with multiple sources 
will force distributors to source from a single country. Another 
commenter said that mandatory COOL will restrict trade by restricting 
flexibility of ground beef processors.
    Agency Response: Both importers and domestic suppliers will be 
required to meet the requirements of the rule. In the long run, the 
Agency believes that firms will find efficient ways to comply with the 
requirements of the rule. Resulting small trade impacts as estimated by 
the Economic Research Service (ERS) computable general equilibrium 
(CGE) model stem from general increases in production costs for the 
covered commodities, rather than any provision of the rule.
    Summary of Comments: A number of commenters stated that mandatory 
COOL will restrict trade. One commenter said that COOL is a nontariff 
trade barrier intended to discriminate against imported products on the 
basis of nationality.
    Agency Response: As previously mentioned, both importers and 
domestic suppliers will be required to meet the requirements of the 
rule, which is meant to provide accurate information to consumers with 
respect to the country of origin and the method of production of the 
fish and shellfish products they purchase. The Agency estimates that 
exports of fish and shellfish will decline slightly and imports will 
increase slightly after 10 years of adjustment to the rule. This is a 
result of increased production costs for the covered fish and shellfish 
commodities regardless of origin, rather than any provision of the 
rule.
    Summary of Comments: A commenter noted that the proposed rule will 
make domestic seafood canners less competitive with foreign producers 
of low-priced imports by increasing production costs and complicating 
the production process. The commenter said that plants must regularly 
use herring that are caught in both the U.S. and Canada to provide 
enough supplies, and that the rule will make processing sardines in 
Maine less competitive.
    Agency Response: Because the interim final rule does not require 
labeling of canned fish and seafood products, these concerns have been 
addressed.
    Summary of Comments: A commenter stated that mandatory COOL will 
add costs and reduce the abilities of U.S. industries to compete in 
international markets.
    Agency Response: The Agency agrees that mandatory country of origin 
labeling will add costs to the covered commodities. The Agency assumes 
that producers and processors of the covered commodities will seek to 
maintain flexibility in marketing decisions. Thus, the Agency assumes 
that producers and processors will incur recordkeeping and associated 
operational costs to make and substantiate country of origin claims for 
most, if not all, of their production even though most of the product 
ultimately will enter channels of distribution not covered by this 
rule. Higher costs will be passed forward in the form of higher prices, 
with the result that U.S. exports of the covered commodities are 
expected to decline slightly after 10 years of adjustment to the rule.
    Summary of Comments: A commenter observed that implementation of 
mandatory COOL will add costs and complexities to all covered 
commodities regardless of where they are marketed.
    Agency Response: The Agency agrees that mandatory COOL will add 
costs and complexities to the covered commodities regardless of where 
the products ultimately are marketed. First, the Agency expects that 
producers and intermediaries will seek to keep their marketing options 
flexible, and thus will take the steps necessary to implement COOL to 
allow their products to be labeled and sold at retail establishments 
covered by this rule. Second, covered commodities for which there is no 
verifiable country of origin information will no longer be fully 
fungible. That is, these products will not be able to be sold at retail 
establishments covered by this rule. These products will need to be 
segregated in the production and marketing chain, resulting in reduced 
system wide efficiency and higher costs.

[[Page 59723]]

Preliminary Regulatory Flexibility Analysis

    Summary of Comments: A commenter said that recordkeeping and other 
costs of compliance will fall disproportionately on smaller, 
independent farmers. Another commenter noted that the position of 
small, independent farmers may be weakened.
    Agency Response: In the initial regulatory flexibility analysis, 
the Agency noted that costs of implementation may be proportionately 
higher for smaller versus larger firms given the potential scale 
economies associated with the operation of systems to comply with the 
requirements of mandatory country of origin labeling. In particular, 
larger firms would have the ability to spread fixed costs of 
implementation over a greater number of units of production, thereby 
incurring lower average costs per unit. Conversely, smaller farmers and 
other firms may have some implementation cost advantages over larger 
firms. Smaller farms and firms likely have simpler recordkeeping 
systems, and thus would incur lower development costs relative to 
larger firms. The rule does not prescribe a particular recordkeeping 
system; so for example, a small fishing operation likely would be able 
to maintain records in hardcopy form rather than developing a 
complicated electronic recordkeeping system.
    Summary of Comments: A commenter stated that USDA's suggestion that 
a supplier could market covered commodities to other channels 
illustrates that mandatory COOL is an attempt to affect some supplier 
market preference with a discriminatory effect against the supermarket 
industry.
    Agency Response: The intent of mandatory COOL is not to 
discriminate against the retailers subject to the law and the rule. 
Nonetheless, some retailers are required to provide country of origin 
information for the covered commodities, while foodservice 
establishments and other retailers not subject to the rule are not 
required to provide such information. The Agency's suggestion makes the 
point that producers and intermediaries could seek regulatory relief by 
selling their products through alternative marketing channels. As 
explained in the economic impact assessment, however, the Agency 
assumes that producers and intermediaries will seek to provide country 
of origin information for virtually all of their production so as to 
maintain maximum marketing flexibility.
    Summary of Comments: A commenter said that requiring only PACA-
licensed retailers to label may provide economic incentive for 
retailers not to be PACA licensed. Another commenter said that the 
exclusion of fish markets creates an un-level playing field.
    Agency Response: PACA licensing is mandatory for retailers that 
purchase perishable agricultural commodities with an invoice value in 
excess of $230,000 in a calendar year at retail. Adoption of this 
definition will assure that the vast majority of covered commodities 
will be subject to this rule without unduly burdening small businesses.
    Fish markets and other retailers not subject to mandatory COOL may 
have a cost advantage over retailers subject to the rule, but the law 
defines explicitly which retailers are required to provide country of 
origin information.
    Summary of Comments: A commenter said that the preliminary 
regulatory flexibility analysis is inadequate as the proposed 
alternatives will not decrease the burden on small entities. Another 
commenter said that AMS should further study its economic analysis and 
consider alternatives to minimize impacts on small entities.
    Agency Response: The Agency's initial regulatory flexibility 
analysis examined potential viable alternatives for small entities, but 
found relatively little discretionary authority to provide additional 
regulatory relief. This interim final rule decreases the length of time 
that records are required to be kept, providing some relief to affected 
entities both large and small. The number of products required to be 
labeled is reduced because the definition of a processed food item has 
been broadened, thus providing additional regulatory relief. The Agency 
will prepare a compliance guide to assist firms, both small and large, 
to comply with the requirements of the rule.
    Summary of Comments: A commenter said that it is not reasonable for 
market participants to sell their products through other channels not 
subject to the proposed rule.
    Agency Response: The Agency assumes that most entities will seek to 
maintain maximum marketing flexibility by complying with the 
requirements of this rule. Nonetheless, the Agency disagrees with the 
assertion that it would not be reasonable for some market participants 
to sell their products through channels other than retailers expressly 
required to provide country of origin information. As detailed in the 
economic impact assessment, the Agency estimates that 58 percent of 
fresh and frozen fish and 38 percent of shellfish are eaten at home, 
and that 65.8 percent of that at-home consumption of the covered 
commodities would be sold by retailers subject to the rule. Hence, most 
of the domestic market (62 percent for fish and 75 percent for 
shellfish) does not require country of origin information for the 
covered commodities, which includes retailers not subject to the rule 
and foodservice establishments. In addition, fish and shellfish defined 
as ingredients in a processed food item and export sales are not 
subject to the requirements of this rule.
    Summary of Comments: A commenter said that the notion is flawed 
that the proposed rule offers flexibility because it is a performance 
standard rather than a design standard.
    Agency Response: The Agency's conclusion is based on the notion 
that each firm will be able to develop its own least-cost solution for 
complying with the rule, rather than having to meet a rigid design 
standard. This continues to be the case in this interim final rule, and 
the Agency continues to conclude that the performance standards of the 
rule allow firms to comply in the most cost effective way for their 
operations. Nonetheless, retailers, processors, and other affected 
firms may develop differing requirements for their suppliers. The 
Agency will issue a compliance guide to assist market participants in 
complying with the requirements of the rule.
    Summary of Comments: A commenter questioned the assertion in the 
preliminary regulatory flexibility analysis that number of affected 
small entities is significantly reduced by the PACA definition of 
retailer.
    Agency Response: The Agency disagrees with this comment. As 
detailed in the preliminary regulatory flexibility analysis, there were 
67,916 food stores, warehouse clubs, and superstores operated the 
entire year according to the 1997 Economic Census, and 66,868 of these 
firms are small. Based on PACA data, the Agency estimates that 4,512 
retailers would be subject to this rule, with 3,464 of these being 
small. Thus, 63,404 smaller retailers, or 94.8 percent of all small 
food store retailers would not be affected. These are estimates of the 
number of firms and not the number of establishments. The Small 
Business Administration defines size standards based on the size of the 
business or firm, not the size of the establishments operated by the 
firm.
    The Agency recognizes that all producers and intermediaries 
choosing to sell through marketing channels supplying the covered 
retailers would

[[Page 59724]]

need to meet the requirements of the rule. The Agency did not assert 
that the number of small entities in these sectors would be reduced by 
the definition of a retailer. As noted previously, however, the 
majority of the sales of the covered commodities are through channels 
not affected by this rule, which provides substantial marketing 
opportunities for product without verifiable country of origin claims.
    Summary of Comments: A commenter questioned the Agency's conclusion 
that costs for producers will be limited and will generally include 
costs involved in establishing and maintaining a recordkeeping system.
    Agency Response: In its preliminary regulatory impact analysis, the 
Agency estimated a range of implementation costs. The lower-range 
estimates reflected the costs of implementing and maintaining a 
recordkeeping system. The upper-range costs reflected additional 
operational costs that would be incurred to comply with the rule. In 
the preliminary analysis, the Agency concluded that direct incremental 
costs likely would fall in the middle to upper end of the estimated 
range. In the interim final regulatory impact analysis, the Agency 
presents a single cost estimate to reflect its conclusion that costs 
for affected entities will be higher than the preliminary lower-range 
costs for recordkeeping activities alone.
    Summary of Comments: A commenter said that the Agency should expand 
its analysis to take into consideration that the rule will likely 
impact all entities along the supply chain, not just those PACA 
licensed retailers.
    Agency Response: The Agency's initial regulatory impact and 
regulatory flexibility analyses considered all potentially affected 
firms, from producer through intermediaries through retailers subject 
to this rule.
    Summary of Comments: A commenter stated that the flexibility 
provided is not particularly helpful to small entities.
    Agency Response: The Agency has provided as much regulatory relief 
for small entities as possible, within the limits of the discretionary 
authority provided by the law. The requirements of the rule flow from 
the law that requires retailers to inform consumers of the country of 
origin of the covered commodities. Information must flow throughout the 
supply chain to enable retailers to provide the required information to 
consumers, regardless of the size of the businesses participating in 
the supply chain. To ensure compliance and integrity of the program, 
the Agency has determined that these claims must be supported by a 
recordkeeping trail that can be audited.
    Summary of Comments: A commenter noted that the Small Business 
Regulatory Enforcement Fairness Act requires publication of a 
compliance guide that explains the rule, provides compliance scenarios 
to illustrate and clarify any complexities, lessens small businesses' 
anxiety about complying with the rule, and provides suggestions on how 
to structure data collection and recordkeeping systems.
    Agency Response: The Agency will develop a compliance guide to 
assist firms in complying with the rule.

Preliminary Paperwork Reduction Act

    Summary of Comments: A commenter stated that wholesalers will have 
to develop new recordkeeping systems and that substantial labor costs 
will be incurred because wholesalers are responsible for tracking the 
identity of both the prior seller and the subsequent buyer.
    Agency Response: In the proposed rule, the Agency estimated the 
initial costs associated with recordkeeping, which includes the costs 
of maintaining country of origin information of the covered commodities 
purchased and subsequently furnishing that information to the next 
participant in the supply chain. For products that are not pre-labeled, 
this action would require adding information to a firm's bills of 
lading, invoices, or other records associated with movement of covered 
commodities from purchase to sale. The Agency believes that most 
wholesalers already have functioning recordkeeping systems and will 
require only modification of existing recordkeeping systems rather than 
the development of new systems. The Label Cost Model developed for FDA 
is used to estimate the cost of including additional country of origin 
information to an operation's records. The costs of labor in 
establishing and maintaining these records are included in these cost 
estimates. The Agency concludes that these costs will be substantial 
and will involve substantial labor costs.
    Summary of Comments: A commenter strongly disagrees with the 
assumption that the recordkeeping for retailers and others will be 
accomplished primarily by electronic means. According to the 
commenter's survey, 75 percent of retailers and wholesalers would have 
to keep manual records.
    Agency Response: The Agency has made a number of visits to retailer 
and wholesaler facilities. Retailers covered by this rule must meet the 
definition of a retailer as defined by PACA. The PACA definition of a 
retailer includes only those retailers handling fresh and frozen fruits 
and vegetables with an invoice value of at least $230,000 annually. 
Most small food store firms, which may keep manual records, have been 
excluded from mandatory COOL based on the PACA definition of a 
retailer. The Agency believes that most wholesalers and retailers 
covered by mandatory COOL already have established electronic 
recordkeeping systems and will only require the modification of 
existing recordkeeping systems rather than the development of new 
systems. Conceptually, the task of modifying a paper-based 
recordkeeping system is no different than the task of modifying an 
electronic recordkeeping system. Therefore, the Agency believes that 
its estimation represents a reasonable approximation of the variety of 
solutions that firms will undertake to comply with the rule.
    Summary of Comments: A commenter said that if USDA is using the 
``FDA one pager'' as a model, USDA should make it public and publish it 
in the Federal Register.
    Agency Response: A more complete discussion of the Label Cost Model 
is available in the FDA proposed rule on ``Establishment and 
Maintenance of Records Under the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002'' (68 FR 25187).
    Summary of Comments: A commenter noted that USDA uses contradictory 
assumptions--on the one hand USDA says industry will do electronic 
recordkeeping and on the other it bases cost estimates on a paper-based 
system.
    Agency Response: As noted previously, the Agency believes that the 
task of modifying a recordkeeping system is similar conceptually 
regardless of whether the system is electronic or paper based. 
Therefore, the Agency believes that its approach to estimating costs 
adequately represents the variety of recordkeeping systems currently in 
place.
    Summary of Comments: A commenter said that USDA has wrongly 
decreased the estimated recordkeeping costs for intermediaries like 
wholesalers (from the recordkeeping burden estimated for the voluntary 
guidelines).
    Agency Response: In response to the estimated PRA burden published 
for the voluntary country of origin labeling guidelines, the Agency 
received numerous comments on its estimated costs and the number of 
enterprises impacted by the guidelines. As a result, the Agency 
carefully reconsidered its estimates in preparing the preliminary 
paperwork burden estimate for the proposed rule. As a result of these

[[Page 59725]]

revisions, the Agency has refined its estimates of the numbers of 
affected entities and the costs per entity. In addition, a further 
improvement from the voluntary country of origin recordkeeping cost 
estimates is the use of Bureau of Labor Statistics wage rates for tasks 
required by producers, distributors, handlers, packers, processors, 
wholesalers, and retailers for recordkeeping. Similarly, a more 
appropriate estimate is added to the wage rate to account for total 
benefits. All of this resulted in the reduction of the total estimated 
recordkeeping costs under mandatory COOL in comparison to the voluntary 
guidelines, and the Agency believes this is a more accurate assessment.
    Summary of Comments: A commenter said that the assumed 
administrative hourly rate of $16.05 ignores supervisory, professional, 
and management time required at the wholesale and retail level. This 
commenter further stated that if overhead costs are to equate fringe 
benefits, the rate should be 30-35 percent, not 25 percent.
    Agency Response: The Agency believes that the administrative 
support occupations category represents a reasonable composite of the 
labor skills that will be involved in recordkeeping activities for 
wholesalers and retailers. The Agency believes these responsibilities 
would be assumed under the current supervisory and management 
structure. For handlers, processors, wholesalers, and other 
intermediaries as well as retailers the Agency believes the maintenance 
activities for recordkeeping will include inputting, tracking, and 
storing country of origin information for each covered commodity. While 
the Agency acknowledges that supervisory and management input will be 
required, the Agency also notes that some labor will be supplied by 
workers receiving lower wages. In some of our visits to retailers, it 
was indicated that these firms were employing more high school and 
college students than in the past to reduce their costs.
    Bureau of Labor Statistics (BLS) data are used for both the wage 
and for overhead costs (which include social security, unemployment 
insurance, workers compensation, and other benefits). In this interim 
final rule, the wage rates and fringe benefits rate are both updated to 
2002 BLS figures, which results in increased wage rates and benefits. 
The Agency believes this is the most accurate and documented estimate 
of wages and additional employer paid benefits.
    Summary of Comments: A commenter said that USDA has underestimated 
the number of hours needed for recordkeeping, noting that one hour per 
week for wholesalers is too low because it will take more than one hour 
per day. This commenter also stated that one hour per day for retailers 
is also too low.
    Agency Response: For fish and seafood wholesalers, the Agency 
estimates the maintenance burden for country of origin recordkeeping to 
be 52 hours per year per establishment, or one hour per week. The 
Agency recognizes that some of these wholesalers may require more than 
one hour a week to maintain country of origin information. However, a 
number of smaller wholesalers and those that do not operate 
continuously throughout the year will likely require less than an 
average of one hour per week. Therefore, the Agency believes an average 
of one hour per week per establishment is a reasonable estimate for 
these wholesalers. In the case of general line grocery wholesalers, the 
Agency reduced the maintenance burden from 52 to 12 hours annually per 
establishment because fish and shellfish represent only a portion of 
the commodities handled by these establishments.
    Taking into account Agency reviews of retailers' operations, the 
Agency believes that an additional hour of recordkeeping activities for 
country of origin information will be incurred daily at each retail 
establishment. The Agency's estimate of one hour per day for retailers 
is only for the maintenance portion of the recordkeeping of country of 
origin information. Maintenance activities will include inputting, 
tracking, and storing country of origin information for each covered 
commodity.
    In summary, this interim final rule adopts the fish and shellfish 
provissions of the October 30, 2003 (68 FR 61944), proposed rule with 
the changes discussed herein and with other changes made for purposes 
of clarity and accuracy.

III. Impact Analysis

Executive Order 12866--Interim Final Regulatory Impact Analysis

    USDA has examined the economic impact of this interim final rule as 
required by Executive Order 12866. In its Preliminary Regulatory Impact 
Assessment (PRIA), USDA determined that the regulatory action was 
economically significant, as it was likely to result in a rule that 
would have an annual effect on the economy of $100 million or more. 
Although the estimated annual effect on the economy of this interim 
final rule for fish and shellfish is less than $100 million, it remains 
an economically significant regulatory action because it would 
adversely affect in a material way a sector of the economy and 
therefore has been reviewed by the Office of Management and Budget 
(OMB). Executive Order 12866 requires that a regulatory benefit-cost 
analysis be performed on all economically significant regulatory 
actions.
    This interim final regulatory impact assessment reflects revisions 
to the PRIA (68 FR 61952). Revisions to the PRIA were made as a result 
of changes to this rule relative to the proposed rule, in responses to 
comments on the PRIA itself, and as a result of narrowing the scope of 
covered commodities affected by the rule. Specifically, this interim 
final rule defines covered commodities as farm-raised and wild fish and 
shellfish.
    The Comments and Responses section lists the comments received on 
the PRIA and provides the Agency's responses to the comments. Where 
substantially unchanged, results of the PRIA are summarized herein, and 
revisions are described in detail. Interested readers are referred to 
the text of the PRIA for a more comprehensive discussion of the 
assumptions, data, methods, and results.

Summary of the Economic Analysis

    The estimated incremental benefits associated with this interim 
final rule are difficult to quantify, but current information indicates 
that they are not likely to be large. The estimated first-year 
incremental costs for fish and shellfish harvesters, producers, 
processors, wholesalers, and retailers are $89 million. Maintenance 
costs beyond the first year are expected to be lower than the combined 
start up and maintenance costs required in the first year. The 
estimated cost to the U.S. economy in higher food prices and reduced 
food production (deadweight loss) in the tenth year after 
implementation of the rule is $6.2 million, or about two cents per 
person annually based on the current U.S. population. In other words, 
the U.S. economy would be worse off after implementing this rule.
    Note that this analysis addresses implementation of labeling 
requirements for fish and shellfish destined for human consumption 
only. Note also that this analysis does not quantify certain costs of 
the interim final rule such as the cost of the rule after the first 
year, or the cost of any supply disruptions or any other ``lead-time'' 
issues. Except for the

[[Page 59726]]

recordkeeping requirements, there is insufficient information to 
distinguish between first year start up and maintenance costs versus 
ongoing maintenance costs for this interim final rule.
    USDA finds little evidence that consumers are willing to pay a 
price premium for country of origin labeling. USDA also finds little 
evidence that consumers are likely to increase their purchase of food 
items bearing the U.S. origin label as a result of this rulemaking. 
Current evidence does not suggest that U.S. producers will receive 
sufficiently higher prices for U.S.-labeled products to cover the 
labeling, recordkeeping, and other related costs. The lack of 
participation in voluntary programs for labeling products of U.S. 
origin provides evidence that consumers currently are unwilling to pay 
price premiums sufficient to recoup the costs of labeling.

Statement of Need

    Justification for this interim final rule remains unchanged from 
the PRIA. This rule is the direct result of statutory obligations to 
implement the COOL provisions of the Farm Bill, which amended the Act 
by adding Subtitle D--Country of Origin Labeling. There are no 
alternatives to Federal regulatory intervention for implementing this 
statutory directive.
    The country of origin labeling provisions of the Farm Bill change 
current Federal labeling requirements for muscle cuts of beef, pork, 
and lamb; ground beef, ground pork, and ground lamb; farm-raised fish; 
wild fish; perishable agricultural commodities; and peanuts (hereafter, 
covered commodities). Under current Federal laws and regulations, COOL 
is not universally required for covered commodities. Provisions 
concerning labeling requirements for farm-raised and wild fish are 
provided herein. Labeling requirements for the remaining covered 
commodities become effective on September 30, 2006. Therefore, this 
rule and economic impact analysis address requirements and impacts for 
farm-raised and wild fish and shellfish only.
    As described in the PRIA, the conclusion remains that there does 
not appear to be a compelling market failure argument regarding the 
provision of country of origin information. Comments received on the 
PRIA elicited no evidence of significant barriers to the provision of 
this information other than private costs to firms in the supply chain 
and low expected returns. Thus, market mechanisms likely would lead to 
the provision of the optimal level of country of origin information.

Alternative Approaches

    The PRIA noted that many aspects of the mandatory COOL provisions 
of Pub. L. 107-171 are prescriptive and provide little regulatory 
discretion for this rulemaking. Some commenters suggested that USDA 
explore more opportunities for less costly regulatory alternatives. 
Specific suggestions focused on methods for identifying country of 
origin, recordkeeping requirements, and the scope of products required 
to be labeled.
    A number of comments on the PRIA suggested that USDA adopt a 
``presumption of U.S. origin'' standard for identifying commodities of 
U.S. origin. Under this standard, only imported covered commodities 
would be required to be identified and tracked according to their 
respective countries of origin. Any covered commodity not so identified 
would then be considered by presumption to be of U.S. origin. A 
presumption of origin standard would require mandatory identification 
of products not of U.S. origin. The law, however, specifically 
prohibits USDA from using a mandatory identification system to verify 
the country of origin of a covered commodity. In addition, as discussed 
in the proposed rule (68 FR 61944), the Agency does not believe that a 
presumption of U.S. origin standard provides a means of providing 
country of origin information that is credible and can be verified. 
Comments on the proposed rule did not identify how to overcome these 
obstacles. Thus, a presumption of U.S. origin standard is not a viable 
alternative.
    A number of commenters suggested that USDA reduce the recordkeeping 
burden for the rule. In this interim final rule, the recordkeeping 
retention period for retailers is reduced from 7 days following the 
retail sale of the product to the length of time the product is on 
hand. In addition, the overall recordkeeping retention period for 
retailers and suppliers is reduced from 2 years to 1 year.
    The interim final rule also ``streamlines'' the required 
recordkeeping for items that are pre-labeled (i.e., labeled by the 
manufacturer/first handler) with the required country of origin and 
method of production (wild and/or farm raised) information. Records 
that demonstrate the chain of custody (immediate previous source and/or 
subsequent recipient, as applicable) for all covered items must be 
maintained, but the underlying records (e.g., invoices, bills of 
lading, production and sales records, etc.) do not need to identify the 
country of origin and method of production (wild and/or farm-raised) of 
these pre-labeled products. For example, if a processor labels the 
country of origin and method of production on a package of salmon 
steaks, and the salmon steaks ultimately are sold in that package at 
retail, then that label may serve as sufficient evidence on which the 
retailer may rely to establish the product's origin and method of 
production. Thus, the retailer's records would not need to show country 
of origin and method of production information for that package of 
salmon, but the retailer's records would need to include information to 
allow the source of those salmon steaks to be tracked back through the 
system to allow the country of origin and method of production claims 
to be verified at the point in the system at which the claims were 
initiated. Under the proposed rule, the retailer would have also have 
been required to identify the country of origin and method of 
production of the package of salmon within its recordkeeping system; 
the information provided on the package itself would not have been 
sufficient. This change in recordkeeping requirements should lessen the 
number of changes that entities in the distribution chain need to make 
to their recordkeeping systems and should lessen the amount of data 
entry that is required.
    The interim final rule changes the definition of a processed food 
item such that a greater number of products are now exempt from country 
of origin labeling requirements. The fewer the number of products that 
must be labeled, the lower are implementation and maintenance costs for 
many affected entities.

Analysis of Benefits and Costs

    As in the PRIA, the baseline for this analysis is the present state 
of the affected industries absent mandatory COOL. USDA recognizes that 
some affected firms have already begun to implement changes in their 
operations to accommodate the law and the expected requirements of this 
interim final rule.
    Benefits: The expected benefits from implementation of this rule 
are difficult to quantify. The Agency's conclusion remains unchanged, 
which is that the estimated economic benefits will be small and will 
accrue mainly to those consumers who desire country of origin and 
method of production information. There clearly is some level of 
interest by consumers in the country of origin of food. In addition, 
the Agency received numerous comments expressing an

[[Page 59727]]

interest in labeling of fish and shellfish as wild or farm-raised. The 
rule will provide benefits to these consumers. However, commenters 
provided no additional substantive evidence to alter the Agency's 
conclusion that the measurable economic benefits of mandatory COOL will 
not be large. Additional information and studies cited by commenters 
were of the same type identified in the PRIA--namely, consumer surveys 
and willingness-to-pay studies. The Agency does not believe that these 
types of studies provide a sufficient basis to estimate the 
quantitative benefits, if any, of COOL.
    A number of commenters pointed to recent food safety incidents, 
suggesting that mandatory COOL would provide food safety benefits to 
consumers. As discussed in the PRIA, mandatory COOL does not address 
food safety issues. Appropriate preventative measures and effective 
mechanisms to recall products in the event of contamination incidents 
are more comprehensive means of protecting the health of the entire 
consuming public regardless of the form in which a product is consumed 
or where it is purchased. In addition, foods imported into the U.S. 
must meet food safety standards equivalent to those required of 
products produced domestically.
    Costs: To estimate the costs of this rule, we employed a two-
pronged approach. First, we estimated implementation costs for firms in 
the industries directly affected by the rule. The implementation costs 
on directly affected firms represent increases in capital, labor, and 
other input costs that firms will incur to comply with the requirements 
of the rule. These costs are expenses that these particular firms must 
incur, but are not necessarily costs to the U.S. economy as measured by 
the value of goods and services that are produced. We then applied the 
implementation cost estimates to a general equilibrium model to 
estimate overall impacts on the U.S. economy after a 10-year period of 
economic adjustment. The model provides a means to estimate the change 
in overall consumer purchasing power after the economy has adjusted to 
the requirements of the rule.
    Details of the data, sources, and methods underlying the cost 
estimates are provided in the PRIA. This section provides the interim 
final cost estimates and describes revisions made to the PRIA.
    In the PRIA, we developed a range of estimated implementation costs 
to reflect the likely range of first-year costs for directly affected 
firms to comply with the proposed rule. The lower range of incremental 
cost estimates reflected the costs to modify and maintain current 
recordkeeping systems, while the upper range of estimates reflected 
other capital and operational costs to comply with the proposed rule. 
We concluded in the PRIA that costs likely would fall in the middle to 
upper end of the range of estimated costs. Taking into account comments 
received on the proposed rule and the PRIA, this interim final 
regulatory impact assessment presents only a single set of estimates 
for anticipated costs. Comments representing affected entities clearly 
described that compliance with the rule would require changes beyond 
recordkeeping alone. Thus, the revised incremental cost estimates 
reflect not only additional recordkeeping costs, but also additional 
payments by the directly affected firms for capital, labor, and other 
expenses that will be incurred as a result of operational changes to 
comply with the rule.
    First-year incremental costs for directly affected firms are 
estimated at $89 million. The large change relative to the estimate of 
$3.9 billion for the proposed rule is attributable to the fact that 
this interim final rule covers only fish and shellfish. Costs per firm 
are estimated at $241 for fish and shellfish harvesters and producers, 
$1,890 for intermediaries (such as handlers, importers, processors, and 
wholesalers), and $12,600 for retailers.
    To estimate the overall impacts of the higher costs of production 
resulting from the interim final rule, we used a model of the entire 
U.S. economy. We adjusted the model by imposing the estimated 
implementation costs on the directly impacted segments of the economy 
in a computable general equilibrium model developed by the Economic 
Research Service (ERS). The model estimates changes in prices, 
production, exports, and imports as the directly impacted industries 
adjust to higher costs of production over the longer run (namely, 10 
years). Because the model covers the whole U.S. economy, it also 
estimates how other segments of the economy adjust to changes emanating 
from the directly affected segments and the resulting change in overall 
productivity of the economy.
    This general equilibrium analysis is developed from the standpoint 
that only farm-raised and wild fish and shellfish products will be 
directly affected by the interim final rule. Implementation and 
economic costs for the other covered commodities are not included in 
this analysis. Thus, this analysis illustrates the relative scale of 
the overall impacts of this rule on the U.S. economy, but does not 
represent the impacts of mandatory COOL requirements for all covered 
commodities.
    Note that a general equilibrium analysis differs from a partial 
equilibrium analysis in that a partial equilibrium analysis would 
examine the effects of the mandatory COOL on consumers and producers of 
fish and shellfish. The general equilibrium approach is a more 
encompassing analytic approach. However, the gains and losses to 
consumers and producers of fish and shellfish are not identified 
separately from the rest of the economy.
    Annual costs to the U.S. economy in terms of reduced purchasing 
power resulting from a loss in productivity after a 10-year period of 
adjustment are estimated at $6.2 million. Domestic production of fish 
and shellfish at the producer and retail levels is estimated to be 
lower and prices to be higher. U.S. exports of fish and shellfish are 
estimated to decrease, while U.S. imports of fish and shellfish are 
estimated to increase.
    The findings indicate that directly affected industries recover the 
higher costs imposed by the rule through slightly higher prices for 
their products. With higher prices, the quantities of their products 
demanded also decline. Consumers pay slightly more for the products and 
purchase less fish and shellfish. Overall, however, the fish and 
shellfish account for a small portion of the U.S. economy and of 
consumers' budgets. Thus, the ``deadweight'' economic burden of the 
rule is considerably smaller than the incremental costs to directly 
affected firms.
    Estimated impacts of this interim final rule are subject to 
uncertainties inherent in this type of prospective economic analysis. 
Firms directly affected by this interim final rule differ considerably 
in size and in their operational characteristics. Actual impacts on 
individual firms and on the overall economy resulting from the interim 
final rule may vary from the average estimated impacts presented 
herein.
    The remainder of this section describes in greater detail how we 
developed the estimated direct, incremental costs and the overall costs 
to the U.S. economy.
    Cost assumptions: This interim final rule directly regulates the 
activities of retailers (as defined by the law) and their suppliers. 
Retailers are required by the rule to provide country of origin and 
method of production (wild and/or farm-raised) information for fish and 
shellfish products that they sell, and firms that supply these products 
to these retailers must provide them with

[[Page 59728]]

this information. In addition, all other firms in the supply chain for 
the relevant fish and shellfish products are potentially affected by 
the rule because country of origin and method of production (wild and/
or farm-raised) information will need to be maintained and transferred 
along the entire supply chain to enable retailers to correctly label 
the products at the point of final sale.
    Number of firms and number of establishments affected: We estimate 
that approximately 125,000 establishments owned by approximately 91,000 
firms would be either directly or indirectly affected by this rule. 
Table 1 provides estimates of the affected firms and establishments.

             Table 1.--Estimated Number of Affected Entities
------------------------------------------------------------------------
                      Type                        Firms   Establishments
------------------------------------------------------------------------
Fish:
    Farm-Raised Fish and Shellfish.............    3,540         3,540
    Fishing....................................   76,499        76,452
                                                ----------
    Fresh & Frozen Seafood Processing..........      582           653
    Fish & Seafood Wholesale...................    2,897         2,980
                                                ----------
    General Line Grocery Wholesalers...........    3,183         3,993
    Retailers..................................    4,512        37,176
                                                ==========
Totals:
    Producers..................................   80,039        79,992
    Intermediaries.............................    6,662         7,626
    Retailers..................................    4,512        37,176
                                                ==========
    Grand Total................................   91,213       124,794
------------------------------------------------------------------------

    In contrast to the PRIA, the beef, pork, lamb, perishable 
agricultural commodity and peanut sectors are no longer directly 
affected by this interim final rule. Thus, entities in these sectors 
are removed from the estimated number of affected entities. In 
addition, the numbers of affected entities in the seafood processing 
industry are lowered. Canned seafood products would have required 
labeling under the proposed rule, but are exempt under the interim 
final rule because of the revised definition of a processed food item. 
While there may be fishing operations that harvest fish destined 
exclusively for canning, data on the number of such operations are 
unavailable. In addition, fishing vessels that target a particular 
species destined for canning often have a by-catch of other species 
that would be destined for fresh or frozen end uses. Thus, we believe 
that keeping the estimated number affected fishing operations unchanged 
is a reasonable assumption. In the PRIA, the seafood product 
preparation and packing industry included fresh and frozen seafood 
processing and seafood canning. Because the interim final rule exempts 
canned seafood products, the number of affected seafood processing 
firms is reduced from 741 to 582 and the number of establishments from 
823 to 653. We assume that all of these remaining fresh and frozen 
seafood processing firms prepare at least some covered commodities, 
although there may be some firms that prepare fish and shellfish 
exclusively into items that would be exempt from this rule under the 
definition of a processed food item. For example, a firm that produces 
only breaded shrimp would not be subject to the requirements of this 
interim final rule.
    We assume that all firms and establishments identified in Table 1 
will be impacted by the rule, although some may not produce or sell 
products ultimately within the scope of the rule. While this assumption 
likely overstates the number of affected firms and establishments, we 
believe that the assumption is reasonable. Detailed data are not 
available on the number of entities categorized by the marketing 
channels in which they operate and the specific products that they 
sell.
    Source of cost estimates: To develop estimates of the cost of 
implementing this rule, we reviewed the comments received on the 
voluntary guidelines (67 FR 63367), the comments received on the 
proposed rule for mandatory COOL (68 FR 61944), and available economic 
studies. No single source of information, however, provided 
comprehensive coverage of all economic benefits and costs associated 
with mandatory COOL. We applied available information and our knowledge 
about the operation of the supply chains for the covered commodities to 
synthesize the findings of the available studies about the rule's 
potential costs.
    Cost drivers: This interim final rule is a retail labeling 
requirement. Retail stores subject to this rule will be required to 
inform consumers as to the country of origin and method of production 
(wild and/or farm-raised) of the covered fish and shellfish products 
that they sell. To accomplish this task, individual package labels or 
other point-of-sale materials will be required. If products are not 
already labeled by suppliers, the retailer will be responsible for 
labeling the items or providing the country of origin and method of 
production (wild and/or farm-raised) information through other point-
of-sale materials. This may require additional retail labor and 
personnel training. A recordkeeping system will be required to ensure 
that products are labeled accurately and to permit compliance and 
enforcement reviews. For most retail firms of the size defined by the 
statute (i.e., those retailing fresh and frozen fruits and vegetables 
with an invoice value of at least $230,000), we assume that 
recordkeeping will be accomplished primarily by electronic means. 
Modifications to recordkeeping systems will require software 
programming, but in most cases should not entail additional computer 
hardware. We expect that retail stores will also undertake efforts to 
ensure that their operations are in compliance with the interim final 
rule.
    Prior to reaching retailers, most covered fish and shellfish 
products move through distribution centers or warehouses. Direct store 
deliveries are an exception. Distribution centers will be required to 
provide retailers with

[[Page 59729]]

country of origin and method of production (wild and/or farm-raised) 
information. This will require additional recordkeeping processes to 
ensure that the information passed from suppliers to retail stores 
permits accurate product labeling and permits compliance and 
enforcement reviews. Additional labor and training may be required to 
accommodate new processes and procedures needed to maintain the flow of 
country of origin and method of production (wild and/or farm-raised) 
information through the distribution system. There may be a need to 
further segregate products within the warehouse, add storage slots, and 
alter product stocking, sorting, and picking procedures.
    Processors of covered fish and shellfish products will also need to 
inform retailers and wholesalers as to the country of origin and method 
of production (wild and/or farm-raised) of the products that they sell. 
To do so, their suppliers will need to provide documentation regarding 
the country of origin and method of production (wild and/or farm-
raised) of the products that they sell. Maintaining country of origin 
and method of production (wild and/or farm-raised) identity through the 
processing phase is more complex if products from more than one country 
or from more than one method of production are involved. For example, 
the identity of wild shrimp from the U.S. and farm-raised shrimp from 
Thailand entering the same processing facility would need to be 
maintained throughout the packing operation. The efficiency of 
operations may be affected if products are segregated in receiving, 
storage, processing, and shipping operations. For processors handling 
products from multiple origins, there may also be a need to separate 
shifts for processing products from different origins, or to split 
processing within shifts. In either case, costs are likely to increase. 
Records will need to be maintained to ensure that accurate country of 
origin and method of production (wild and/or farm-raised) information 
is retained throughout the process and to permit compliance and 
enforcement reviews.
    Processors handling only domestic origin products or products from 
a single country of origin and a single method of production may have 
lower implementation costs compared with processors handling products 
from multiple origins and methods of production. A processor that 
already sources products from a single country would not face 
additional costs associated with product segregation and tracking, 
provided that the products also have the same method of production 
(wild or farm-raised). Procurement costs also may be unaffected in this 
case, if the processor is able to continue sourcing products from the 
same suppliers. Alternatively, a processor that currently sources 
products from multiple countries may choose to limit its source to a 
single country to avoid costs associated with product segregation and 
tracking. In this case, such cost avoidance would be partially offset 
by additional procurement costs to source supplies from a single 
country of origin. Additional procurement costs may include higher 
transportation costs due to longer shipping distances and higher 
acquisition costs due to supply and demand conditions for products from 
a particular country of origin, whether domestic or foreign, and having 
the same method of production, whether wild or farm-raised.
    At the production level, fish producers and harvesters will need to 
create and maintain records to establish country of origin and method 
of production (wild and/or farm raised) information for the products 
they sell. Country of origin and method of production (wild and/or 
farm-raised) information will need to be transferred to the first 
handler of their products, and records sufficient to allow the source 
and method of production of the product to be traced back will need to 
be maintained as the products move through the supply chains. In 
general, additional producer and harvester costs include the cost of 
establishing and maintaining a recordkeeping system for country of 
origin and method of production (wild and/or farm-raised) information, 
product identification, and labor and training.
    Incremental cost impacts on affected entities: To estimate direct 
costs of this rule, we focus on units of production that are impacted 
(Table 2). Relative to the PRIA, estimated quantities are reduced for 
fish and shellfish at the intermediary and retailer levels.

    Table 2.--Estimated Annual Units of Fish and Shellfish Production
            Affected by Mandatory Country of Origin Labeling
------------------------------------------------------------------------
                                                               Million
                                                                pounds
------------------------------------------------------------------------
Producer...................................................        7,707
Intermediary--
    Fresh and Frozen Fish:
        U.S. Food Disappearance............................        1,617
        Adjustments for Fish Sticks & Portions:
            U.S. Production................................         -232
            Imports........................................          -16
            Exports........................................            5
                                                            ------------
              Adjusted Subtotal............................        1,374
                                                            ============
    Fresh and Frozen Shellfish:
        U.S. Food Disappearance............................        1,304
        Adjustments for Breaded Shrimp:
            U.S. Production................................         -152
            Imports........................................           -7
                                                            ------------
              Adjusted Subtotal............................        1,145
                                                            ============
                Total, Intermediary........................        2,519
                                                            ============
Retailer--
    At-Home Consumption:
        Fish...............................................          797

[[Page 59730]]

 
        Shellfish..........................................          435
                                                            ------------
          Total............................................        1,232
                                                            ============
            Total, Affected Retailers......................          811
------------------------------------------------------------------------

    For fish producers, production is measured by round weight (live 
weight) pounds of fish, except mollusks, which excludes the weight of 
the shell. Wild caught fish and shellfish production is measured by 
U.S. domestic landings for fresh and frozen human food. The PRIA 
estimate inadvertently omitted landings of fish for canned human food, 
which would have required labeling under the proposed rule. Canned 
fish, however, is exempt from this interim final rule. We assume that 
fish harvesters generally know whether their catch is destined for 
fresh and frozen markets, canning, or industrial use. Fish production 
also includes farm-raised fish. Total estimated fish production is 
unchanged from the PRIA.
    We assume that all sales by intermediaries such as handlers, 
packers, processors, wholesalers, and importers will be impacted by the 
rule. Although some product is destined exclusively for foodservice or 
other channels of distribution not subject to the interim final rule, 
we assume that these intermediaries will seek to keep their marketing 
options open for possible sales to subject retailers. Among other 
adjustments, fish and shellfish production at the intermediary level is 
reduced by 1.2 billion pounds from the PRIA estimate to account for the 
removal of canned fish and shellfish (Ref. 1).
    Further adjustments to intermediary volume are made to remove other 
major categories of products exempt from labeling--fish sticks, fish 
portions, and breaded shrimp. Fish sticks and portions are shaped 
masses of cohering fish flesh, and are thus defined as a processed food 
item. The volume of affected fish production is computed separately 
from shellfish production. As shown in Table 2, U.S. disappearance of 
fresh and frozen fish is estimated at 1,617 million pounds in 2001 
(Ref. 1), which includes imports but excludes exports. This figure is 
reduced by the estimated U.S. production of fish sticks and portions 
(232 million pounds, Ref. 2) and by imports of fish sticks (16 million 
pounds, Ref. 3), as these items would be exempt from the requirements 
of this rule. Exports of fish sticks (5 million pounds, Ref. 3) are 
added back to U.S. production to estimate net U.S. supplies of these 
exempt products (i.e., domestic production plus imports minus exports). 
Similar calculations are applied to fresh and frozen shellfish to 
account for breaded shrimp. In the case of shellfish, however, U.S. 
trade data (Ref. 3) do not identify exports of breaded shrimp. 
Accordingly, exports of breaded shrimp are treated as zero for purposes 
of the calculations shown in Table 2.
    PRIA estimates of the volume of affect product at the retail level 
are revised to reflect changes in the definition of a processed food 
item and to improve the accuracy of the estimates. First, estimated 
fish and shellfish retailer volume is reduced by 493 million pounds 
from the PRIA estimate to remove canned fish and shellfish (Ref. 1), 
which is exempt from the requirements of this rule under the revised 
definition of a processed food item. Second, revised factors are used 
to estimate the volume of product requiring labeling at retailers 
subject to this rule.
    In the PRIA, food disappearance figures were multiplied by 0.414 to 
represent the estimated share of production sold through retailers 
covered by the proposed rule. To derive this share, the factor of 0.629 
was used to remove the 37.1 percent food service quantity share of 
total food in 2002. This factor was then multiplied by 0.658, which was 
the share of sales by supermarkets, warehouse clubs and superstores of 
food for home consumption in 2002. In other words, we assumed 
supermarkets, warehouse clubs and superstores represent the retailers 
as defined by PACA, and these retailers were estimated to account for 
65.8 percent of retail sales of the covered commodities.
    Compared to other food products, greater proportions of fish and 
shellfish are eaten away from home, and smaller proportions are eaten 
at home. We estimate that 58 percent of fresh and frozen fish and 38 
percent of shellfish are eaten at home. These proportions are based on 
estimated at-home and away-from-home the National Seafood Consumption 
Survey conducted by the National Marine Fisheries Service (Ref. 4). 
Based on these percentages, at-home consumption is estimated at 797 
million pounds for covered fresh and frozen fish products and 435 
million pounds for covered shellfish products (Table 2). Total at-home 
consumption of covered fresh and frozen shellfish products is estimated 
at 1.2 billion pounds. As in the PRIA, 65.8 percent of at-home 
consumption is estimated to be sold by retailers subject to this rule. 
As a result, the total volume of fresh and frozen fish and shellfish 
products affected by this rule is estimated to be 811 million pounds at 
retail. Total fish and shellfish volume at retail is thus reduced 891 
million pounds from the PRIA estimate.
    Table 3 summarizes the direct, incremental costs that we believe 
firms will incur during the first year as a result of this interim 
final rule. These estimates are derived primarily from the available 
studies that addressed cost impacts of mandatory COOL, coupled with our 
estimates of the volume of affected production at each level of the 
supply chain.

   Table 3.--Estimates of First-Year Implementation Costs for Fish and
                Shellfish, per Affected Industry Segment
------------------------------------------------------------------------
                                                                Million
                                                                dollars
------------------------------------------------------------------------
Producer.....................................................         19
Intermediary.................................................         13
Retailer.....................................................         57
                                                              ----------
    Total....................................................         89
------------------------------------------------------------------------

    Assumptions and procedures underlying the cost estimates are 
described fully in the discussion of the upper range estimates 
presented in the PRIA. Changes from the PRIA estimates are highlighted 
herein.
    As in the PRIA (68 FR 61952), we estimate costs to fish and 
shellfish producers at $0.0025 per pound. Total costs for fish and 
shellfish producers are thus estimated at $19 million,

[[Page 59731]]

unchanged from the PRIA upper range estimate. As mentioned previously, 
the PRIA estimated of fish landings inadvertently omitted U.S. domestic 
landings used for canned human food. Thus, the estimated volume of fish 
is unchanged at the producer level even though the interim final rule 
now exempts canned fish. With the same estimate of the number of 
affected producers, the estimated cost per producer remains unchanged.
    Consistent with the PRIA (68 FR 61952), we adopt $0.005 per pound 
as an estimate of costs for intermediaries in the fish and shellfish 
sector. Processors will need to collect country of origin and method of 
production (wild and/or farm-raised) information from producers, 
maintain this information, and supply this information to other 
intermediaries or directly to retailers. In addition, there may need to 
be segregation of the product before and after processing to facilitate 
tracking of country of origin and method of production (wild and/or 
farm-raised) identity. There will also be labeling costs associated 
with providing country of origin and method of production (wild and/or 
farm-raised) information on consumer-ready packs of frozen and fresh 
fish that are labeled by processors. Total costs for fish and shellfish 
intermediaries are thus estimated at $13 million, a reduction of $8 
million from the upper range PRIA estimate. The reduction is 
attributable to the lowered estimate of the volume of production 
affected by the rule.
    As discussed in the PRIA (68 FR 61952), we adopt $0.07 per pound as 
an estimate of costs for retailers of fish and shellfish. This estimate 
results in total costs of $57 million for retailers of fish and 
shellfish, a reduction of $62 million from the PRIA upper range 
estimate. As with intermediaries, the reduction stems from the lowered 
estimate of the volume of production affected by the rule.
    Total costs for fish and shellfish are estimated at $89 million, 
$70 million less than the PRIA upper range estimate.
    We estimate total incremental costs for this interim final rule of 
$19 million for fish producers and harvesters, $13 million for 
intermediaries, and $57 million for retailers for the first year. Total 
incremental costs for all supply chain participants are estimated at 
$89 million for the first year. The large reduction from the PRIA upper 
range estimate of $3.9 billion is attributable to the fact that this 
interim final rule covers only wild and farm-raised fish and shellfish 
products. The proposed rule also covered beef, pork, lamb, fruits, 
vegetable, and peanuts.
    There are wide differences in average estimated implementation 
costs for individual entities in different segments of the supply chain 
(Table 4). With the exception of a small number of fishing operations, 
producer operations are single-establishment firms. Thus, average 
estimated costs per firm and per establishment are the same after 
rounding to the nearest dollar. In contrast, retailers subject to the 
rule operate an average of just over eight establishments per firm. As 
a result, average estimated costs per retail firm also are just over 
eight times larger than average costs per establishment.

    Table 4.--Estimated First-Year Implementation Costs per Firm and
                              Establishment
------------------------------------------------------------------------
                                                                  Estab-
                                                          Firm    lish-
                                                                   ment
------------------------------------------------------------------------
Producer..............................................     $241     $241
Intermediary..........................................    1,890    1,650
Retailer..............................................   12,600    1,530
------------------------------------------------------------------------

    Average estimated implementation costs per fish and shellfish 
producer are relatively small at $241. Costs per fish operation are 
lowered slightly from the PRIA upper-range estimates due to a 
correction in the number of fishing operations used to calculate the 
average cost per operation (the estimated number of operations is 
unchanged from the PRIA). Estimated costs for intermediaries are 
substantially larger, averaging $1,890 per firm and $1,650 per 
establishment. The average cost per firm is much less than the PRIA 
upper range estimated cost, with the lower cost attributable to the 
sharp reduction in the volume of production subject to this interim 
final rule. Similarly, the average cost per intermediary establishment 
is considerably less than PRIA the upper range estimate. At an average 
of $12,600 retailers have the highest average estimated costs per firm. 
This is much less than the PRIA upper range estimate because of the 
reduction in the estimated volume of production subject to the interim 
final rule. Retailers also have the highest average estimated costs per 
establishment, $1,530.
    The costs per firm and per establishment represent industry 
averages for aggregated segments of the supply chain. Large firms and 
establishments likely will incur higher costs relative to small 
operations due to the volume of commodities that they handle and the 
increased complexity of their operations. In addition, different types 
of businesses within each segment are likely to face different costs. 
Thus, the range of costs incurred by individual businesses within each 
segment is expected to be large, with some firms incurring only a 
fraction of the average costs and other firms incurring costs many 
times larger than the average.
    We believe that the major cost drivers for the rule occur when 
covered commodities are transferred from one firm to another, when 
covered commodities are commingled in the production or marketing 
process, and when products are assembled and then redistributed to 
retail stores. In part, we believe that some requirements of the rule 
will be accomplished by firms using essentially the same processes and 
practices as are currently used, but with information on country of 
origin and method of production (wild and/or farm-raised) claims added 
to the processes. This adaptation generally would require relatively 
small marginal costs for recordkeeping and identification systems. In 
other cases, however, firms may need to revamp current operating 
processes to implement the rule. For example, a processing plant may 
need to sort incoming products by country of origin and method of 
production (wild and/or farm-raised) in addition to weight, size, 
color, or other quality factors. This may require adjustments to plant 
operations, line processing, product handling, and storage. Ultimately, 
we anticipate that a mix of solutions will be implemented by industry 
participants to effectively meet the requirements of the rule. 
Therefore, we anticipate that direct, incremental costs for the interim 
final rule likely will fall within a reasonable range of the estimated 
total of $89 million.
    In the PRIA, one regulatory alternative considered by AMS would be 
to narrow the definition of a processed food item, thereby increasing 
the scope of commodities covered by the rule. This alternative is not 
adopted in this interim final rule. An increase in the number of 
commodities that would require COOL would increase implementation costs 
of the rule with little expected economic benefit. Additional labeling 
resulting from fewer exempted items may also slow some of the 
innovation that is occurring with various types of value-added, further 
processed products.
    A converse regulatory alternative would be to broaden the 
definition of a processed food item, thereby decreasing the scope of 
commodities covered by the rule. Accordingly, such an alternative would 
decrease implementation costs for the rule. At the retail level and to 
a lesser extent at the intermediary level, cost reductions would be at 
least partly proportional to

[[Page 59732]]

the reduction in the volume of production requiring retail labeling. 
Start-up costs for retailers and many intermediaries likely would be 
little changed by a narrowing of the scope of commodities requiring 
labeling because firms would still need to modify their recordkeeping, 
production, warehousing, distribution, and sales systems to accommodate 
the requirements of the rule for those commodities that would require 
labeling. Ongoing maintenance and operational costs, however, likely 
would decrease in some proportion to a decrease in the number of items 
covered by the rule. On the other hand, implementation costs for the 
vast majority of fish and shellfish harvesters and producers would not 
be affected by a change in the definition of a processed food item. 
This is because we assume that virtually all affected producers would 
seek to retain the option of selling their products through supply 
channels for retailers subject to the rule.
    The definition of a processed food item developed for this interim 
final rule has taken into account comments from potentially affected 
entities and has resulted in excluding products that would be more 
costly and troublesome for retailers and suppliers to provide country 
of origin and method of production (wild and/or farm-raised) 
information. Total incremental costs for this interim final rule are 
estimated at $70 million less than the upper range costs estimated in 
the PRIA for fish and shellfish because of the exemption of canned 
items under the revised definition of a processed food item.
    Another alternative considered by AMS would be to require that 
suppliers provide an affidavit for each transaction to the immediate 
subsequent recipient certifying that the country of origin and method 
of production (wild and/or farm-raised) claims being made are truthful 
and that the required records are being maintained. We do not have an 
estimate of the number of transactions that would be impacted. 
Assuming, however, costs of just $0.001 per pound of product sold by 
producers and intermediaries, and assuming that commodities are 
transferred at least twice between intermediaries, costs for fish and 
shellfish would increase by nearly $13 million, or almost 15 percent, 
compared to the alternative of having no affidavits. Taking into 
consideration probable cost impacts, comments received on the proposed 
rule, and the structure and needs of the industry, we rejected this 
alternative.
    Effects on the economy: The previous section estimated the direct, 
incremental costs of the interim final rule to the affected firms in 
the supply chains for the covered commodities. While these costs are 
important to those directly involved in the production, distribution, 
and marketing of covered commodities, they do not represent net costs 
to the U.S. economy or net costs to the affected entities for that 
matter.
    With respect to assessing the effect of this rule on the economy as 
a whole, it is important to understand that a significant portion of 
the costs directly incurred by the affected entities take the form of 
expenditures for additional production inputs, such as payments to 
others whether for increased hours worked or for products and services 
provided. As such, these direct, incremental costs to affected entities 
do not represent losses to the economy but rather transfers of money 
from one economic agent to another. As a result, the direct costs 
incurred by the participants in the supply chains for the covered 
commodities do not measure the impact of this rule on the economy as a 
whole. Instead, the relevant measure is the extent to which the interim 
final rule reduces the amount of goods and services that can be 
produced throughout the U.S. economy from the available supply of 
inputs and resources.
    Even from the perspective of the directly affected entities, the 
direct, incremental costs do not present the whole picture. Initially, 
the affected entities will have to bear the full cost of implementing 
the interim final rule. However, over time as the economy adjusts to 
the requirements of the interim final rule, the burden facing suppliers 
will be reduced as their production level and the prices they receive 
change. What is critical in assessing the effect of this rule on the 
affected entities over the longer run is to determine the extent to 
which the entities are able to pass these costs on to others and 
consequently how the demand for their commodities is affected.
    Conceptually, suppose that all the increases in costs from this 
rule were passed on to consumers in the form of higher prices and that 
consumers continued to purchase the same quantity of the affected 
commodities from the same marketing channels. Under these conditions, 
the suppliers of these commodities would not suffer any net loss from 
the rule even if the increases in their operating costs were quite 
substantial. However, other industries might face losses as consumers 
may spend less on other commodities. It is unlikely, however, absent 
the rule leading to changes in consumers' preferences for the covered 
commodities, that consumers will maintain their consumption of the 
covered commodities in the face of increased prices. Rather, many or 
most consumers will likely reduce their consumption of the covered 
commodities. The resulting changes in consumption patterns will in turn 
lead to changes in production patterns and the allocation of inputs and 
resources throughout the economy. The net result, once all these 
changes have occurred, is that the total amount of goods and services 
produced by the U.S. economy will be less than before.
    To analyze the effect of the changes resulting from the rule on the 
total amount of goods and services produced throughout the U.S. economy 
in a global context, we utilized a computable general equilibrium (CGE) 
model developed by ERS. In the PRIA, the ERS CGE model includes all the 
covered commodities and the products from which they are derived, as 
well as non-covered commodities that would be indirectly affected by 
the proposed rule, such as poultry and feed grains. For purposes of 
this interim final rule, the same model structure is used, but direct, 
incremental cost increases are assumed to occur for fish and shellfish 
products only.
    The ERS CGE model traces the impacts from an economic ``shock,'' in 
this case an incremental increase in operating costs, through the U.S. 
agricultural sector and the U.S. economy to the rest of the world and 
back through the inter-linking of economic sectors. By taking into 
account the linkages among the various sectors of the U.S. and world 
economies, a comprehensive assessment can be made of the economic 
impact on the U.S. economy of the rule implementing COOL. The model 
reports resulting economic changes after a ten-year period of 
adjustment.
    The results of this analysis indicate that the interim final rule 
implementing COOL after the economy has had a period of ten years to 
adjust will have a more limited impact on the overall U.S. economy than 
the direct costs for the first year, alone, would suggest. Under the 
assumption that COOL will not change consumers' preferences for the 
covered fish and shellfish commodities, we estimate that the overall 
costs to the U.S. economy of the interim final rule, in terms of a 
reduction in consumers' purchasing power, will be $6.2 million. This 
represents the cost to the U.S. economy after all transfers and 
adjustments in consumption and production patterns have occurred.

[[Page 59733]]

    Overall costs to the U.S. economy after a decade of adjustment are 
significantly smaller than the first-year implementation costs to 
directly affected firms. This result does not imply that the 
implementation costs for directly affected firms have been 
substantially reduced from the initial estimates. While some of the 
increase in their costs will be offset by reduced production and higher 
prices over the longer term, the suppliers of the covered commodities 
will still bear direct implementation costs. Prior to full economic 
adjustment, economic impacts on directly affected firms in the short 
term are expected to be larger than impacts on the economy after 
adjustment has taken place.
    Our estimates of the overall costs to the U.S. economy are based on 
our estimates of the incremental increases in operating costs to the 
affected firms. The model does not permit supply channels for covered 
commodities that require country of origin and method of production 
information to be separated from supply channels for the same 
commodities that do not require COOL. Thus, the direct cost impacts 
must be adjusted to accurately reflect changes in operating costs for 
all firms supplying covered commodities. Table 5 reports these adjusted 
estimates in terms of their percentage of total operating costs for 
each of the directly impacted sectors. The percentages used are based 
on our estimate of the percentage change in operating costs for the 
entire supply channel and are adjusted between the various segments of 
the fish and shellfish supply chain (harvesters and producers, 
processors, importers, and retailers) based on our estimate of how the 
costs of the regulation will be distributed among them. As a result, 
the cost changes shown in Table 5 only approximate the direct cost 
estimates previously described.

 Table 5.--Estimated Increases in Fish and Shellfish Industry Operating
                      Costs by Supply Chain Segment
------------------------------------------------------------------------
                                                                 Percent
                                                                 change
------------------------------------------------------------------------
Farm Supply:
    Domestic..................................................       0.6
    Imported..................................................       0.6
Processing:
    Domestic..................................................     (\1\)
    Imported..................................................     (\1\)
Retail:
    Domestic..................................................       0.4
    Imported..................................................      0.4
------------------------------------------------------------------------
\1\ Due to the structure of the model, costs increases for the
  processing segment are included in the retail segment.

    In addition, we assume that domestic and foreign suppliers of the 
affected commodities located at the same level or segment of the supply 
chain face the same percentage increases in their operating costs. In 
reality, imported covered commodities likely would enjoy some measure 
of competitive advantage as a portion of those products already enter 
the United States with country of origin labels. Labeling and country 
of origin notification necessary to satisfy existing U.S. Customs and 
Border Protection requirements could be used to implement the country 
of origin requirements of this rule, but importers also would need to 
provide method of production information (wild and/or farm-raised) for 
covered fish and shellfish commodities destined for retail.
    The percentage changes in operating costs reported in Table 5 
differ from the percentage changes in operating costs reported for the 
High Cost scenario as listed in Table 8 in the PRIA. The differences in 
percentage changes reported in the PRIA and those reported here are 
attributable to changes in implementation costs of the interim final 
rule as well as recalibration of our estimates of total operating costs 
for the various segments of the supply channels of the directly 
impacted sectors.
    As discussed above, consumption and production patterns will change 
as the incremental increases in operating costs outlined above are 
passed on, at least partially, to consumers in the form of higher 
prices by the affected firms. The increases in the prices of the 
covered fish and shellfish commodities will in turn cause exports and 
domestic consumption and ultimately domestic production to fall.
    The costs of the interim final rule will not be shared equally by 
all suppliers of the covered commodities. The distribution of the costs 
of the rule will be determined by several factors in addition to the 
direct costs of complying with the rule. These are the availability of 
substitute products not covered by the rule and the relative 
competitiveness of the affected suppliers with respect to other sectors 
of the U.S. and world economies.
    Table 6 contains the percentage changes in prices, production, 
exports, and imports for the three main segments of the marketing chain 
for fish and shellfish. Results for potential substitute products are 
not shown in Table 6 because impacts of the interim final rule on these 
products are estimated to be minimal. Percentage changes in U.S. 
production, prices, exports, and imports of cattle and sheep, broilers, 
hogs, beef and lamb, chicken, and pork are estimated to be 0.001 
percent or less. Because of the negligible impacts on these other 
commodities, Table 6 shows results for fish and shellfish only.

  Table 6.--Estimated Impact of Interim Final Rule on U.S. Production,
                 Prices and Trade of Fish and Shellfish
------------------------------------------------------------------------
                                                                 Percent
                                                                 Change
                             Item                               from the
                                                                  Base
                                                                  Year
------------------------------------------------------------------------
Price.........................................................      0.36
Production....................................................     -0.46
Exports.......................................................     -0.56
Imports.......................................................      0.18
------------------------------------------------------------------------

    The rule increases operating costs for the supply chains for the 
covered fish and shellfish commodities. As shown in Table 6, the 
increased costs result in higher prices for these products. The 
quantity demanded at these higher prices falls, with the result that 
the U.S. production of fish and shellfish decreases.
    Demand for U.S. fish production is particularly sensitive to 
increases in prices in the model, suggesting that U.S. fish suppliers 
face a degree of competitive disadvantage relative to their foreign 
counterparts. As a result, fish imports increase as a result of the 
estimated cost increases, while U.S. production falls. Evidently, U.S. 
domestic suppliers of fish respond more to changes in their operating 
costs than do foreign suppliers. The resulting gap between the supply 
response of U.S. and foreign producers provides foreign suppliers of 
fish with a competitive advantage in U.S. markets that enables them to 
increase their exports to the U.S. even though they face similar 
increases in operating costs.
    To put these impacts in more meaningful terms, the percentage 
changes reported in Table 6 were converted into changes in current 
prices and quantities produced, imported, and exported (Table 7). The 
base values in Table 7 differ from those reported in

[[Page 59734]]

Table 2 above because they are derived from projected levels reported 
in the USDA Agricultural Baseline for 2003, while values in Table 2 
represent actual reported values for 2002 as compiled by USDA's 
National Agricultural Statistical Service. Baseline values were used to 
accommodate the structure of the model.

  Table 7.--Estimated Changes in U.S. Production, Prices, and Trade for
                           Fish and Shellfish
------------------------------------------------------------------------
              Indicator                  Units       Base       Change
------------------------------------------------------------------------
U.S Production a....................   Mil. Lbs.      10,204      -46.94
U.S. Price b........................       $/Lb.        0.41      0.0015
U.S. Exports........................   Mil. Lbs.       2,565      -14.36
U.S. Imports........................   Mil. Lbs.       4,102       7.38
------------------------------------------------------------------------
 Sources: Changes are derived from applying percentage changes obtained
  from the ERS CGE model to the base values.
a Base values for fish come from Fisheries of the United States, 2001.
  National Marine Fisheries Service, National Oceanic and Atmospheric
  Administration, U.S. Department of Commerce, 2002.
b Fish price derived by dividing total value of commercial and
  aquaculture production, excluding other, by total commercial and
  aquaculture production.

    U.S. prices for covered fish and shellfish commodities increase by 
a very small amount, less than two-tenths of a cent per pound. U.S. 
production declines by 47 million pounds. The estimated changes in 
prices and production cause revenues for the fish industry to fall by 
$4 million. The increase in the price of the affected fish and 
shellfish commodities cause exports to decline by about 14 million 
pounds. Imports of fish and shellfish increase and as costs imposed on 
importers are relatively less than those imposed on domestic producers.
    The ERS CGE model assumes that firms behave as though they have no 
influence on either their input or output prices. On the other hand, 
for example, a model that assumed that processors could influence their 
input and output prices could find that prices received by agricultural 
producers decreased because processors passed their cost increases down 
to their suppliers rather than increase the price they charged their 
customers.
    The estimates of the economic impact of the interim final rule on 
the United States are based on the assumption that country of origin 
and method of production (wild and/or farm-raised) labeling does not 
shift consumer demand toward the covered fish and shellfish commodities 
of U.S. origin. This assumption is based on the earlier finding that 
there was no compelling evidence to support the view that mandatory 
COOL will increase the demand for U.S. products. An increase in the 
demand for commodities of U.S. origin increase would have to occur to 
offset the costs imposed on the economy by the interim final rule.
    As previously mentioned, our estimates of the overall economic 
effects of the interim final rule are derived from a CGE model 
developed by ERS. The results from this model show the changes in 
production and consumption patterns after the economy has adjusted to 
the incremental increase in costs (medium run results). In reality, 
such changes occur over time and the economy does not adjust 
instantaneously.
    The results of this analysis describe and compare the old 
production and consumption patterns to the new ones, but do not reflect 
any particular adjustment process. In addition, these results assume 
that the only changes that are occurring in the agriculture sector or 
the economy as a whole are those that are driven by COOL. The purpose 
of using the ERS CGE model is not to forecast what prices and 
production will be over any particular time frame, but to explore the 
implications of COOL on the U.S. economy and capture the direction of 
the changes.
    The ERS CGE model is global in the sense that all regions in the 
world are covered. Production and consumption decisions in each region 
are determined within the model following behavior that is consistent 
with economic theory. Multilateral trade flows and prices are 
determined simultaneously by world market clearing conditions. This 
permits prices to adjust to ensure that total demand equals total 
supply for each commodity in the world.
    The general equilibrium feature of the model means that all 
economic sectors--agricultural and non-agricultural--are included. 
Hence, resources can move among sectors, thereby ensuring that 
adjustments in the feed grains and livestock sectors, for example, are 
consistent with adjustments in the processed sectors.
    The model is static and this implies that gains (or losses) from 
stimulating (or inhibiting) investment and productivity growth are not 
captured. The model allows the existing resources to move among 
sectors, thereby capturing the effects of re-allocation of resources 
that results due to policy changes. However, because the model fixes 
total available resources it underestimates the long-run effects of 
policies on aggregate output.

Regulatory Flexibility Analysis

    This interim final rule has been reviewed under the requirements of 
the Regulatory Flexibility Act (RFA)(5 U.S.C. 601 et seq.). The purpose 
of RFA is to consider the economic impact of a rule on small businesses 
and evaluate alternatives that would accomplish the objectives of the 
rule without unduly burdening small entities or erecting barriers that 
would restrict their ability to compete in the marketplace. The Agency 
believes that this rule will have a significant economic impact on a 
substantial number of small entities. As such, the Agency has prepared 
the following interim final regulatory analysis of the rule's likely 
economic impact on small entities pursuant to the RFA. The Comments and 
Responses section lists the comments received on the preliminary RFA 
and provides the Agency's responses to the comments.
    The interim final rule is the direct result of statutory 
obligations to implement the COOL provisions of the Farm Bill, which 
amended the Act by adding Subtitle D--Country of Origin Labeling. The 
COOL provisions of the Farm Bill require covered fish and shellfish 
commodities to be labeled beginning September 30, 2004. The intent of 
this law is to provide consumers with additional information on which 
to base their purchasing decisions. Specifically, the law imposes 
additional Federal labeling requirements for covered commodities sold 
by retailers subject to the law. Covered commodities included in this 
interim final rule are farm-raised fish and shellfish and wild fish and 
shellfish.
    Under preexisting Federal laws and regulations, COOL is not 
universally required for the commodities covered by this rule. In 
particular, labeling of U.S.

[[Page 59735]]

origin and method of production (wild and/or farm-raised) is not 
mandatory, and labeling of imported products at the consumer level is 
required only in certain circumstances. Thus, the Agency has not 
identified any Federal rules that would duplicate or overlap with this 
interim final rule.
    Many aspects of the mandatory COOL provisions are prescriptive and 
provide little regulatory discretion in rulemaking. The law requires a 
statutorily defined set of food retailers to label the country of 
origin and method of production (wild and/or farm-raised) of covered 
commodities. The law also prohibits USDA from using a mandatory 
identification system to verify the country of origin of covered 
commodities. However, the interim final rule provides flexibility in 
allowing market participants to decide how best to implement mandatory 
COOL in their operations. Market participants other than those 
retailers defined by the statute may decide to sell products through 
marketing channels not subject to the rule. Taking into account 
comments received on the proposed rule, the interim final rule 
decreases the length of time that records are required to be kept, 
providing some relief to affected entities both large and small. A 
complete discussion of the information collection and recordkeeping 
requirements and associated burdens appears in the Paperwork Reduction 
Act section below. In addition, the number of products required to be 
labeled is reduced because the definition of a processed food item has 
been broadened, thus providing additional regulatory relief.
    The objective of the interim final rule is to regulate the 
activities of retailers (as defined by the law) and their suppliers so 
that retailers will be able to fulfill their statutory obligations. The 
interim final rule requires retailers to provide country of origin and 
method of production (wild and/or farm-raised) information for all of 
the covered fish and shellfish commodities that they sell. It also 
requires all firms that supply covered commodities to these retailers 
to provide the retailers with the information needed to correctly label 
the covered commodities. In addition, all other firms in the supply 
chain for the covered commodities are potentially affected by the rule 
because country of origin and method of production (wild and/or farm-
raised) information will need to be maintained and transferred along 
the entire supply chain. In general, the supply chains for the covered 
fish and shellfish commodities consist of farms, fishing operations, 
processors, wholesalers, and retailers. A listing of the number of 
entities in the supply chains for the covered fish and shellfish 
commodities can be found in Table 1 above in the Interim Final 
Regulatory Impact Analysis (IFRIA).
    Retailers covered by this interim final rule must meet the 
definition of a retailer as defined by PACA. The PACA definition 
includes only those retailers handling fresh and frozen fruits and 
vegetables with an invoice value of at least $230,000 annually. 
Therefore, the number of retailers impacted by this rule is 
considerably smaller than the total number of retailers nationwide. In 
addition, there is no requirement that firms in the supply chain must 
supply their products to retailers subject to the interim final rule.
    Because country of origin and method of production (wild and/or 
farm-raised) information will have to be passed along the supply chain 
and made available to consumers at the retail level, we assume that 
each participant in the supply chain as identified in Table 1 will 
likely encounter recordkeeping costs as well as changes or 
modifications to their business practices. Absent more detailed 
information about each of the entities within each of the marketing 
channels, we assume that all such entities will be affected to some 
extent even though some fish and shellfish harvesters, producers and 
suppliers may choose to market their products through channels not 
subject to the requirements of this interim final rule. Therefore, we 
estimate that nearly 125,000 establishments owned by approximately 
91,000 firms will be either directly or indirectly impacted by this 
rule. Changes from the PRIA are reductions in the numbers of affected 
firms and establishments due to the exclusion of covered commodities 
other than wild and farm-raised fish and shellfish in this interim 
final rule.
    This interim final rule potentially will have an impact on all 
participants in the supply chain, although the nature and extent of the 
impact will depend on the participant's function within the marketing 
chain. The rule likely will have the greatest impact on retailers and 
intermediaries (handlers, processors, wholesalers, and importers), 
while the impact on individual fish and shellfish harvesters and 
producers is likely to be relatively small.
    As shown in Table 3 and discussed in the Costs section of the 
IFRIA, we estimate direct incremental costs for the interim final rule 
at approximately $89 million. The decrease in the direct incremental 
cost in the interim final rule as compared to the proposed rule is the 
result of excluding commodities other than fish and shellfish from this 
interim final rule. In addition, broadening the definition of a 
processed food item exempts items such as canned fish and shellfish, 
fish sticks, and breaded shrimp from the labeling requirements of the 
rule.
    There are two measures used by the Small Business Administration 
(SBA) to identify businesses as small: Sales receipts or number of 
employees. In terms of sales, SBA classifies as small those grocery 
stores with less than $23 million in annual sales and specialty food 
stores with less than $6 million in annual sales (13 CFR 121.201). 
Warehouse clubs and superstores with less than $23 million in annual 
sales are also defined as small. SBA defines as small those 
agricultural producers with less than $750,000 in annual sales and 
fishing operations with less than $3.5 million in annual sales. Of the 
other businesses potentially impacted by the interim final rule, SBA 
classifies as small those manufacturing firms with less than 500 
employees and wholesalers with less than 100 employees.
    Retailers: While there are many potential retail outlets for the 
covered commodities, food stores, warehouse clubs, and superstores are 
the primary retail outlets for food consumed at home. In fact, food 
stores, warehouse clubs, and superstores account for 82.5 percent of 
all food consumed at home (Ref. 5). Therefore, the number of these 
stores provides an indicator of the number of entities potentially 
impacted by this interim final rule. The 1997 Economic Census (Ref. 6) 
shows there were 67,916 food store, warehouse club, and superstore 
firms operated for the entire year. Most of these firms, however, would 
not be subject to the requirements of this interim final rule.
    Retailers covered by this interim final rule must meet the 
definition of a retailer as defined by PACA. The number of such 
businesses is estimated from PACA data (Ref. 7). A PACA license is 
required for all retailers having an invoice cost of fresh and frozen 
fruits and vegetables exceeding $230,000 in a calendar year. Licensee 
data is entered and maintained in USDA's PACA database. Among other 
required information, the PACA license application includes the name of 
the business and the number of branches where the business handles 
fruits and vegetables. In the case of retailers, most branch locations 
represent retail stores. There is an active USDA compliance program to 
ensure compliance with licensing requirements, and the industry is 
monitored to keep the licensing data current when there are changes in 
firms' operations (such as the opening of new

[[Page 59736]]

branch locations). Thus, the PACA data provide a reliable estimate of 
the number of retail firms that would be affected by this regulatory 
action.
    Because the PACA definition of a retailer includes only those 
retailers handling fresh and frozen fruits and vegetables with an 
invoice value of at least $230,000 annually, the number of retailers 
impacted by this rule is considerably smaller than the number of food 
retailers nationwide. USDA data indicate that there are 4,512 retail 
firms as defined by PACA that would thus be subject to the interim 
final rule. As explained below, most small food store firms have been 
excluded from mandatory COOL based on the PACA definition of a 
retailer.
    The 1997 Economic Census data provide information on the number of 
food store firms by sales categories. Of the 67,916 food store, 
warehouse club, and superstore firms, we estimate that there are 66,868 
firms with annual sales meeting the SBA definition of a small firm and 
1,048 other firms. USDA has no information on the identities of these 
firms, and the PACA database does not identify firms by North American 
Industry Classification System code that would enable matching with 
Economic Census data. USDA assumes, however, that all or nearly all of 
the 1,048 large firms would meet the definition of a PACA retailer 
because most of these larger food retailers likely would handle fresh 
and frozen fruits and vegetables with an invoice value of at least 
$230,000 annually. Thus, we estimate that 77 percent (3,464 out of 
4,512) of the retailers subject to the interim final rule are small. 
However, this is only 5.2 percent of the estimated total number of 
small food store retailers. In other words, an estimated 94.8 percent 
of small food store retailers would not be subject to the requirements 
of this interim final rule.
    As discussed in the Costs section of the IFRIA, we estimate 
retailer costs under this interim final rule at approximately $57 
million (Table 3). Costs are estimated at $12,600 per retail firm and 
$1,530 per retail establishment (Table 4). These estimated costs are 
lower than the PRIA upper range estimates because of the exclusion of 
commodities other than fish and shellfish from this interim final rule 
and because of the exemption of additional products under the revised 
definition of a processed food item.
    Retailers will face recordkeeping costs, costs associated with 
supplying country of origin and method of production (wild and/or farm-
raised) information to consumers, costs associated with segmenting 
products by country of origin and method of production (wild or farm-
raised), and possibly additional handling costs. These cost increases 
may result in changes to retailer business practices, such as 
additional time devoted to labeling and signage needed to provide 
required information for products sold from in-store seafood department 
operations. The interim final rule does not specify the systems that 
affected retailers must put in place to implement mandatory COOL. 
Instead, retailers will be given flexibility to develop their own 
systems to comply with this rule. There are many ways in which the 
interim final rule's requirements may be met and firms will likely 
choose the least cost method in their particular situation to comply 
with the interim final rule.
    Wholesalers: Any establishment that supplies retailers with one or 
more of the covered commodities will be required by retailers to 
provide country of origin and method of production (wild and/or farm-
raised) information so that retailers can accurately supply that 
information to consumers. Of wholesalers potentially impacted by the 
interim final rule, SBA defines those having less than 100 employees as 
small. Importers of covered commodities will also be impacted by the 
interim final rule and are categorized as wholesalers in the data.
    The 2000 Statistics of U.S. Businesses (Ref. 8) provides 
information on wholesalers by employment size. For fish and seafood 
wholesalers there are a total of 2,897 firms. Of these, 2,837 firms 
have less than 100 employees. Therefore, approximately 98 percent of 
the fish and seafood wholesalers could be considered as small firms.
    In addition to specialty wholesalers that primarily handle a single 
covered commodity, there are also general-line wholesalers that handle 
a wide range of products. For purposes of this analysis, we assume that 
these general-line wholesalers handle at least some of the covered fish 
and shellfish commodities. Therefore, we include the number of general-
line wholesale businesses among entities affected by the interim final 
rule. The 2000 Statistics of U.S. Businesses provides information on 
general-line grocery wholesalers by employment size. There were 3,183 
firms in total, and 2,983 firms had less than 100 employees. This 
results in approximately 94 percent of the general-line grocery 
wholesalers being classified as small businesses.
    In general, 5,820 of 6,080 or 96 percent of the wholesalers are 
classified as small businesses. This indicates that most of the 
wholesalers impacted by this interim final rule may be considered as 
small entities as defined by SBA.
    As discussed in the Costs section of the IFRIA, we estimate that 
intermediaries (importers and domestic wholesalers, handlers, and 
processors) will incur costs under the interim final rule of 
approximately $13 million (Table 3). Costs are estimated at $1,890 per 
intermediary firm and $1,650 per establishment (Table 4). These costs 
are lower than the upper range costs estimated in the PRIA because of 
the omission of commodities other than fish and shellfish from this 
interim final rule and because of the revised definition of a processed 
food item.
    Wholesalers will encounter increased costs in complying with this 
interim final rule. Wholesalers will likely face increased 
recordkeeping costs, costs associated with supplying country of origin 
and method of production (wild and/or farm-raised) information to 
retailers, costs associated with segmenting products by country of 
origin and method of production (wild or farm-raised), and possibly 
additional handling costs. Some of the comments received from 
wholesalers and retailers on the proposed rule and voluntary guidelines 
indicated that retailers may choose to source covered commodities from 
a single supplier that procures the covered commodity from only one 
country in an attempt to minimize the costs associated with complying 
with mandatory COOL. In the case of fish and shellfish, this type of 
change in procurement practices could extend to sourcing products 
having only one method of production (wild or farm-raised). These 
changes in business practices could lead to the further consolidation 
of firms in the wholesaling sector. The interim final rule does not 
specify the systems that affected wholesalers must put in place to 
implement mandatory COOL. Instead, wholesalers will be given 
flexibility to develop their own systems to comply with the interim 
final rule. There are many ways in which the rule's requirements may be 
met. In addition, wholesalers have the option of supplying covered 
commodities to retailers or other suppliers that are not covered by the 
interim final rule.
    Manufacturers: Any manufacturer that supplies retailers or 
wholesalers with a covered commodity will be required to provide 
country of origin and method of production (wild and/or farm-raised) 
information to retailers so that the information can be accurately 
supplied to consumers. Most manufacturers of covered commodities will 
likely print country of origin and method of production (wild and/or

[[Page 59737]]

farm-raised) information on retail packages supplied to retailers. Of 
the manufacturers potentially impacted by the interim final rule, SBA 
defines those having less than 500 employees as small.
    The 2000 Statistics of U.S. Businesses (Ref. 8) provides 
information on manufacturers by employment size. For seafood product 
preparation and packaging there is a total of 741 firms. Of these, 714 
have less than 500 employees and thus, 96 percent are considered to be 
small firms. This indicates that most of the manufacturers of covered 
commodities impacted by the interim final rule would be considered as 
small entities as defined by SBA.
    Manufacturers are included as intermediaries and additional costs 
for these firms are discussed in the previous section addressing 
wholesalers. Manufacturers of covered commodities will encounter 
increased costs in complying with this interim final rule. Like 
wholesalers, manufacturers will likely face increased recordkeeping 
costs, costs associated with supplying country of origin and method of 
production (wild and/or farm-raised) information to retailers, costs 
associated with segmenting products by country of origin and method of 
production, and possibly additional handling costs. Some of the 
comments received from manufacturers on the proposed rule and the 
voluntary guidelines indicated that they may limit the number of 
sources from which they procure raw products. These changes in business 
practices could lead to decreased operational efficiency and the 
further consolidation of firms in the manufacturing sector. The interim 
final rule does not specify the systems that affected manufacturers 
must put in place to implement mandatory COOL. Instead, manufacturers 
will be given flexibility to develop their own systems to comply with 
the rule. There are many ways in which the interim final rule's 
requirements may be met.
    Producers: Harvesters and producers of the covered fish and 
shellfish commodities are directly impacted by this interim final rule. 
These harvesters and producers will more than likely be required by 
handlers and wholesalers to create and maintain country of origin and 
method of production (wild and/or farm-raised) information and transfer 
it to them so that they can readily transfer this information to 
retailers.
    SBA defines a small agricultural producer as having annual receipts 
less than $750,000. Based on 1998 Census of Aquaculture data (Ref. 9), 
we estimate that at least 90 percent of the 3,540 fish and shellfish 
farming operations are small. The manner in which the data are 
reported, however, does not allow the precise number of small producers 
to be calculated. Similar information on the size of fishing operations 
is not known to exist. However, it is assumed that the majority of 
these producers would be considered small businesses. We estimate that 
there are 76,499 firms engaged in fishing (Refs. 8 and 10).
    At the production level, fish and shellfish producers and 
harvesters will need to create, if necessary, and maintain records to 
establish country of origin and method of production (wild and/or farm-
raised) information for the products they sell. This information will 
need to be conveyed as the products move through the supply chains. In 
general, additional producer costs include the cost of establishing and 
maintaining a recordkeeping system for the country of origin and method 
of production (wild and/or farm-raised) information, product 
identification, and labor and training. Based on our knowledge of the 
affected industries as well as comments received on the proposed rule 
and the voluntary guidelines, we believe that producers and harvesters 
already have much of the information available that could be used to 
substantiate country of origin and method of production (wild and/or 
farm-raised) claims.
    The costs for producers and harvesters are expected to be 
relatively limited and should not have a larger impact on small 
producers than large producers. As discussed in the Costs section of 
the IFRIA, producer costs are estimated at $19 million (Table 3), or an 
estimated $241 per firm (Table 4). In the case of producers, the firm 
and the establishment are considered as one and the same, with the 
exception of a small number of fishing operations. Thus, costs per firm 
and per establishment are the same after rounding to the nearest 
dollar.
    Economic impact on small entities: Information on sales or 
employment is not available for all firms or establishments shown in 
Table 1. However, it is reasonable to expect that this interim final 
rule will have a substantial impact on a number of small businesses. At 
the wholesale and retail levels of the supply chain, the efficiency of 
these operations may be impacted if products are segregated in 
receiving, storage, processing, and shipping operations. For processors 
handling products sourced from multiple countries and multiple methods 
of production (wild and/or farm-raised), there may also be a need to 
operate separate shifts for processing products from different origins, 
or to split processing within shifts. In either case, costs are likely 
to increase. Records will need to be maintained to ensure that accurate 
country of origin and method of production (wild and/or farm-raised) 
information is retained throughout the process and to permit compliance 
and enforcement reviews. A complete discussion of the recordkeeping 
burden associated with this rule is contained in the Paperwork 
Reduction Act section below.
    Even if only domestic origin products or products from a single 
country of origin are handled, there may be additional procurement 
costs to source supplies from a single country of origin. In the case 
of fish and shellfish, such ``single-sourcing'' of products extends to 
method of production (wild or farm-raised) in addition to country of 
origin. Additional procurement costs may include higher transportation 
costs due to longer shipping distances and higher acquisition costs due 
to supply and demand conditions for products from a particular country 
of origin, whether domestic or foreign, and with a particular method of 
production (wild or farm-raised).
    These additional costs may result in a number of consolidations 
within the processor, manufacturer, and wholesaler sectors for these 
covered fish and shellfish commodities. Also, to comply with the 
interim final rule, retailers may seek to limit the number of entities 
from which they purchase covered commodities as a means to simplify 
recordkeeping and labeling tasks.
    Additional alternatives considered: As previously mentioned, the 
COOL provisions of the Farm Bill leave little regulatory discretion in 
defining who is directly covered by this rule. The law explicitly 
identifies those retailers required to provide their customers with 
country of origin and, if applicable, method of production (wild and/or 
farm-raised) information for covered commodities (namely, retailers as 
defined by PACA).
    The law also requires that any person supplying a covered commodity 
to a retailer provide information to the retailer indicating the 
country of origin and, in the case of fish and shellfish products, 
method of production (wild and/or farm-raised) of the covered 
commodity. Again, the law provides no discretion regarding this 
requirement for suppliers of covered commodities to provide information 
to retailers.
    The interim final rule has no mandatory requirement, however, for 
any firm other than statutorily defined retailers to make country of 
origin and method of production (wild and/or farm-raised) claims. In 
other words, no

[[Page 59738]]

harvester, producer, processor, wholesaler, or other supplier is 
required to make and substantiate a country of origin and method of 
production (wild and/or farm-raised) claim provided that the commodity 
is not ultimately sold in the form of a covered commodity at the 
establishment of a retailer subject to the interim final rule. Thus, 
for example, a processor and its suppliers may elect neither to 
maintain country of origin and method of production (wild and/or farm-
raised) information nor to make country of origin and method of 
production (wild and/or farm-raised) claims, but instead sell products 
through marketing channels not subject to the interim final rule. Such 
marketing alternatives include foodservice, export, and retailers not 
subject to the interim final rule. We estimate that about 38 percent of 
U.S. fresh and frozen fish and about 25 percent of fresh and frozen 
shellfish sales occur through retailers subject to the interim final 
rule, with the remainder sold by retailers not subject to the interim 
final rule or sold as food away from home. Additionally, producers and 
intermediaries may have opportunities to market their products to 
export markets, which are not subject to the provisions of the interim 
final rule. The majority of product sales are not subject to the rule, 
and there are many current examples of companies specializing in 
production of commodities for foodservice, export markets, and other 
channels of distribution that would not be directly affected by the 
rule.
    The effective date of this regulation is six months following the 
date of publication of this interim final rule. The country of origin 
statute provides that ``not later than September 30, 2004, the 
Secretary shall promulgate such regulations as are necessary to 
implement this subtitle.'' Many of the covered commodities sold at 
retail are in a frozen or otherwise preserved state (i.e., not sold as 
``fresh''). Thus, many of these products would already be in the chain 
of commerce prior to September 30, 2004, and for these products, 
origin/production information may not be known. Therefore, it is 
reasonable to delay the effective date of this interim final rule for 
six months to allow existing inventories to clear through the channels 
of commerce and to allow affected industry members to conform their 
operations to the requirements of this rule. During this time period, 
AMS will conduct an industry education and outreach program concerning 
the provisions and requirements of this rule. AMS also plans to focus 
its enforcement resources for the six months immediately following the 
effective date of this interim final rule on industry education and 
outreach. After a careful review of all its implications, AMS has 
determined that its allocation of enforcement resources will ensure 
that the rule is effectively and rationally implemented. This AMS plan 
of outreach and education, conducted over a period of one year, should 
significantly aid the industry in achieving compliance with the 
requirements of this rule.
    The interim final rule does not dictate systems that firms will 
need to put in place to implement the requirements of the rule. Thus, 
different segments of the affected industries will be able to develop 
their own least-cost systems to implement COOL requirements. For 
example, one firm may depend primarily on manual identification and 
paper recordkeeping systems, while another may adopt automated 
identification and electronic recordkeeping systems.
    The interim final rule has no requirements for firms to report to 
USDA. Compliance audits will be conducted at firms' places of business. 
As stated previously, required records may be kept by firms in the 
manner most suitable to their operations and may be hardcopy documents, 
electronic records, or a combination of both. In addition, the interim 
final rule provides flexibility regarding where records may be kept. If 
the product is pre-labeled with the necessary country of origin and 
method of production (wild and/or farm-raised) information, records 
documenting the immediate previous source and immediate subsequent 
recipient are sufficient as long as the source of the claim can be 
tracked and verified. Such flexibility should reduce costs for small 
entities to comply with the interim final rule.
    In effect, the interim final rule is a performance standard rather 
than a design standard. The interim final rule requires that covered 
fish and shellfish commodities at subject retailers be labeled with 
country of origin and method of production (wild and/or farm-raised) 
information, that suppliers of covered commodities provide such 
information to retailers, and that retailers and their suppliers 
maintain records and information sufficient to verify all country of 
origin and method of production claims. The interim final rule provides 
flexibility regarding the manner in which the required information may 
be provided by retailers to consumers. The interim final rule provides 
flexibility in the manner in which required country of origin and 
method of production (wild and/or farm-raised) information is provided 
by suppliers to retailers, and in the manner in which records and 
information are maintained to substantiate country of origin and method 
of production claims. Thus, the interim final rule provides the maximum 
flexibility practicable to enable small entities to minimize the costs 
of the interim final rule on their operations.

Paperwork Reduction Act

    Pursuant to PRA (44 U.S.C. 3501-3520) the information collection 
provisions contained in this interim final rule have not yet been 
approved by OMB and will not take effect until such approval is 
received. The Comments and Responses section lists the comments 
received on the preliminary PRA analysis and provides the Agency's 
responses to the comments. A description of these provisions is given 
below with an estimate of the annual recordkeeping burden.
    Title: Recordkeeping and Records Access Requirements for Producers 
and Food Facilities.
    OMB Number: 0581-new.
    Type of Request: New collection.
    Expiration Date: Three years from the date of approval.
    Abstract: The COOL provision in the Farm Bill requires that 
specified retailers inform consumers as to the country of origin and, 
in the case of fish and shellfish, method of production (wild and/or 
farm-raised) of covered commodities. This interim final rule requires 
that records and other documentary evidence used to substantiate an 
origin and method of production (wild and/or farm-raised) claim must, 
upon request, be made available to USDA representatives in a timely 
manner during normal business hours and at a location that is 
reasonable in consideration of the products and firm under review. Any 
person engaged in the business of supplying a covered commodity to a 
retailer (i.e., including but not limited to harvesters, producers, 
distributors, handlers, packers, and processors), whether directly or 
indirectly, must make country of origin and method of production (wild 
and/or farm-raised) information available to the retailer and must 
maintain records to establish and identify the immediate previous 
source and immediate subsequent recipient of a covered commodity, in 
such a way that identifies the product unique to that transaction by 
means of a lot number or other unique identifier, for a period of one 
year from the date of the transaction. For an imported covered 
commodity, the importer of record as determined by CBP must ensure that

[[Page 59739]]

records: provide clear product tracking from the port of entry into the 
United States to the immediate subsequent recipient, and accurately 
reflect the country of origin and method of production (wild and/or 
farm-raised) of the item as identified in relevant CBP entry documents 
and information systems; and must maintain such records for a period of 
1 year from the date of the transaction. Records and other documentary 
evidence (e.g., shipping receipt from central warehouse) relied upon at 
the point of sale to establish a product's country of origin and 
designation of production method (wild and/or farm-raised) must be 
available during normal business hours to any duly authorized 
representative of USDA at the facility for as long as the product is on 
hand. In addition, records that identify the retail supplier, the 
product unique to that transaction by means of a lot number or other 
unique identifier, and for products that are not pre-labeled the 
country of origin and method of production (wild and/or farm-raised) 
information, must be maintained for a period of one year from the date 
the origin declaration is made at retail. Such records may be located 
at the retailer's point of distribution, or at a warehouse, central 
office or other off-site location.
    Description of Recordkeepers: Individuals who supply covered fish 
and shellfish commodities, whether directly to retailers or indirectly 
through other participants in the marketing chain, are required to 
establish and maintain country of origin and method of production (wild 
and/or farm-raised) information for the covered commodities and supply 
this information to retailers. As a result, producers, handlers, 
manufacturers, wholesalers, importers, and retailers of covered fish 
and shellfish commodities will be impacted by this interim final rule.
    Burden: We estimate that nearly 125,000 establishments owned by 
approximately 91,000 firms would be either directly or indirectly 
impacted by this rule. Changes from the PRIA are reductions in the 
numbers of affected entities due to the omission of commodities other 
than fish and shellfish in this interim final rule.
    In general, the supply chain for the covered fish and shellfish 
commodities includes fish and shellfish producers and harvesters, 
processors, wholesalers, importers, and retailers. Imported products 
may be introduced at any level of the supply chain. Other 
intermediaries, such as markets, may be involved in transferring 
products from one stage of production to the next. We estimate that the 
interim final rule's paperwork burden will be incurred by the number 
and types of firms and establishments listed in Table 8.

                                      Table 8.--Paperwork Burden Estimates
----------------------------------------------------------------------------------------------------------------
                                                             Initial     Establish-    Maintenance
                     Type                        Firms        costs         ments         costs      Total costs
----------------------------------------------------------------------------------------------------------------
Producers:
    Farm-Raised Fish & Shellfish.............      3,540       245,895         3,540       466,876       712,772
    Fishing..................................     76,499     5,313,774        76,452     3,360,983     8,674,756
                                              ============
Intermediaries:
    Fresh & Frozen Seafood Processing........        582       761,838           653       580,571     1,342,409
    Fish & Seafood Wholesale.................      2,897     3,792,173         2,980     2,649,467     6,441,640
    General Line Grocery Wholesalers.........      3,183     4,166,547         3,993       819,256      4,985,80
                                              ============
Retailers:...................................      4,512     5,906,208        37,176    16,526,275    22,432,483
                                              ============
Totals:
    Producers................................     80,039     5,559,669        79,992     3,827,859     9,387,528
    Handlers, Processors, & Wholesalers......      6,662     8,720,558         7,626     4,049,294    12,769,852
    Retailers................................      4,512     5,906,208        37,176    16,526,275    22,432,483
                                              ------------
        Grand Total..........................     91,213    20,186,435       124,794    24,403,428    44,589,863
----------------------------------------------------------------------------------------------------------------

    The impacted firms and establishments will broadly incur two types 
of costs. First, firms will incur initial or start-up costs to comply 
with the interim final rule. We assume that initial costs will be borne 
by each firm, even though a single firm may operate more than one 
establishment. Second, enterprises will incur additional recordkeeping 
costs associated with storing and maintaining records on an ongoing 
basis. We assume that these activities will take place in each 
establishment operated by each affected business.
    Compared to the proposed rule, this interim final rule reduces the 
length of time that records must be kept and revises the recordkeeping 
requirements for pre-labeled products. 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, in such a way that identifies the product unique to 
that transaction by means of a lot number of other unique identifier, 
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 interim final rule requires records and other 
documentary evidence relied upon at the point of sale by the retailer 
to establish a product's country of origin and method of production, to 
be available to any duly authorized representatives of USDA for as long 
as the product is on hand. Under the proposed rule, retailers would 
have to have maintained these records for 7 days following the sale of 
the product. For pre-labeled products, the interim final rule provides 
that the label itself is sufficient evidence on which the retailer may 
rely to establish a product's origin and method of production (wild 
and/or farm-raised). The proposed rule would not have provided for this 
method of substantiation. Under the interim final rule, records that 
identify the supplier, the product unique to that transaction by means 
of a lot number or other unique identifier, and for products that are 
not pre-labeled, the country of origin and the method of production 
(wild and/or farm-raised) information must be

[[Page 59740]]

maintained for a period of 1 year from the date the origin and 
production designations are made at retail. Under the proposed rule, 
these records would have been required to be maintained for 2 years.
    With respect to initial recordkeeping costs, we believe that most 
fish and shellfish harvesters and producers currently maintain many of 
the types of records that would be needed to substantiate country of 
origin and method of production (wild and/or farm-raised) claims. 
However, harvesters and producers are not typically required to pass 
along country of origin and method of production (wild or farm-raised) 
information to subsequent purchasers. Therefore, harvesters and 
producers will incur some additional incremental costs to record, 
maintain, and transfer country of origin and method of production (wild 
or farm-raised) information to substantiate required claims made at 
retail. Because much of the necessary recordkeeping is already 
developed during typical fishing and aquaculture operations, we 
estimate that the incremental costs for harvesters and producers to 
supplement existing records with country of origin and method of 
production (wild or farm-raised) information will be relatively small 
per firm. Examples of initial or start-up costs would be any additional 
recordkeeping burden needed to record the required country of origin 
and method of production (wild or farm-raised) information and transfer 
this information to handlers, processors, wholesalers, or retailers.
    We estimate that producers will need 4 hours to establish a system 
for organizing records to carryout the purposes of these regulations. 
This additional time would be required to modify existing recordkeeping 
systems to incorporate any added information needed to substantiate 
country of origin claims. Although not all fish and shellfish products 
ultimately will be sold at retail establishments covered by this 
interim final rule, we assume that virtually all producers will wish to 
keep their marketing options as flexible as possible. Thus, we assume 
that all harvesters and producers of covered fish and shellfish 
commodities will establish recordkeeping systems sufficient to 
substantiate country of origin and method of production claims. We also 
recognize that some operations will require substantially more than 4 
hours to establish their recordkeeping systems. Overall, we believe 
that 4 hours represents a reasonable estimate of the average additional 
time that will be required across all types of harvesters and 
producers.
    In estimating initial recordkeeping costs, we used 2001 wage rates 
and benefits published by the Bureau of Labor statistics from the 
National Compensation Survey. Subsequently, the National Compensation 
Survey has been updated and 2002 wage rates and benefits are now 
available. These updated wage rates and benefits are used in estimating 
the interim final recordkeeping costs and results in an increase in the 
estimated costs.
    For harvesters and producers, we assume that the added work needed 
to initially set up a recordkeeping system for country of origin and 
method of production (wild or farm-raised) information is primarily a 
bookkeeping task. This task may be performed by independent 
bookkeepers, or in the case of operations that perform their own 
bookkeeping, will require equivalent skills. The Bureau of Labor 
Statistics (BLS) (Ref. 11) publishes wage rates for bookkeepers, 
accounting, and auditing clerks. We assume that this wage rate 
represents the cost for producers to hire an independent bookkeeper. In 
the case of producers who currently perform their own bookkeeping, we 
assume that this wage rate represents the opportunity cost of the 
producers' time for performing these tasks. The July 2002 wage rate, 
the most recent data available, is estimated at $13.62 per hour. For 
this analysis, an additional 27.5 percent is added to the wage rate to 
account for total benefits which includes social security, unemployment 
insurance, workers compensation, etc. The estimate of this additional 
cost to employers is published by the BLS (Ref. 11). At 4 hours per 
firm and a cost of $17.37 per hour, initial recordkeeping costs to 
harvesters and producers are estimated at approximately $5.6 million to 
modify existing recordkeeping systems in order to substantiate country 
of origin and method of production (wild or farm-raised) claims.
    The recordkeeping burden on handlers, processors, wholesalers, and 
retailers is expected to be more complex than the burden most producers 
face. These operations will need to maintain country of origin and 
method of production (wild and/or farm-raised) information on the 
covered commodities purchased and subsequently furnish that information 
to the next participant in the supply chain. This will require adding 
additional information to a firm's bills of lading, invoices, or other 
records associated with movement of covered commodities from purchase 
to sale. Similar to harvesters and producers, however, we believe that 
most of these operations already maintain many of the types of 
necessary records in their existing systems. Thus, we assume that 
country of origin and method of production (wild and/or farm-raised) 
information will require only modification of existing recordkeeping 
systems rather than development of entirely new systems.
    The Label Cost Model Developed for FDA by RTI International (Refs. 
12 and 13) is used to estimate the cost of including additional country 
of origin and method of production (wild and/or farm-raised) 
information to an operation's records. We assume a limited information, 
one-color redesign of a paper document will be sufficient to comply 
with the interim final rule's recordkeeping requirements. The number of 
hours required to complete the redesign is estimated to be 29 with an 
estimated cost at $1,309 per firm. While the cost will be much higher 
for some firms and lower for others, we believe that $1,309 represents 
a reasonable estimate of average cost for all firms. We thus estimate 
that the initial recordkeeping costs to intermediaries such as 
handlers, processors, and wholesalers (importers are included with 
wholesalers) will be approximately $8.7 million, and initial 
recordkeeping costs at retail will be approximately $5.9 million. The 
initial recordkeeping cost to intermediaries declines from the initial 
recordkeeping cost estimate in the proposed rule due to the reduction 
in the number of affected intermediaries associated with commodities 
other than fish and shellfish. The total initial recordkeeping costs 
for all firms are thus estimated at approximately $20 million.
    In addition to these one-time costs to establish recordkeeping 
systems, enterprises will incur additional recordkeeping costs 
associated with storing and maintaining records. These costs are 
referred to as maintenance costs in Table 8. Again, the marginal cost 
for harvesters and producers to maintain and store any additional 
information needed to substantiate country of origin and method of 
production (wild or farm-raised) claims is expected to be relatively 
small.
    For wild fish harvesters, country of origin and method of 
production (wild) generally is established at the time that the product 
is harvested, and thus there is no need to track country of origin and 
method of production information throughout the production lifecycle of 
the product. This group of producers is estimated to require an 
additional 4 hours a year, or 1 hour per quarter, to maintain country 
of origin and method

[[Page 59741]]

of production information. Maintenance costs for fish harvesters are 
estimated to be $3.4 million.
    Compared to wild fish harvesters, we expect that fish farmers will 
incur higher costs to maintain country of origin and method of 
production (farm-raised) information. Wild fish are generally harvested 
once and then shipped by the producer to the first handler. In 
contrast, farm-raised fish and shellfish can and often do move through 
several geographically dispersed operations prior to final sale for 
processing. Fish and shellfish may be acquired from other countries by 
U.S. producers, complicating the task of tracking country of origin and 
method of production information. Because farmed fish and shellfish may 
change ownership several times prior to harvest, will need to be 
maintained to substantiate country of origin information as the animals 
move through their lifecycle. Thus, we expect that the recordkeeping 
burden for fish and shellfish farmers will be higher than it will be 
for harvesters of wild fish and shellfish. We estimate that these 
producers will require an additional 12 hours a year, or 1 hour per 
month, to maintain country of origin and method of production records. 
Again, this is an average for all enterprises. Some will require 
substantially more time, while others will require little additional 
time to maintain country of origin and method of production 
information.
    We assume that farm labor will primarily be responsible for 
maintaining country of origin information at producers' enterprises. 
NASS data (Ref. 14) are used to estimate average farm wage rates--$8.62 
per hour for livestock workers. (Wage rates for fish workers were 
unavailable, so the average wage rate for livestock workers is used.) 
Applying the rate of 27.5 percent to account for benefits results in an 
hourly rate of $10.99 for livestock workers. Assuming 12 hours of labor 
per year for farmed fish operations results in estimated annual 
maintenance costs to producers of $467,000 which is slightly higher 
than the estimated maintenance costs in the proposed rule for this 
group of producers. The increase in the estimated maintenance cost is 
due to the higher estimated benefits.
    We expect that intermediaries such as handlers, processors, and 
wholesalers will face higher costs per enterprise to maintain country 
of origin and method of production (wild and/or farm-raised) 
information compared to costs faced by producers. Much of the added 
cost is attributed to the larger average size of these enterprises 
compared to the average producer enterprise. In addition, these 
intermediaries will need to track products both coming into and going 
out of their businesses.
    We estimate the maintenance burden hours for country of origin and 
method of production (wild and/or farm-raised) recordkeeping to be 52 
hours per year per establishment for fresh and frozen seafood 
processors and fish and seafood wholesalers. For general line grocery 
wholesalers, we estimate the maintenance burden hours to be 12 hours 
per year per establishment. The burden estimate for general line 
grocery wholesalers is reduced from the 52 hours estimated in the 
proposed rule because fish and shellfish represent only a portion of 
the commodities handled by these establishments.
    Maintenance activities will include inputting, tracking, and 
storing country of origin and method of production (wild and/or farm-
raised) information for each covered fish and shellfish commodity. 
Since this is mostly an administrative task, we estimate the cost using 
the July 2002 BLS wage rate from the National Compensation Survey for 
administrative support occupations ($13.41 per hour with an additional 
27.5 percent added to cover overhead costs for a total of $17.10 per 
hour). This occupation category includes stock and inventory clerks and 
record clerks. Coupled with the assumed hours per establishment, the 
resulting total annual maintenance costs to handlers, processors, and 
wholesalers and other intermediaries are estimated at approximately 
$4.0 million.
    Retailers will need to supply country of origin and method of 
production (wild and/or farm-raised) information for each covered fish 
and shellfish commodity sold at each store. Therefore, additional 
recordkeeping maintenance costs are believed to impact each 
establishment. Because fish and shellfish represent only a portion of 
the covered commodities included in the proposed rule, estimated 
recordkeeping maintenance burden is lowered from 365 hours to 26 hours 
per year per retail establishment. This represents 30 minutes per week. 
Using the BLS wage rate for administrative support occupations ($13.41 
per hour with an additional 27.5 percent added to cover overhead costs 
for a total of $17.10 per hour) results in total estimated annual 
maintenance costs to retailers of $16.5 million.
    The total maintenance recordkeeping costs for all producer, 
intermediary, and retail enterprises are thus estimated at 
approximately $24.4 million.
    The total first-year recordkeeping burden is calculated by summing 
the initial and maintenance costs. The total recordkeeping costs are 
estimated for harvesters and producers at approximately $9.4 million; 
for handlers, processors, and wholesalers at approximately $12.8 
million; and for retailers at approximately $22.4 million. We estimate 
the total recordkeeping cost for all participants in the supply chain 
for covered fish and shellfish commodities at $44.6 million for the 
first year, with subsequent maintenance costs of $24.4 million per 
year.
    Annual Reporting and Recordkeeping Burden for the First Year 
(Initial): Public reporting burden for this initial recordkeeping set 
up is estimated to average 7.1 hours per year per individual 
recordkeeper.
    Estimated Number of Firms Recordkeepers: 91,213.
    Estimated Total Annual Burden: 644,202 hours.
    Annual Reporting and Recordkeeping Burden (Maintenance):
    Public reporting burden for this recordkeeping storage and 
maintenance is estimated to average 12.4 hours per year per individual 
recordkeeper.
    Estimated Number of Establishments Recordkeepers: 124,794.
    Estimated Total Annual Burden: 1,551,696 hours.
    AMS is committed to implementation of the Government Paperwork 
Elimination Act (GPEA) to provide the public with the option to submit 
or transact business electronically to the extent practicable. This new 
information collection has no forms and is only for recordkeeping 
purposes. Therefore, the provisions of an electronic submission 
alternative is not required by GPEA.
    AMS is soliciting comments from all interested parties concerning 
these recordkeeping requirements. Comments are specifically invited on: 
(1) Whether the recordkeeping is necessary for the proper operation of 
this program, including whether the information would have practical 
utility; (2) the accuracy of USDA's estimate of the burden of the 
recordkeeping requirements, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the records to be maintained; and (4) ways to minimize the 
burden of the recordkeeping on those who are to maintain and/or make 
the records available, including the use of appropriate automated, 
electronic, mechanical, or other technological recordkeeping techniques 
or other forms of information technology. Comments concerning the 
recordkeeping requirements contained in this interim final rule should 
reference the date and page number of this issue of the Federal

[[Page 59742]]

Register and should be sent to Country of Origin Labeling Program, Room 
2092-S; Agricultural Marketing Service (AMS), USDA; STOP 0249; 1400 
Independence Avenue, SW., Washington, DC 20250-0249, or by facsimile to 
(202) 720-3499, or by e-mail to <a href="/cdn-cgi/l/email-protection#0b686464674b7e786f6a256c647d"><span class="__cf_email__" data-cfemail="23404c4c4f63565047420d444c55">[email protected]</span></a>.
    Comments sent to the above location should also be sent to the Desk 
Officer for Agriculture, Office of Information and Regulatory Affairs, 
Office of Management and Budget, New Executive Office Building, 725 
17th Street, NW., Room 725, Washington, DC 20503. All responses to this 
action will be summarized and included in the request for OMB approval. 
All comments will become a matter of public record.

References

    1. ERS, USDA. Food Consumption (Per Capita) Data System, http://www.ers.usda.gov/data/FoodConsumption/.
    2. NMFS, NOAA, U.S. Dept. of Commerce. Fisheries of the United 
States 2001. September 2002.
    3. FAS, USDA. U.S. Trade Internet System, http://www.fas.usda.gov/ustrade/.
    4. NMFS, NOAA, U.S. Dept. of Commerce. National Seafood 
Consumption Survey.
    5. ERS, USDA. Food CPI, Prices and Expenditures: Sales of Food 
at Home by Type of Outlet, www.ers.usda.gov/Briefing/CPIFoodAndExpenditures/Data/table16.htm.
    6. U.S. Census Bureau. 1997 Economic Census. Retail Trade 
Subject Series. Establishment and Firm Size. EC97R44S-SZ. Issued 
October 2000.
    7. AMS, USDA. Perishable Agricultural Commodities Act database.
    8. U.S. Census Bureau. 2000 Statistics of U.S. Businesses.
    9. NASS, USDA. 1998 Census of Aquaculture.
    10. U.S. Census Bureau. 2000 Nonemployer Statistics.
    11. Bureau of Labor Statistics, Department of Labor, National 
Compensation Survey, 3rd quarter 2003, Employer Cost for Employee 
Compensation.
    12. Food and Drug Administration. ``Establishment and 
Maintenance of Records Under the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002,'' proposed rule. 
May 9, 2003.
    13. RTI, International 2000. FDA Labeling Cost Model: Final 
Report. Revised April 2002.
    14. NASS, USDA. Farm Labor, August 15, 2003.

Executive Order 12988

    The contents of this rule were reviewed under Executive Order 
12988, Civil Justice Reform. This rule is not intended to have a 
retroactive effect. States and local jurisdictions are preempted from 
creating or operating country of origin labeling programs for the 
commodities specified in the Act and these regulations. With regard to 
other Federal statutes, all labeling claims made in conjunction with 
this regulation must be consistent with other applicable Federal 
requirements. There are no administrative procedures that must be 
exhausted prior to any judicial challenge to the provisions of this 
rule.

Civil Rights Review

    AMS considered the potential civil rights implications of this rule 
on minorities, women, or persons with disabilities to ensure that no 
person or group shall be discriminated against on the basis of race, 
color, national origin, gender, religion, age, disability, sexual 
orientation, marital or family status, political beliefs, parental 
status, or protected genetic information. This review included persons 
that are employees of the entities that are subject to these 
regulations. This interim final rule does not require affected entities 
to relocate or alter their operations in ways that could adversely 
affect such persons or groups. Further, this rule will not deny any 
persons or groups the benefits of the program or subject any persons or 
groups to discrimination.

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
Federalism. This Order directs agencies to construe, in regulations and 
otherwise, a Federal statute to preempt State law only where the 
statute contains an express preemption provision or there is some other 
clear evidence to conclude that the Congress intended preemption of 
State law, or where the exercise of State authority conflicts with the 
exercise of Federal authority under the Federal statute. This rule is 
required by the Farm Bill. While this statute does not contain an 
express preemption provision, it is clear from the language in the 
statute that Congress intended preemption of State law.
    Several States have implemented mandatory programs for country of 
origin labeling of certain commodities. For example, Alabama, Arkansas, 
Mississippi, and Louisiana have origin labeling requirements for 
certain seafood products. Other States including Wyoming, Idaho, North 
Dakota, South Dakota, Louisiana, Kansas, and Mississippi have origin 
labeling requirements for certain meat products. In addition, the State 
of Florida and the State of Maine have origin labeling requirements for 
fresh produce items.
    To the extent that these State country of origin labeling programs 
encompass commodities which are not governed by this regulation, the 
States may continue to operate them. For those State country of origin 
labeling programs that encompass commodities which are governed by this 
regulation, these programs are preempted. In most cases, the 
requirements contained within this rule are more stringent and 
prescriptive than the requirements of the State programs. With regard 
to consultation with States, as directed by the law, AMS has consulted 
with the States that have country of origin labeling programs. Further, 
States were expressly invited to comment on the proposed regulation as 
it related to existing State programs. No States submitted any comments 
pertaining to this issue.
    This interim final rule contains those provisions of the October 
30, 2003, (68 FR 61944) proposed rule that pertain to fish and 
shellfish covered commodities. Modifications to these provisions have 
been made as discussed herein. The implementation of mandatory COOL for 
all covered commodities except wild and farm-raised fish and shellfish 
has been delayed until September 30, 2006. The provisions for the other 
covered commodities, including muscle cuts of beef (including veal), 
lamb, and pork; ground beef, ground lamb, and ground pork; perishable 
agricultural commodities; and peanuts are not made final in this 
action. In view of the changes made in this interim final rule to fish 
and shellfish covered commodities, interested persons should examine 
provisions concerning their respective covered commodities in light of 
these changes. Assuming that provisions of the interim final rule would 
be applied to all covered commodities, the Agency specifically invites 
comments on the issues described below.
    In this regard, particular attention is drawn to the changes made 
for fish and shellfish with respect to definition of a processed food 
item and recordkeeping. Under this interim final rule, all cooked 
products (e.g., canned fish) are considered processed food items and 
are excluded from labeling under this regulation. Cooked products have 
a character that is different than that of the covered commodity and 
have a somewhat limited functionality. Also excluded under this interim 
final rule are breaded products, which in the case of shrimp can 
account for up to 50 percent of the finished product. In addition, 
retail items that have been given a distinct flavor (e.g., Cajun 
marinated catfish) are also considered processed food items. The Agency 
believes that these exclusions are consistent in that these products 
all have a limited range of use.
    AMS has reduced the recordkeeping retention requirement for 
suppliers and

[[Page 59743]]

centrally-located retail records to one year and reduced the retail 
level record retention requirement to while the product is on hand. In 
addition, the interim final rule clarifies that only those suppliers 
responsible for initiating an origin and method of production claim 
would have to possess records to substantiate those claims (e.g., where 
it was harvested). Intermediate suppliers and retailers would be 
required to have documentation that identifies the product with either 
a lot number or other unique identifier and illustrates the immediate 
previous supplier and subsequent recipient (as applicable) of that 
uniquely identified product. Thus, only origin/production 
identification must travel with the product either on the product 
itself, on the shipping container, or in some other fashion. In 
performing an audit, AMS would be able to track that product back 
through the marketing chain to the supplier responsible for initiating 
the origin/production designation claims.
    With respect to costs, modifications in this interim final rule 
resulted in lower estimates of first-year implementation costs for 
affected entities in the fish and shellfish sector, relative to the 
upper range estimates of first-year implementation costs presented in 
the proposed rule. If applied to the other covered commodities, 
corresponding changes to the proposed rule would result in lowered 
estimates of first-year implementation costs for those commodities 
relative to the upper-range estimates presented in the PRIA. In the 
PRIA, upper-range first-year implementation costs for all covered 
commodities (including fish and shellfish) were estimated at $3.9 
billion. Preliminary analysis suggests that requirements in this 
interim final rule, if applied to all covered commodities, would result 
in a reduction on the order of 20 to 30 percent in estimated first-year 
implementation costs relative to the PRIA upper-range estimate.
    This interim final rule is made effective 180 days after the date 
of publication in the Federal Register. The requirements of this rule 
do not apply to frozen fish or shellfish caught or harvested before 
December 6, 2004. This will allow existing product to clear through the 
channels of commerce and permit AMS to conduct an industry education 
and outreach program concerning the provisions contained within this 
rulemaking.
    Further, pursuant to 5 U.S.C. 553, it is found and determined upon 
good cause that it is impractical, unnecessary, and contrary to the 
public interest to give preliminary notice prior to putting this rule 
into effect. This action is authorized under the Agricultural Marketing 
Act of 1946, as amended. After issuance of a proposed rule, the 
Department has decided to provide further opportunity to comment due to 
the changes made as a result of comments received and the cost 
associated with this rule. Further, this rule provides for a 90-day 
comment period.

List of Subjects in 7 CFR Part 60

    Agricultural commodities, Fish, Food labeling, Reporting and 
recordkeeping requirements.

0
For the reasons set forth in the preamble, 7 CFR chapter I is amended 
by adding part 60 to read as follows:

PART 60--COUNTRY OF ORIGIN LABELING FOR FISH AND SHELLFISH

Subpart A--General Provisions

Definitions

Sec.
60.101 Act.
60.102 AMS.
60.103 [Reserved]
60.104 Consumer package.
60.105 Covered commodity.
60.106 Farm-raised fish.
60.107 Food service establishment.
60.108-60.110 [Reserved]
60.111 Hatched.
60.112 Ingredient.
60.113 [Reserved]
60.114 Legibly.
60.115 [Reserved]
60.116 Person.
60.117 [Reserved]
60.118 [Reserved]
60.119 Processed food item.
60.120 [Reserved]
60.121 [Reserved]
60.122 Production step.
60.123 Raised.
60.124 Retailer.
60.125 Secretary.
60.126 [Reserved]
60.127 United States.
60.128 United States country of origin.
60.129 USDA.
60.130 U.S. flagged vessel.
60.131 Vessel flag.
60.132 Waters of the United States.
60.133 Wild fish and shellfish.

Country of Origin Notification

60.200 Country of origin notification.
60.300 Markings.

Recordkeeping

60.400 Recordkeeping requirements.
Appendix A to Subpart A--Exclusive Economic Zone and Maritime 
Boundaries; Notice of Limits
Subpart B--[Reserved]

    Authority: 7 U.S.C. 1621 et seq.

Subpart A--General Provisions

Definitions


Sec.  60.101  Act.

    Act means the Agricultural Marketing Act of 1946, (7 U.S.C. 1621 et 
seq.).


Sec.  60.102  AMS.

    AMS means the Agricultural Marketing Service, United States 
Department of Agriculture.


Sec.  60.103  [Reserved]


Sec.  60.104  Consumer package.

    Consumer package means any container or wrapping in which a covered 
commodity is enclosed for the delivery and/or display of such commodity 
to retail purchasers.


Sec.  60.105  Covered commodity.

    (a) Covered commodity means:
    (1) [Reserved]
    (2) [Reserved]
    (3) Farm-raised fish and shellfish (including fillets, steaks, 
nuggets, and any other flesh);
    (4) Wild fish and shellfish (including fillets, steaks, nuggets, 
and any other flesh);
    (5) [Reserved]
    (6) [Reserved]
    (b) Covered commodities are excluded from this part if the 
commodity is an ingredient in a processed food item as defined in Sec.  
60.119.


Sec.  60.106  Farm-raised fish.

    Farm-raised fish means fish or shellfish that have been harvested 
in controlled environments, including ocean-ranched (e.g., penned) fish 
and including shellfish harvested from leased beds that have been 
subjected to production enhancements such as providing protection from 
predators, the addition of artificial structures, or providing 
nutrients; and fillets, steaks, nuggets, and any other flesh from a 
farm-raised fish or shellfish.


Sec.  60.107  Food service establishment.

    Food service establishment means a restaurant, cafeteria, lunch 
room, food stand, saloon, tavern, bar, lounge, or other similar 
facility operated as an enterprise engaged in the business of selling 
food to the public. Similar food service facilities include salad bars, 
delicatessens, 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.


Sec.  60.108-60.110  [Reserved]


Sec.  60.111  Hatched.

    Hatched means emerged from the egg.

[[Page 59744]]

Sec.  60.112  Ingredient.

    Ingredient means a component either in part or in full, of a 
finished retail food product.


Sec.  60.113  [Reserved]


Sec.  60.114  Legibly.

    Legibly means text that can be easily read by a consumer.


Sec.  60.115  [Reserved]


Sec.  60.116  Person.

    Person means any individual, partnership, corporation, association, 
or other legal entity.


Sec.  60.117  [Reserved]


Sec.  60.118  [Reserved]


Sec.  60.119  Processed food item.

    Processed food item means a retail item derived from fish or 
shellfish 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., 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, 
compressing into blocks and cutting into portions). Examples of items 
excluded include fish sticks, surimi, mussels in tomato sauce, seafood 
medley, coconut shrimp, soups, stews, and chowders, sauces, pates, 
salmon that has been smoked, marinated fish fillets, canned tuna, 
canned sardines, canned salmon, crab salad, shrimp cocktail, gefilte 
fish, sushi, and breaded shrimp.


Sec.  60.120  [Reserved]


Sec.  60.121  [Reserved]


Sec.  60.122  Production step.

    Production step means in the case of:
    (a) [Reserved]
    (b) Farm-raised Fish and Shellfish: Hatched, raised, harvested, and 
processed.
    (c) Wild Fish and Shellfish: Harvested and processed.


Sec.  60.123  Raised.

    Raised means in the case of:
    (a) [Reserved]
    (b) Farm-raised fish and shellfish as it relates to the production 
steps defined in Sec.  60.122: the period of time from hatched to 
harvested.


Sec.  60.124  Retailer.

    Retailer means any person licensed as a retailer under the 
Perishable Agricultural Commodities Act of 1930 (7 U.S.C. 499a(b)).


Sec.  60.125  Secretary.

    Secretary means the Secretary of Agriculture of the United States 
or any person to whom the Secretary's authority has been delegated.


Sec.  60.126  [Reserved]


Sec.  60.127  United States.

    United States means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa, 
Guam, the Northern Mariana Islands, and any other Commonwealth, 
territory, or possession of the United States, and the waters of the 
United States as defined in Sec.  60.132.


Sec.  60.128  United States country of origin.

    United States country of origin means in the case of:
    (a) [Reserved]
    (b) [Reserved]
    (c) Farm-raised fish and shellfish: from fish or shellfish hatched, 
raised, harvested, and processed in the United States, and that has not 
undergone a substantial transformation (as established by U.S. Customs 
and Border Protection) outside of the United States.
    (d) Wild-fish and shellfish: from fish or shellfish 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, and 
that has not undergone a substantial transformation (as established by 
U.S. Customs and Border Protection) outside of the United States.
    (e) [Reserved]
    (f) [Reserved]


Sec.  60.129  USDA.

    USDA means the United States Department of Agriculture.


Sec.  60.130  U.S. flagged vessel.

    U.S. flagged vessel means:
    (a) Any vessel documented under chapter 121 of title 46, United 
States Code; or
    (b) Any vessel numbered in accordance with chapter 123 of title 46, 
United States Code.


Sec.  60.131  Vessel flag.

    Vessel flag means the country of registry for a vessel, ship, or 
boat.


Sec.  60.132  Waters of the United States.

    Waters of the United States means those fresh and ocean waters 
contained within the outer limit of the Exclusive Economic Zone (EEZ) 
of the United States as described in Department of State Public Notice 
2237 published in the Federal Register volume 60, No. 163, August 23, 
1995, pages 43825-43829. The Department of State notice is republished 
in appendix A to this subpart.


Sec.  60.133  Wild fish and shellfish.

    Wild fish and shellfish means naturally-born or hatchery-originated 
fish or shellfish released in the wild, and caught, taken, or harvested 
from non-controlled waters or beds; and fillets, steaks, nuggets, and 
any other flesh from a wild fish or shellfish.

Country of Origin Notification


Sec.  60.200  Country of origin notification.

    In providing notice of the country of origin as required by the 
Act, the following requirements shall be followed by retailers:
    (a) General. Labeling of covered commodities offered for sale 
whether individually, in a bulk bin, display case, carton, crate, 
barrel, cluster, or consumer package must contain country of origin and 
method of production information (wild and/or farm-raised) as set forth 
in this regulation.
    (b) Exemptions. Food service establishments as defined in Sec.  
60.107 are exempt from labeling under this subpart.
    (c) Exclusions. A covered commodity is excluded from this subpart 
if it is an ingredient in a processed food item as defined in Sec.  
60.119.
    (d) Designation of Method of Production (Wild and/or Farm-Raised). 
Fish and shellfish covered commodities shall also be labeled to 
indicate whether they are wild and/or farm-raised as those terms are 
defined in this regulation.
    (e) Labeling Covered Commodities of United States Origin. A covered 
commodity may only bear the declaration of ``Product of the U.S.'' at 
retail if it meets the definition of United States Country of Origin as 
defined in Sec.  60.128.
    (f) Labeling Imported Products That Have Not Undergone Substantial 
Transformation in the United States. An imported covered commodity 
shall retain its origin as declared to U.S. Customs and Border 
Protection at the time the product entered the United States, through 
retail sale, provided that it has not undergone a substantial 
transformation (as established by U.S.

[[Page 59745]]

Customs and Border Protection) in the United States.
    (g) Labeling Imported Products That Have Subsequently Been 
Substantially Transformed in the United States.
    (1) [Reserved]
    (2) Wild and Farm-Raised Fish and Shellfish: If a covered commodity 
was imported from country X and subsequently substantially transformed 
(as established by U.S. Customs and Border Protection) in the United 
States or aboard a U.S. flagged vessel, such product shall be labeled 
at retail as ``From [country X], processed in the United States.''
    (h) Blended Products (Commingling of the same covered commodity).
    (1) For imported covered commodities that have not subsequently 
been substantially transformed in the United States that are commingled 
with other imported covered commodities that have not been 
substantially transformed in the United States, and/or covered 
commodities of U.S. origin and/or covered commodities as described in 
Sec.  60.200(g), the declaration shall indicate the countries of origin 
for covered commodities in accordance with existing Federal legal 
requirements.
    (2) For imported covered commodities that have subsequently 
undergone substantial transformation in the United States that are 
commingled with other imported covered commodities that have 
subsequently undergone substantial transformation in the United States 
(either prior to or following substantial transformation in the United 
States) and/or U.S. origin covered commodities, the declaration shall 
indicate the countries of origin contained therein or that may be 
contained therein.
    (i) 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 and method of production (wild and/or farm-raised) 
designation either on the sales vehicle or at the time the product is 
delivered to the consumer.


Sec.  60.300  Markings.

    (a) Country of origin declarations and method of production (wild 
and/or farm-raised) designations can either be in the form of a 
placard, sign, label, sticker, band, twist tie, pin tag, or other 
format that provides country of origin and method of production 
information. The country of origin declaration and method of production 
(wild and/or farm-raised) designation may be combined or made 
separately. Except as provided in Sec.  60.200(g) and 60.200(h) of this 
regulation, the declaration of the country(ies) of origin of a product 
shall be listed according to applicable Federal legal requirements. 
Country of origin declarations may be in the form of a check box 
provided it is in conformance with other Federal legal requirements. 
Various forms of the production designation are acceptable, including 
``wild caught'', ``wild'', ``farm-raised'', ``farmed'', or a 
combination of these terms for blended products that contain both wild 
and farm-raised fish or shellfish, provided it can be readily 
understood by the consumer and is in conformance with other Federal 
labeling laws. Designations such as ``ocean caught'', ``caught at 
sea'', ``line caught'', ``cultivated'', or ``cultured'' are not 
acceptable substitutes. Alternatively, method of production (wild and/
or farm-raised) designations may be in the form of a check box.
    (b) The declaration of the country(ies) of origin and method(s) of 
production (wild and/or farm-raised) (e.g., placard, sign, label, 
sticker, band, twist tie, pin tag, or other display) must be placed in 
a conspicuous location, so as to render it likely to be read and 
understood by a customer under normal conditions of purchase.
    (c) The declaration of the country(ies) of origin and the method(s) 
of production (wild and/or farm-raised) may be typed, printed, or 
handwritten provided it is in conformance with other Federal labeling 
laws and does not obscure other labeling information required by other 
Federal regulations.
    (d) 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 and/or 
more than one method of production (wild and farm-raised) provided all 
possible origins and/or methods of production are listed.
    (e) Abbreviations and variant spellings that unmistakably indicate 
the country of origin, such as ``U.K.'' for ``The United Kingdom of 
Great Britain and Northern Ireland'' are acceptable. The adjectival 
form of the name of a country may be used as proper notification of the 
country(ies) 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.
    (f) State or regional label designations are not acceptable in lieu 
of country of origin labeling.

Recordkeeping


Sec.  60.400  Recordkeeping requirements.

    (a) General.
    (1) All records must be legible and may be maintained in either 
electronic or hard copy formats. Due to the variation in inventory and 
accounting documentary systems, various forms of documentation and 
records will be acceptable.
    (2) Upon request by USDA representatives, suppliers and retailers 
subject to this subpart shall make available to USDA representatives, 
records and other documentary evidence that will permit substantiation 
of an origin claim and method(s) of production (wild and/or farm-
raised), in a timely manner during normal hours of business and at a 
location that is reasonable in consideration of the products and firm 
under review.
    (b) Responsibilities of Suppliers.
    (1) Any person engaged in the business of supplying a covered 
commodity to a retailer, whether directly or indirectly, must make 
available information to the buyer about the country(ies) of origin and 
method(s) of production (wild and/or farm-raised), 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 that it identifies 
the product and its country(ies) of origin and method(s) of production, 
unique to that transaction by means of a lot number or other unique 
identifier. In addition, the supplier of a covered commodity that is 
responsible for initiating a country(ies) of origin and method(s) of 
production (wild and/or farm-raised) claim must possess records that 
are necessary to substantiate that claim.
    (2) Any intermediary supplier (i.e., not the supplier responsible 
for initiating a country of origin declaration and designation of wild 
and/or farm-raised) handling a covered commodity that is found to be 
designated incorrectly for country of origin and/or method of 
production (wild and/or farm-raised), shall not be held liable for a 
violation of the Act by reason of the conduct of another if the 
intermediary supplier could not have been reasonably expected to have 
had knowledge of the violation.
    (3) Any person engaged in the business of supplying a covered 
commodity to a retailer, whether directly or indirectly (i.e., 
including but not limited to harvesters, producers, distributors, 
handlers, and processors), must maintain records to establish and

[[Page 59746]]

identify the immediate previous source (if applicable) and immediate 
subsequent recipient of a covered commodity, in such a way that 
identifies the product unique to that transaction by means of a lot 
number or other unique identifier, for a period of 1 year from the date 
of the transaction.
    (4) For an imported covered commodity (as defined in Sec.  
60.200(f)), the importer of record as determined by U.S. Customs and 
Border Protection, must ensure that records: Provide clear product 
tracking from the port of entry into the United States to the immediate 
subsequent recipient and accurately reflect the country of origin and 
method of production (wild and/or farm-raised) of the item as 
identified in relevant CBP entry documents and information systems; and 
must maintain such records for a period of 1 year from the date of the 
transaction.
    (c) Responsibilities of Retailers.
    (1) Records and other documentary evidence relied upon at the point 
of sale to establish a covered commodity's country(ies) of origin and 
designation of wild and/or farm-raised, must be available during normal 
business hours to any duly authorized representative of USDA at the 
facility for as long as the product is on hand. For pre-labeled 
products, the label itself is sufficient evidence on which the retailer 
may rely to establish the product's origin and method(s) of production 
(wild and/or farm-raised).
    (2) Records that identify the retail supplier, the product unique 
to that transaction by means of a lot number or other unique 
identifier, and for products that are not pre-labeled the country of 
origin information and the method(s) of production (wild and/or farm-
raised) must be maintained for a period of 1 year from the date the 
declaration is made at retail. Such records may be located at the 
retailer's point of distribution, warehouse, central offices or other 
off-site location.
    (3) Any retailer handling a covered commodity that is found to be 
designated incorrectly as to country of origin and/or the method of 
production (wild and/or farm-raised), or for frozen fish and shellfish 
covered commodities caught or harvested before December 6, 2004, for 
the date of harvest, shall not be held liable for a violation of the 
Act by reason of the conduct of another if the retailer could not have 
been reasonably expected to have had knowledge of the violation.

Subpart B--[Reserved]

Appendix A to Subpart A--Exclusive Economic Zone and Maritime 
Boundaries; Notice of Limits

    Note: The following notice was originally published at 60 FR 
43825-43829, August 23, 1995.

Department of State

[Public Notice 2237]

Exclusive Economic Zone and Maritime Boundaries; Notice of Limits

    By Presidential Proclamation No. 5030 made on March 10, 1983, 
the United States established an exclusive economic zone, the outer 
limit of which is a line drawn in such a manner that each point on 
it is 200 nautical miles from the baseline from which the breadth of 
the territorial sea is measured.
    The Government of the United States of America has been, is, and 
will be, engaged in consultations and negotiations with governments 
of neighboring countries concerning the delimitation of areas 
subject to the respective jurisdiction of the United States and of 
these countries.
    The limits of the exclusive economic zone of the United States 
as set forth below are intended to be without prejudice to any 
negotiations with these countries or to any positions which may have 
been or may be adopted respecting the limits of maritime 
jurisdiction in such areas. Further, the limits of the exclusive 
economic zone set forth below are without prejudice to the outer 
limit of the continental shelf of the United States where that shelf 
extends beyond 200 nautical miles from the baseline in accordance 
with international law.
    The following notices have been published which have defined the 
United States maritime boundaries and fishery conservation zone 
established March 1, 1977: Public Notice 506, Federal Register, Vol. 
41, No. 214, November 4, 1976, 48619-20; Public Notice 526, Federal 
Register, Vol. 42, No. 44, March 7, 1977, 12937-40; Public Notice 
544, Federal Register, Vol. 42, No. 92, May 12, 1977, 24134; Public 
Notice 4710-01, Federal Register, Vol. 43, No. 7, January 11, 1978, 
1658; Public Notice 585, Federal Register, Vol. 43, No. 7, January 
11, 1978, 1659; Public Notice 910, Federal Register, Vol. 49, No. 
155, August 9, 1984, 31973.
    This Public Notice supersedes all limits defined in the above 
Public Notices.
    Therefore, the Department of State on behalf of the Government 
of the United States hereby announces the limits of the exclusive 
economic zone of the United States of America, within which the 
United States will exercise its sovereign rights and jurisdiction as 
permitted under international law, pending the establishment of 
permanent maritime boundaries by mutual agreement in those cases 
where a boundary is necessary and has not already been agreed.
    Publication of a notice on this subject which is effective 
immediately upon publication is necessary to effectively exercise 
the foreign affairs responsibility of the Department of State. (See 
Title 5 U.S.C. 553(a)(1)(B).)
    Unless otherwise noted, the coordinates in this notice relate to 
the Clarke 1866 Ellipsoid and the North American 1927 Datum (``NAD 
27''). Unless otherwise specified, the term ``straight line'' in 
this notice means a geodetic line.

U.S. Atlantic Coast and Gulf of Mexico

    In the Gulf of Maine area, the limit of the exclusive economic 
zone is defined by straight lines connecting the following 
coordinates: \1\
---------------------------------------------------------------------------

    \1\ The limits of the U.S. exclusive economic zone from points 1 
to 12 in areas adjacent to Canada do not correspond to limits of the 
Canadian fishery zone as defined in the Canada Gazette of January 1, 
1977, due to the dispute between the United States and Canada 
relating to the sovereignty over Machias Seal Island and North Rock. 
The line defined by points 12 through 15 reflects the International 
Court of Justice Award of October 14, 1984, establishing a United 
States-Canada maritime boundary, pursuant to t he Treaty between the 
Government of Canada and the Government of the United States of 
America to Submit to Binding Dispute Settlement the Delimitation of 
the Maritime Boundary in the gulf of Maine Area, TIAS 10204.

    1. 44 deg. 46'35.346'' N., 66 deg. 54'11.253'' W.
    2. 44 deg. 44'41'' N., 66 deg. 56'17'' W.
    3. 44 deg. 43'56'' N., 66 deg. 56'26'' W.
    4. 44 deg. 39'13'' N., 66 deg. 57'29'' W.
    5. 44 deg. 36'58'' N., 67 deg. 00'36'' W.
    6. 44 deg. 33'27'' N., 67 deg. 02'57'' W.
    7. 44 deg. 30'38'' N., 67 deg. 02'38'' W.
    8. 44 deg. 29'03'' N., 67 deg. 03'42'' W.
    9. 44 deg. 25'27'' N., 67 deg. 02'16'' W.
    10. 44 deg. 21'43'' N., 67 deg. 02'33'' W.
    11. 44 deg. 14'06'' N., 67 deg. 08'38'' W.
    12. 44 deg. 11'12'' N., 67 deg. 16'46'' W.
    13. 42 deg. 53'14'' N., 67 deg. 44'35'' W.
    14. 42 deg. 31'08'' N., 67 deg. 28'05'' W.
    15. 40 deg. 27'05'' N., 65 deg. 41'59'' W.

    Between points 15 and 16, the limit of the exclusive economic 
zone is 200 nautical miles seaward from the baseline from which the 
territorial sea is measured.
    In the area of the Blake Plateau, the Straits of Florida, and 
Eastern Gulf of Mexico, the limit of the exclusive economic zone 
shall be determined by straight lines connecting the following 
coordinates: \2\
---------------------------------------------------------------------------

    \2\ The line defined by points 113 through 139 is that line 
delimited in the maritime boundary treaty signed with Cuba December 
16, 1977, Senate Executive H, 96th Cong., 1st Sess. The treaty has 
been applied provisionally since January 1, 1978.

    16. 28 deg. 17'10'' N., 76 deg. 36'45'' W.
    17. 28 deg. 17'10'' N., 79 deg. 11'24'' W.
    18. 27 deg. 52'54'' N., 79 deg. 28'36'' W.
    19. 27 deg. 26'00'' N., 79 deg. 31'38'' W.
    20. 27 deg. 16'12'' N., 79 deg. 34'18'' W.
    21. 27 deg. 11'53'' N., 79 deg. 34'56'' W.
    22. 27 deg. 05'58'' N., 79 deg. 35'19'' W.
    23. 27 deg. 00'27'' N., 79 deg. 35'17'' W.
    24. 26 deg. 55'15'' N., 79 deg. 34'39'' W.
    25. 26 deg. 53'57'' N., 79 deg. 34'27'' W.
    26. 26 deg. 45'45'' N., 79 deg. 32'41'' W.
    27. 26 deg. 44'29'' N., 79 deg. 32'23'' W.
    28. 26 deg. 43'39'' N., 79 deg. 32'20'' W.
    29. 26 deg. 41'11'' N., 79 deg. 32'01'' W.
    30. 26 deg. 38'12'' N., 79 deg. 31'33'' W.
    31. 26 deg. 36'29'' N., 79 deg. 31'07'' W.
    32. 26 deg. 35'20'' N., 79 deg. 30'50'' W.
    33. 26 deg. 34'50'' N., 79 deg. 30'46'' W.
    34. 26 deg. 34'10'' N., 79 deg. 30'38'' W.
    35. 26 deg. 31'11'' N., 79 deg. 30'15'' W.

[[Page 59747]]

    36. 26 deg. 29'04'' N., 79 deg. 29'53'' W.
    37. 26 deg. 25'30'' N., 79 deg. 29'58'' W.
    38. 26 deg. 23'28'' N., 79 deg. 29'55'' W.
    39. 26 deg. 23'20'' N., 79 deg. 29'54'' W.
    40. 26 deg. 18'56'' N., 79 deg. 31'55'' W.
    41. 26 deg. 15'25'' N., 79 deg. 33'17'' W.
    42. 26 deg. 15'12'' N., 79 deg. 33'23'' W.
    43. 26 deg. 08'08'' N., 79 deg. 35'53'' W.
    44. 26 deg. 07'46'' N., 79 deg. 36'09'' W.
    45. 26 deg. 06'58'' N., 79 deg. 36'35'' W.
    46. 26 deg. 02'51'' N., 79 deg. 38'22'' W.
    47. 25 deg. 59'29'' N., 79 deg. 40'03'' W.
    48. 25 deg. 59'15'' N., 79 deg. 40'08'' W.
    49. 25 deg. 57'47'' N., 79 deg. 40'38'' W.
    50. 25 deg. 56'17'' N., 79 deg. 41'06'' W.
    51. 25 deg. 54'03'' N., 79 deg. 41'38'' W.
    52. 25 deg. 53'23'' N., 79 deg. 41'46'' W.
    53. 25 deg. 51'53'' N., 79 deg. 41'59'' W.
    54. 25 deg. 49'32'' N., 79 deg. 42'16'' W.
    55. 25 deg. 48'23'' N., 79 deg. 42'23'' W.
    56. 25 deg. 48'19'' N., 79 deg. 42'24'' W.
    57. 25 deg. 46'25'' N., 79 deg. 42'44'' W.
    58. 25 deg. 46'15'' N., 79 deg. 42'45'' W.
    59. 25 deg. 43'39'' N., 79 deg. 42'59'' W.
    60. 25 deg. 42'30'' N., 79 deg. 42'48'' W.
    61. 25 deg. 40'36'' N., 79 deg. 42'27'' W.
    62. 25 deg. 37'23'' N., 79 deg. 42'27'' W.
    63. 25 deg. 37'07'' N., 79 deg. 42'27'' W.
    64. 25 deg. 31'02'' N., 79 deg. 42'12'' W.
    65. 25 deg. 27'58'' N., 79 deg. 42'11'' W.
    66. 25 deg. 24'03'' N., 79 deg. 42'12'' W.
    67. 25 deg. 22'20'' N., 79 deg. 42'20'' W.
    68. 25 deg. 21'28'' N., 79 deg. 42'08'' W.
    69. 25 deg. 16'51'' N., 79 deg. 41'24'' W.
    70. 25 deg. 15'56'' N., 79 deg. 41'31'' W.
    71. 25 deg. 10'38'' N., 79 deg. 41'31'' W.
    72. 25 deg. 09'50'' N., 79 deg. 41'36'' W.
    73. 25 deg. 09'02'' N., 79 deg. 41'45'' W.
    74. 25 deg. 03'53'' N., 79 deg. 42'30'' W.
    75. 25 deg. 02'58'' N., 79 deg. 42'57'' W.
    76. 25 deg. 00'28'' N., 79 deg. 44'06'' W.
    77. 24 deg. 59'01'' N., 79 deg. 44'49'' W.
    78. 24 deg. 55'26'' N., 79 deg. 45'58'' W.
    79. 24 deg. 44'16'' N., 79 deg. 49'25'' W.
    80. 24 deg. 43'02'' N., 79 deg. 49'39'' W.
    81. 24 deg. 42'34'' N., 79 deg. 50'51'' W.
    82. 24 deg. 41'45'' N., 79 deg. 52'58'' W.
    83. 24 deg. 38'30'' N., 79 deg. 59'59'' W.
    84. 24 deg. 36'25'' N., 80 deg. 03'52'' W.
    85. 24 deg. 33'16'' N., 80 deg. 12'44'' W.
    86. 24 deg. 33'03'' N., 80 deg. 13'22'' W.
    87. 24 deg. 32'11'' N., 80 deg. 15'17'' W.
    88. 24 deg. 31'25'' N., 80 deg. 16'56'' W.
    89. 24 deg. 30'55'' N., 80 deg. 17'48'' W.
    90. 24 deg. 30'12'' N., 80 deg. 19'22'' W.
    91. 24 deg. 30'04'' N., 80 deg. 19'45'' W.
    92. 24 deg. 29'36'' N., 80 deg. 21'06'' W.
    93. 24 deg. 28'16'' N., 80 deg. 24'36'' W.
    94. 24 deg. 28'04'' N., 80 deg. 25'11'' W.
    95. 24 deg. 27'21'' N., 80 deg. 27'21'' W.
    96. 24 deg. 26'28'' N., 80 deg. 29'31'' W.
    97. 24 deg. 25'05'' N., 80 deg. 32'23'' W.
    98. 24 deg. 23'28'' N., 80 deg. 36'10'' W.
    99. 24 deg. 22'31'' N., 80 deg. 38'57'' W.
    100. 24 deg. 22'05'' N., 80 deg. 39'52'' W.
    101. 24 deg. 19'29'' N., 80 deg. 45'22'' W.
    102. 24 deg. 19'14'' N., 80 deg. 45'48'' W.
    103. 24 deg. 18'36'' N., 80 deg. 46 deg. 50'' W.
    104. 24 deg. 18'33'' N., 80 deg. 46'55'' W.
    105. 24 deg. 09'49'' N., 80 deg. 59'48'' W.
    106. 24 deg. 09'46'' N., 80 deg. 59'52'' W.
    107. 24 deg. 08'56'' N., 81 deg. 01'08'' W.
    108. 24 deg. 03'28'' N., 81 deg. 01'52'' W.
    109. 24 deg. 08'24'' N., 81 deg. 01'58'' W.
    110. 24 deg. 07'26'' N., 81 deg. 03'07'' W.
    111. 24 deg. 02'18'' N., 81 deg. 09'06'' W.
    112. 23 deg. 59'58'' N., 81 deg. 11'16'' W.
    113. 23 deg. 55'30'' N., 81 deg. 12'55'' W.
    114. 23 deg. 53'50'' N., 81 deg. 19'44'' W.
    115. 23 deg. 50'50'' N., 81 deg. 30'00'' W.
    116. 23 deg. 50'00'' N., 81 deg. 40'00'' W.
    117. 23 deg. 49'03'' N., 81 deg. 50'00'' W.
    118. 23 deg. 49'03'' N., 82 deg. 00'12'' W.
    119. 23 deg. 49'40'' N., 82 deg. 10'00'' W.
    120. 23 deg. 51'12'' N., 82 deg. 25'00'' W.
    121. 23 deg. 51'12'' N., 82 deg. 40'00'' W.
    122. 23 deg. 49'40'' N., 82 deg. 48'54'' W.
    123. 23 deg. 49'30'' N., 82 deg. 51'12'' W.
    124. 23 deg. 49'22'' N., 83 deg. 00'00'' W.
    125. 23 deg. 49'50'' N., 83 deg. 15'00'' W.
    126. 23 deg. 51'20'' N., 83 deg. 25'50'' W.
    127. 23 deg. 52'25'' N., 83 deg. 33'02'' W.
    128. 23 deg. 54'02'' N., 83 deg. 41'36'' W.
    129. 23 deg. 55'45'' N., 83 deg. 48'12'' W.
    130. 23 deg. 58'36'' N., 84 deg. 00'00'' W.
    131. 24 deg. 09'35'' N., 84 deg. 29'28'' W.
    132. 24 deg. 13'18'' N., 84 deg. 38'40'' W.
    133. 24 deg. 16'39'' N., 84 deg. 46'08'' W.
    134. 24 deg. 23'28'' N., 85 deg. 00'00'' W.
    135. 24 deg. 26'35'' N., 85 deg. 06'20'' W.
    136. 24 deg. 38'55'' N., 85 deg. 31'55'' W.
    137. 24 deg. 44'15'' N., 85 deg. 43'12'' W.
    138. 24 deg. 53'55'' N., 86 deg. 00'00'' W.
    139. 25 deg. 12'25'' N., 86 deg. 33'12'' W.

    Between points 139 and 140, the limit of the exclusive economic 
zone is 200 nautical miles seaward from the baseline from which the 
territorial sea is measured.
    In the central Gulf of Mexico, the limit of the exclusive 
economic zone is determined by straight lines connecting the 
following coordinates: \3\
---------------------------------------------------------------------------

    \3\ The lines defined by points 140-142 and 143-146 reflect the 
exchange of Notes Effecting Agreement on the provisional Maritime 
Boundary with Mexico done on November 24, 1976, TIAS 8805, 29 UST 
196. The U.S.-Mexico Maritime Boundary Treaty, signed on May 4, 
1978, Senate Executive F, 96th Congress, 1st Sess., defines boundary 
using the same turning points.

    140. 25 deg. 41'56.52.88'' N., 88 deg. 23'05.54'' W.
    141. 25 deg. 46'52.00'' N., 90 deg. 29'41.00'' W.
    142. 25 deg. 42'13.05'' N., 91 deg. 05'24.89'' W.

    Between points 142 and 143, the limit of the exclusive economic 
zone is 200 nautical miles seaward from the baseline from which the 
territorial sea is measured.
    In the western Gulf of Mexico, the limit of the exclusive 
economic zone is determined by straight lines connecting the 
following coordinates:

    143. 25 deg. 59'48.28'' N., 93 deg. 26'42.19'' W.
    144. 26 deg. 00'30.00'' N., 95 deg. 39'26.00'' W.
    145. 26 deg. 00'31.00'' N., 96 deg. 48'29.00'' W.
    146. 25 deg. 58'30.57'' N., 96 deg. 55'27.37'' W.

    From point 146, the limit of United States jurisdiction is the 
territorial sea boundary with Mexico established by the United 
States of America and the United Mexican States in Article V(A) and 
annexes of the Treaty to Resolve Pending Boundary Differences and 
Maintain the Rio Grande and Colorado River as the International 
Boundary, signed at Mexico City, November 23, 1970, and entered into 
force April 18, 1972, TIAS No. 7313, 23 UST 371.

U.S. Pacific Coast (Washington, Oregon, and California)

    In the area seaward of the Strait of Juan de Fuca, the limit of 
the exclusive economic zone shall be determined by straight lines 
connecting the points with the following coordinates: \4\
---------------------------------------------------------------------------

    \4\ The limit of the U.S. exclusive economic zone from points 1 
to 17 adjacent to Canada in the area seaward of the Strait of Juan 
de Fuca do not correspond to limits of the Canadian fishery zone as 
defined in the Canada Gazette of January 1, 1977.

    1. 48 deg. 29'37.19'' N., 124 deg. 43'33.19'' W.
    2. 48 deg. 30'11'' N., 124 deg. 47'13'' W.
    3. 48 deg. 30'22'' N., 124 deg. 50'21'' W.
    4. 48 deg. 30'14'' N., 124 deg. 54'52'' W.
    5. 48 deg. 29'57'' N., 124 deg. 59'14'' W.
    6. 48 deg. 29'44'' N., 125 deg. 00'06'' W.
    7. 48 deg. 28'09'' N., 125 deg. 05'47'' W.
    8. 48 deg. 27'10'' N., 125 deg. 08'25'' W.
    9. 48 deg. 26'47'' N., 125 deg. 09'12'' W.
    10. 48 deg. 20'16'' N., 125 deg. 22'48'' W.
    11. 48 deg. 18'22'' N., 125 deg. 29'58'' W.
    12. 48 deg. 11'05'' N., 125 deg. 53'48'' W.
    13. 47 deg. 49'15'' N., 126 deg. 40'57'' W.
    14. 47 deg. 36'47'' N., 127 deg. 11'58'' W.
    15. 47 deg. 22'00'' N., 127 deg. 41'23'' W.
    16. 46 deg. 42'05'' N., 128 deg. 51'56'' W.
    17. 46 deg. 31'47'' N., 129 deg. 07'39'' W.

    Between point 17 and 18, the limit of the exclusive economic 
zone is 200 nautical miles seaward from the baseline from which the 
breadth of the territorial sea is measured. In the area off the 
Southern California coast, the limit of the exclusive economic zone 
shall be determined by straight lines connecting the following 
points: \5\
---------------------------------------------------------------------------

    \5\ The line defined by points 18 through 21 reflect the 
Exchange of Note Effecting Agreement on the Provisional Maritime 
Boundary with Mexico done on November 24, 1976. The U.S.-Mexico 
Maritime Boundary Treaty, signed on May 4, 1978, defines the 
boundary using the same turning points.

    18. 30 deg. 32'31.20'' N., 121 deg. 51'58.37'' W.
    19. 31 deg. 07'58.00'' N., 118 deg. 36'18.00'' W.
    20. 32 deg. 37'37.00'' N., 117 deg. 49'31.00'' W.
    21. 32 deg. 35'22.11'' N., 117 deg. 27'49.42'' W.

    From point 21 to the coast, the limit of United States 
jurisdiction is the territorial sea boundary with Mexico established 
by the United States of America and the United Mexican States in 
Article V(B) and annexes of the Treaty to Resolve Pending Boundary 
Differences and Maintain the Rio Grande and Colorado River as the 
International Boundary, signed at Mexico City, November 23, 1970, 
and entered into force April 18, 1972.

Alaska

    Off the coast of Alaska, in the area of the Beaufort Sea, the 
limit of exclusive economic zone shall be determined by straight 
lines, connecting the following coordinates: \6\
---------------------------------------------------------------------------

    \6\ The limit of the U.S. exclusive economic zone in areas 
adjacent to Canada in the Beaufort Sea do not correspond to limits 
of the Canadian fishery zone, as defined in the Canada Gazette of 
January 1, 1997.


[[Page 59748]]


---------------------------------------------------------------------------

    1. 69 deg. 38'48.88'' N., 140 deg. 59'52.7'' W.
    2. 69 deg. 38'52'' N., 140 deg. 59'51'' W.
    3. 69 deg. 39'37'' N., 140 deg. 59'01'' W
    4. 69 deg. 40'10'' N., 140 deg. 58'34'' W.
    5. 69 deg. 41'30'' N., 140 deg. 57'00'' W.
    6. 69 deg. 46'25'' N., 140 deg. 49'45'' W.
    7. 69 deg. 47'54'' N., 140 deg. 47'07'' W.
    8. 69 deg. 51'40'' N., 140 deg. 42'37'' W.
    9. 70 deg. 09'26'' N., 140 deg. 19'22'' W.
    10. 70 deg. 11'30'' N., 140 deg. 18'09'' W.
    11. 70 deg. 29'07'' N., 140 deg. 09'51'' W.
    12. 70 deg. 29'19'' N., 140 deg. 09'45'' W.
    13. 70 deg. 37'31'' N., 140 deg. 02'47'' W.
    14. 70 deg. 48'25'' N., 139 deg. 52'32'' W.
    15. 70 deg. 58'02'' N., 139 deg. 47'16'' W.
    16. 71 deg. 01'15'' N., 139 deg. 44'24'' W.
    17. 71 deg. 11'58'' N., 139 deg. 33'58'' W.
    18. 71 deg. 23'10'' N., 139 deg. 21'46'' W.
    19. 72 deg. 12'18'' N., 138 deg. 26'19'' W.
    20. 72 deg. 46'39'' N., 137 deg. 30'02'' W.
    21. 72 deg. 56'49'' N., 137 deg. 34'08'' W.

    Between point 21 and point 22, the limit of the exclusive 
economic zone is 200 nautical miles seaward from the baseline from 
which the territorial sea is measured. In the Chukchi Sea, Bering 
Strait, and northern Bering Sea, the limit of the exclusive economic 
zone shall be determined by straight lines connecting the following 
coordinates: \7\
---------------------------------------------------------------------------

    \7\ The line defined by points 22-59 and 59-87 is that line 
delimited in the maritime boundary treaty signed with the former 
Soviet Union (now applicable to Russia) June 1, 1990, Senate Treaty 
Doc. 102-22, and applied provisionally pending the exchange of 
instruments of ratification, by an exchange of notes effective June 
15, 1990.

    22. 72 deg. 46'29'' N., 168 deg. 58'37'' W.
    23. 65 deg. 30'00'' N., 168 deg. 58'37'' W.
    24. 65 deg. 19'58'' N., 168 deg. 21'38'' W.
    25. 65 deg. 09'51'' N., 169 deg. 44'34'' W.
    26. 64 deg. 59'41'' N., 170 deg. 07'23'' W.
    27. 64 deg. 49'26'' N., 170 deg. 30'06'' W.
    28. 64 deg. 39'08'' N., 170 deg. 52'43'' W.
    29. 64 deg. 28'46'' N., 171 deg. 15'14'' W.
    30. 64 deg. 18'20'' N., 171 deg. 37'40'' W.
    31. 64 deg. 07'50'' N., 172 deg. 00'00'' W.
    32. 63 deg. 59'27'' N., 172 deg. 18'39'' W.
    33. 63 deg. 51'01'' N., 172 deg. 38'13'' W.
    34. 63 deg. 42'33'' N., 172 deg. 55'42'' W.
    35. 63 deg. 34'01'' N., 173 deg. 14'07'' W.
    36. 63 deg. 25'27'' N., 173 deg. 32'27'' W.
    37. 63 deg. 16'50'' N., 173 deg. 50'42'' W.
    38. 63 deg. 08'11'' N., 174 deg. 08'52'' W.
    39. 62 deg. 59'29'' N., 174 deg. 26'58'' W.
    40. 62 deg. 50'44'' N., 174 deg. 44'59'' W.
    41. 62 deg. 41'56'' N., 175 deg. 02'56'' W.
    42. 62 deg. 33'06'' N., 175 deg. 20'48'' W.
    43. 62 deg. 24'13'' N., 175 deg. 38'36'' W.
    44. 62 deg. 15'17'' N., 175 deg. 56'19'' W.
    45. 62 deg. 06'19'' N., 176 deg. 13'59'' W.
    46. 61 deg. 57'18'' N., 176 deg. 31'34'' W.
    47. 61 deg. 48'14'' N., 176 deg. 49'04'' W.
    48. 61 deg. 39'08'' N., 177 deg. 06'31'' W.
    49. 61 deg. 29'59'' N., 177 deg. 23'53'' W.
    50. 61 deg. 20'47'' N., 177 deg. 41'11'' W.
    51. 61 deg. 11'33'' N., 177 deg. 58'26'' W.
    52. 61 deg. 02'17'' N., 178 deg. 15'36'' W.
    53. 60 deg. 52'57'' N., 178 deg. 32'42'' W.
    54. 60 deg. 43'35'' N., 178 deg. 49'45'' W.
    55. 60 deg. 34'11'' N., 179 deg. 06'44'' W.
    56. 60 deg. 24'44'' N., 179 deg. 23'38'' W.
    57. 60 deg. 15'14'' N., 179 deg. 40'30'' W.
    58. 60 deg. 11'39'' N., 179 deg. 46'49'' W.

    Between points 58 and 59 the limit of the exclusive economic 
zone is 200 nautical miles seaward from the baseline from which the 
territorial sea is measured. In the southern Bering Sea and north 
Pacific Ocean, the limit of the exclusive economic zone shall be 
determined the straight lines connecting the following coordinates:

    59. 56 deg. 16'31'' N., 174 deg. 00'19'' E.
    60. 56 deg. 15'07'' N., 173 deg. 56'56'' E.
    61. 56 deg. 04'34'' N., 173 deg. 41'08'' E.
    62. 55 deg. 53'59'' N., 173 deg. 25'22'' E.
    63. 55 deg. 43'22'' N., 173 deg. 09'37'' E.
    64. 55 deg. 32'42'' N., 172 deg. 53'55'' E.
    65. 55 deg. 21'59'' N., 172 deg. 38'14'' E.
    66. 55 deg. 11'14'' N., 172 deg. 22'36'' E.
    67. 55 deg. 00'26'' N., 172 deg. 06'59'' E.
    68. 54 deg. 49'36'' N., 171 deg. 51'24'' E.
    69. 54 deg. 38'43'' N., 171 deg. 35'51'' E.
    70. 54 deg. 27'48'' N., 171 deg. 20'20'' E.
    71. 54 deg. 16'50'' N., 171 deg. 04'50'' E.
    72. 54 deg. 05'50'' N., 170 deg. 49'22'' E.
    73. 53 deg. 54'47'' N., 170 deg. 33'56'' E.
    74. 53 deg. 43'42'' N., 170 deg. 18'31'' E.
    75. 53 deg. 32'46'' N., 170 deg. 05'29'' E.
    76. 53 deg. 21'48'' N., 169 deg. 52'32'' E.
    77. 53 deg. 10'49'' N., 169 deg. 39'40'' E.
    78. 52 deg. 59'48'' N., 169 deg. 26'53'' E.
    79. 52 deg. 48'46'' N., 169 deg. 14'12'' E.
    80. 52 deg. 37'43'' N., 169 deg. 01'36'' E.
    81. 52 deg. 26'38'' N., 168 deg. 49'05'' E.
    82. 52 deg. 15'31'' N., 168 deg. 36'39'' E.
    83. 52 deg. 04'23'' N., 168 deg. 24'17'' E.
    84. 51 deg. 53'14'' N., 168 deg. 12'01'' E.
    85. 51 deg. 42'03'' N., 167 deg. 59'49'' E.
    86. 51 deg. 30'51'' N., 167 deg. 47'42'' E.
    87. 51 deg. 22'15'' N., 167 deg. 38'28'' E.

    From point 87 to point 88, the limit of the exclusive economic 
zone is 200 nautical miles from the baseline from which the 
territorial sea is measured. From point 88, the southern limit of 
the exclusive economic zone off the coast of Alaska shall be 
determined by straight lines connecting the following coordinates: 
\8\
---------------------------------------------------------------------------

    \8\ The limit of the U.S. exclusive economic zone in, and 
seaward of, the Dixon Entrance do not correspond to the limits of 
the Canadian fishery zone, as defined in the Canada Gazette of 
January 1, 1977. Where the claimed boundaries published by the 
United States and Canada leave an unclaimed area within Dixon 
Entrance, the United States will exercise fishery management 
jurisdiction to the Canadian claimed line where that line is 
situated southward of the United States claimed line, until such 
time as a permanent maritime boundary with Canada is established in 
the Dixon Entrance.
---------------------------------------------------------------------------

    88. 53 deg. 28'27'' N., 138 deg. 45'20'' W.
    89. 54 deg. 00'01'' N., 135 deg. 45'57'' W.
    90. 54 deg. 07'30'' N., 134 deg. 56'24'' W.
    91. 54 deg. 12'45'' N., 134 deg. 25'03'' W.
    92. 54 deg. 12'57'' N., 134 deg. 23'47'' W.
    93. 54 deg. 15'40'' N., 134 deg. 10'49'' W.
    94. 54 deg. 20'33'' N., 133 deg. 49'21'' W.
    95. 54 deg. 22'01'' N., 133 deg. 44'24'' W.
    96. 54 deg. 30'06'' N., 133 deg. 16'58'' W.
    97. 54 deg. 31'02'' N., 133 deg. 14'00'' W.
    98. 54 deg. 30'42'' N., 133 deg. 11'28'' W.
    99. 54 deg. 30'10'' N., 133 deg. 07'43'' W.
    100. 54 deg. 30'03'' N., 133 deg. 07'00'' W.
    101. 54 deg. 28'32'' N., 132 deg. 56'28'' W.
    102. 54 deg. 28'25'' N., 132 deg. 55'54'' W.
    103. 54 deg. 27'23'' N., 132 deg. 50'42'' W.
    104. 54 deg. 27'07'' N., 132 deg. 49'35'' W.
    105. 54 deg. 26'00'' N., 132 deg. 44'12'' W.
    106. 54 deg. 24'54'' N., 132 deg. 39'46'' W.
    107. 54 deg. 24'34'' N., 132 deg. 38'16'' W.
    108. 54 deg. 24'39'' N., 132 deg. 26'51'' W.
    109. 54 deg. 24'41'' N., 132 deg. 24'35'' W.
    110. 54 deg. 24'41'' N., 132 deg. 24'29'' W.
    111. 54 deg. 24'52'' N., 132 deg. 23'39'' W.
    112. 54 deg. 21'51'' N., 132 deg. 02'54'' W.
    113. 54 deg. 26'41'' N., 131 deg. 49'28'' W.
    114. 54 deg. 28'18'' N., 131 deg. 45'20'' W.
    115. 54 deg. 30'32'' N., 131 deg. 38'01'' W.
    116. 54 deg. 29'53'' N., 131 deg. 33'48'' W.
    117. 54 deg. 36'53'' N., 131 deg. 19'22'' W.
    118. 54 deg. 39'09'' N., 131 deg. 16'17'' W.
    119. 54 deg. 40'52'' N., 131 deg. 13'54'' W.
    120. 54 deg. 42'11'' N., 131 deg. 13'00'' W.
    121. 54 deg. 46'16'' N., 131 deg. 04'43'' W.
    122. 54 deg. 45'39'' N., 131 deg. 03'06'' W.
    123. 54 deg. 44'12'' N., 130 deg. 59'44'' W.
    124. 54 deg. 43'46'' N., 130 deg. 58'55'' W.
    125. 54 deg. 43'00'' N., 130 deg. 57'41'' W.
    126. 54 deg. 42'34'' N., 130 deg. 57'09'' W.
    127. 54 deg. 42'27'' N., 130 deg. 56'18'' W.
    128. 54 deg. 41'26'' N., 130 deg. 53'39'' W.
    129. 54 deg. 41'21'' N., 130 deg. 53'18'' W.
    130. 54 deg. 41'05'' N., 130 deg. 49'17'' W.
    131. 54 deg. 41'06'' N., 130 deg. 48'31'' W.
    132. 54 deg. 40'46'' N., 130 deg. 45'51'' W.
    133. 54 deg. 40'41'' N., 130 deg. 44'59'' W.
    134. 54 deg. 40'42'' N., 130 deg. 44'43'' W.
    135. 54 deg. 40'03'' N., 130 deg. 42'22'' W.
    136. 54 deg. 39'48'' N., 130 deg. 41'35'' W.
    137. 54 deg. 39'14'' N., 130 deg. 39'18'' W.
    138. 54 deg. 39'54'' N., 130 deg. 38'58'' W.
    139. 54 deg. 41'09'' N., 130 deg. 38'58'' W.
    140. 54 deg. 42'22'' N., 130 deg. 38'26'' W.
    141. 54 deg. 42'47'' N., 130 deg. 38'06'' W.
    142. 54 deg. 42'58'' N., 130 deg. 37'57'' W.
    143. 54 deg. 43'00'' N., 130 deg. 37'55'' W.
    144. 54 deg. 43'15'' N., 130 deg. 37'44'' W.
    145. 54 deg. 43'24'' N., 130 deg. 37'39'' W.
    146. 54 deg. 43'30.15'' N., 130 deg. 37'37.01'' W.

Caribbean Sea

    The seaward limit of the exclusive economic zone around the 
Commonwealth of Puerto Rico and the Virgin Islands of the United 
States is a line 200 nautical miles from the baseline from which the 
breadth of the territorial sea is measured, except that to the east, 
south, and west, the limit of the exclusive economic zone shall be 
determined by straight lines connecting the following coordinates: 
\9\
---------------------------------------------------------------------------

    \9\ The line defined by points 1-50 is that line delimited in 
the maritime boundary treaty signed with the United Kingdom (for the 
British Virgin Islands) at London on November 4, 1993, Senate Treaty 
Doc. 103-23, and entered into force on June 1, 1995. The line 
defined by points 50-51 is that line delimited in the maritime 
boundary treaty signed with the United Kingdom (for Anguilla) at 
London on November 4, 1993, Senate Treaty Doc. 103-23, and entered 
into force June 1, 1995. The line from point 1 to point 51 is on the 
North American Datum 1983 (NAD 83). The line defined by points 57-78 
is that line delimited in the maritime boundary treaty signed with 
Venezuela at Caracas on March 28, 1978; the treaty entered into 
force on November 24, 1980, TIAS 9890, 32 UST 3100.
---------------------------------------------------------------------------

    1. 21 deg. 48'33'' N., 65 deg. 50'31'' W.
    2. 21 deg. 41'20'' N., 65 deg. 49'13'' W.
    3. 20 deg. 58'05'' N., 65 deg. 40'30'' W.
    4. 20 deg. 46'56'' N., 65 deg. 38'14'' W.

[[Page 59749]]

    5. 19 deg. 57'29'' N., 65 deg. 27'21'' W.
    6. 19 deg. 37'29'' N., 65 deg. 20'57'' W.
    7. 19 deg. 12'25'' N., 65 deg. 06'08'' W.
    8. 18 deg. 45'14'' N., 65 deg. 00'22'' W.
    9. 18 deg. 41'14'' N., 64 deg. 59'33'' W.
    10. 18 deg. 29'22'' N., 64 deg. 53'50'' W.
    11. 18 deg. 27'36'' N., 64 deg. 53'22'' W.
    12. 18 deg. 25'22'' N., 64 deg. 52'39'' W.
    13. 18 deg. 24'31'' N., 64 deg. 52'19'' W.
    14. 18 deg. 23'51'' N., 64 deg. 51'50'' W.
    15. 18 deg. 23'43'' N., 64 deg. 51'23'' W.
    16. 18 deg. 23'37'' N., 64 deg. 50'18'' W.
    17. 18 deg. 23'48'' N., 64 deg. 49'42'' W.
    18. 18 deg. 24'11'' N., 64 deg. 49'01'' W.
    19. 18 deg. 24'29'' N., 64 deg. 47'57'' W.
    20. 18 deg. 24'18'' N., 64 deg. 47'00'' W.
    21. 18 deg. 23'14'' N., 64 deg. 46'37'' W.
    22. 18 deg. 22'38'' N., 64 deg. 45'21'' W.
    23. 18 deg. 22'40'' N., 64 deg. 44'42'' W.
    24. 18 deg. 22'42'' N., 64 deg. 44'36'' W.
    25. 18 deg. 22'37'' N., 64 deg. 44'24'' W.
    26. 18 deg. 22'40'' N., 64 deg. 43'42'' W.
    27. 18 deg. 22'30'' N., 64 deg. 43'36'' W.
    28. 18 deg. 22'25'' N., 64 deg. 42'58'' W.
    29. 18 deg. 22'27'' N., 64 deg. 42'28'' W.
    30. 18 deg. 22'16'' N., 64 deg. 42'03'' W.
    31. 18 deg. 22'23'' N., 64 deg. 40'59'' W.
    32. 18 deg. 21'58'' N., 64 deg. 40'15'' W.
    33. 18 deg. 21'51'' N., 64 deg. 38'22'' W.
    34. 18 deg. 21'22'' N., 64 deg. 38'16'' W.
    35. 18 deg. 20'39'' N., 64 deg. 38'32'' W.
    36. 18 deg. 19'16'' N., 64 deg. 38'13'' W.
    37. 18 deg. 19'07'' N., 64 deg. 38'16'' W.
    38. 18 deg. 17'24'' N., 64 deg. 39'37'' W.
    39. 18 deg. 16'43'' N., 64 deg. 39'41'' W.
    40. 18 deg. 11'34'' N., 64 deg. 38'58'' W.
    41. 18 deg. 03'03'' N., 64 deg. 38'03'' W.
    42. 18 deg. 02'57'' N., 64 deg. 29'35'' W.
    43. 18 deg. 02'52'' N., 64 deg. 27'03'' W.
    44. 18 deg. 02'30'' N., 64 deg. 21'08'' W.
    45. 18 deg. 02'31'' N., 64 deg. 20'08'' W.
    46. 18 deg. 02'01'' N., 64 deg. 15'39'' W.
    47. 18 deg. 00'12'' N., 64 deg. 02'29'' W.
    48. 17 deg. 59'58'' N., 64 deg. 01'02'' W.
    49. 17 deg. 58'47'' N., 63 deg. 57'00'' W.
    50. 17 deg. 57'51'' N., 63 deg. 53'53'' W.
    51. 17 deg. 56'37'' N., 63 deg. 53'20'' W.
    52. 17 deg. 39'48'' N., 63 deg. 54'54'' W.
    53. 17 deg. 37'15'' N., 63 deg. 55'11'' W.
    54. 17 deg. 30'28'' N., 63 deg. 55'57'' W.
    55. 17 deg. 11'43'' N., 63 deg. 58'00'' W.
    56. 17 deg. 05'07'' N., 63 deg. 58'42'' W.
    57. 16 deg. 44'49'' N., 64 deg. 01'08'' W.
    58. 16 deg. 43'22'' N., 64 deg. 06'31'' W.
    59. 16 deg. 43'10'' N., 64 deg. 06'59'' W.
    60. 16 deg. 42'40'' N., 64 deg. 08'06'' W.
    61. 16 deg. 41'43'' N., 64 deg. 10'07'' W.
    62. 16 deg. 35'19'' N., 64 deg. 23'39'' W.
    63. 16 deg. 23'30'' N., 64 deg. 45'54'' W.
    64. 15 deg. 39'31'' N., 65 deg. 58'41'' W.
    65. 15 deg. 30'10'' N., 66 deg. 07'09'' W.
    66. 15 deg. 14'06'' N., 66 deg. 19'57'' W.
    67. 14 deg. 55'48'' N., 66 deg. 34'30'' W.
    68. 14 deg. 56'06'' N., 66 deg. 51'40'' W.
    69. 14 deg. 58'27'' N., 67 deg. 04'19'' W.
    70. 14 deg. 58'45'' N., 67 deg. 05'17'' W.
    71. 14 deg. 58'58'' N., 67 deg. 06'11'' W.
    72. 14 deg. 59'10'' N., 67 deg. 07'00'' W.
    73. 15 deg. 02'32'' N., 67 deg. 23'40'' W.
    74. 15 deg. 05'07'' N., 67 deg. 36'23'' W.
    75. 15 deg. 10'38'' N., 68 deg. 03'46'' W.
    76. 15 deg. 11'06'' N., 68 deg. 09'21'' W.
    77. 15 deg. 12'33'' N., 68 deg. 27'32'' W.
    78. 15 deg. 12'51'' N., 68 deg. 28'56'' W.
    79. 15 deg. 46'46'' N., 68 deg. 26'04'' W.
    80. 17 deg. 21'30'' N., 68 deg. 17'53'' W.
    81. 17 deg. 38'01'' N., 68 deg. 16'46'' W.
    82. 17 deg. 50'24'' N., 68 deg. 16'11'' W.
    83. 17 deg. 58'07'' N., 68 deg. 15'52'' W.
    84. 18 deg. 02'28'' N., 68 deg. 15'40'' W.
    85. 18 deg. 06'10'' N., 68 deg. 15'27'' W.
    86. 18 deg. 07'27'' N., 68 deg. 15'33'' W.
    87. 18 deg. 09'12'' N., 68 deg. 14'53'' W.
    88. 18 deg. 17'06'' N., 68 deg. 11'28'' W.
    89. 18 deg. 19'20'' N., 68 deg. 09'40'' W.
    90. 18 deg. 22'42'' N., 68 deg. 06'57'' W.
    91. 18 deg. 24'39'' N., 68 deg. 04'58'' W.
    92. 18 deg. 25'25'' N., 68 deg. 04'09'' W.
    93. 18 deg. 28'08'' N., 68 deg. 00'59'' W.
    94. 18 deg. 31'27'' N., 67 deg. 56'57'' W.
    95. 18 deg. 32'58'' N., 67 deg. 55'07'' W.
    96. 18 deg. 34'34'' N., 67 deg. 52'53'' W.
    97. 18 deg. 54'37'' N., 67 deg. 46'21'' W.
    98. 19 deg. 00'42'' N., 67 deg. 44'25'' W.
    99. 19 deg. 10'00'' N., 67 deg. 41'24'' W.
    100. 19 deg. 19'03'' N., 67 deg. 38'19'' W.
    101. 19 deg. 21'20'' N., 67 deg. 38'01'' W.
    102. 19 deg. 59'45'' N., 67 deg. 31'52'' W.
    103. 20 deg. 00'59'' N., 67 deg. 31'35'' W.
    104. 20 deg. 01'17'' N., 67 deg. 31'29'' W.
    105. 20 deg. 02'49'' N., 67 deg. 31'04'' W.
    106. 20 deg. 03'30'' N., 67 deg. 30'52'' W.
    107. 20 deg. 09'28'' N., 67 deg. 29'11'' W.
    108. 20 deg. 48'18'' N., 67 deg. 17'50'' W.
    109. 21 deg. 22'48'' N., 67 deg. 02'34'' W.
    110. 21 deg. 30'18'' N., 66 deg. 59'05'' W.
    111. 21 deg. 33'47'' N., 66 deg. 57'30'' W.
    112. 21 deg. 51'24'' N., 66 deg. 49'30'' W.

    Navassa Island. The limits of the exclusive economic zone around 
Navassa Island remain to be determined.

Central and Western Pacific

    Northern Mariana Islands and Guam. The seaward limit of the 
exclusive economic zone is 200 nautical miles from the baseline from 
which the breadth of the territorial sea is measured, except that to 
the north of the Northern Mariana Islands, the limit of the 
exclusive economic zone shall be determined by straight lines 
connecting the following points: \10\
---------------------------------------------------------------------------

    \10\ The line defined by points 1-12 constitutes the line of 
delimination between the maritime zones of the United States and 
Japan as reflected in an Exchange of Notes effective July 5, 1994. 
Points 1-12 are on the World Geodetic System 1984 (WGS 84). In this 
regard, users should be aware that the Government of Japan defines 
points 1-12 on the Tokyo Datum and the coordinate values will differ 
slightly from those published in this Notice.
---------------------------------------------------------------------------

    1. 23 deg. 53'35'' N., 145 deg. 05'46'' E.
    2. 23 deg. 44'32'' N., 144 deg. 54'05'' E.
    3. 23 deg. 33'52'' N., 144 deg. 40'23'' E.
    4. 23 deg. 16'11'' N., 144 deg. 17'47'' E.
    5. 22 deg. 50'13'' N., 143 deg. 44'57'' E.
    6. 22 deg. 18'13'' N., 143 deg. 05'02'' E.
    7. 21 deg. 53'58'' N., 142 deg. 35'03'' E.
    8. 21 deg. 42'14'' N., 142 deg. 20'39'' E.
    9. 21 deg. 40'08'' N., 142 deg. 18'05'' E.
    10. 21 deg. 28'21'' N., 142 deg. 03'45'' E.
    11. 20 deg. 58'24'' N., 141 deg. 27'33'' E.
    12. 20 deg. 52'51'' N., 141 deg. 20'54'' E.

and, except that to the south of Guam, the limit of the exclusive 
economic zone shall be determined by straight lines connecting the 
following points:

    13. 11 deg. 38'25'' N., 147 deg. 44'42'' E.
    14. 11 deg. 36'53'' N., 147 deg. 31'03'' E.
    15. 11 deg. 31'48'' N., 146 deg. 55'19'' E.
    16. 11 deg. 27'15'' N., 146 deg. 25'34'' E.
    17. 11 deg. 22'13'' N., 145 deg. 52'36'' E.
    18. 11 deg. 17'31'' N., 145 deg. 22'38'' E.
    19. 11 deg. 13'32'' N., 144 deg. 57'26'' E.
    20. 11 deg. 13'23'' N., 144 deg. 56'29'' E.
    21. 10 deg. 57'03'' N., 143 deg. 26'53'' E.
    22. 10 deg. 57'30'' N., 143 deg. 03'09'' E.
    23. 11 deg. 52'33'' N., 142 deg. 15'28'' E.
    24. 12 deg. 54'00'' N., 141 deg. 21'48'' E.
    25. 12 deg. 54'17'' N., 141 deg. 21'33'' E.
    26. 12 deg. 57'34'' N., 141 deg. 19'17'' E.
    27. 13 deg. 06'32'' N., 141 deg. 12'53'' E.

    Hawaii and Midway Island. The seaward limit of the exclusive 
economic zone is 200 nautical miles from the baselines from which 
the territorial sea is measured.
    Johnston Atoll. The seaward limit of the exclusive economic zone 
is 200 nautical miles from the baselines from which the territorial 
sea is measured.
    American Samoa. The seaward limit of the exclusive economic zone 
shall be determined by straight lines connecting the following 
points: \11\

    \11\ The line defined by points 1-8 is that line delimited in 
the maritime boundary treaty with New Zealand (for Tokelau) signed 
at Atafu on December 2, 1980; this treaty entered into force on 
September 3, 1983, TIAS 10775. The line defined by points 8-32 is 
that line delimited in the maritime boundary treaty with the Cook 
Islands signed at Rarotonga on June 11, 1980; this treaty entered 
into force on September 8, 1983, TIAS 10774. Points 1-32 are on the 
World Geodetic System 1972 (WGS 72).
---------------------------------------------------------------------------

    1. 11 deg. 02'17'' S., 173 deg. 44'48'' W.
    2. 10 deg. 46'15'' S., 173 deg. 03'53'' W.
    3. 10 deg. 25'26'' S., 172 deg. 11'01'' W.
    4. 10 deg. 17'50'' S., 171 deg. 50'58'' W.
    5. 10 deg. 15'17'' S., 171 deg. 15'32'' W.
    6. 10 deg. 10'18'' S., 170 deg. 16'10'' W.
    7. 10 deg. 07'52'' S., 169 deg. 46'50'' W.
    8. 10 deg. 01'26'' S., 168 deg. 31'25'' W.
    9. 10 deg. 12'44'' S., 168 deg. 31'02'' W.
    10. 10 deg. 12'49'' S., 168 deg. 31'02'' W.
    11. 10 deg. 52'31'' S., 168 deg. 29'42'' W.
    12. 11 deg. 02'40'' S., 168 deg. 29'21'' W.
    13. 11 deg. 43'53'' S., 168 deg. 27'58'' W.
    14. 12 deg. 01'55'' S., 168 deg. 10'24'' W.
    15. 12 deg. 28'40'' S., 167 deg. 25'20'' W.
    16. 12 deg. 41'22'' S., 167 deg. 11'01'' W.
    17. 12 deg. 57'51'' S., 166 deg. 52'21'' W.
    18. 13 deg. 11'25'' S., 166 deg. 37'02'' W.
    19. 13 deg. 14'03'' S., 166 deg. 34'03'' W.
    20. 13 deg. 21'25'' S., 166 deg. 25'42'' W.
    21. 13 deg. 35'44'' S., 166 deg. 09'19'' W.
    22. 13 deg. 44'56'' S., 165 deg. 58'44'' W.
    23. 14 deg. 03'30'' S., 165 deg. 37'20'' W.
    24. 15 deg. 00'09'' S., 165 deg. 22'07'' W.
    25. 15 deg. 14'04'' S., 165 deg. 18'29'' W.
    26. 15 deg. 38'47'' S., 165 deg. 12'03'' W.
    27. 15 deg. 44'58'' S., 165 deg. 16'36'' W.
    28. 16 deg. 08'42'' S., 165 deg. 34'12'' W.
    29. 16 deg. 18'30'' S., 165 deg. 41'29'' W.
    30. 16 deg. 23'29'' S., 165 deg. 45'11'' W.
    31. 16 deg. 45'30'' S., 166 deg. 01'39'' W.
    32. 17 deg. 33'28'' S., 166 deg. 38'35'' W.
    33. 17 deg. 31'45'' S., 166 deg. 42'07'' W.
    34. 16 deg. 56'20'' S., 168 deg. 26'05'' W.
    35. 16 deg. 37'55'' S., 169 deg. 18'19'' W.
    36. 16 deg. 37'36'' S., 169 deg. 19'12'' W.
    37. 16 deg. 34'58'' S., 169 deg. 55'59'' W.
    38. 16 deg. 39'17'' S., 170 deg. 19'09'' W.
    39. 16 deg. 48'46'' S., 171 deg. 12'29'' W.
    40. 16 deg. 49'33'' S., 171 deg. 17'03'' W.
    41. 16 deg. 13'29'' S., 171 deg. 37'41'' W.
    42. 16 deg. 04'47'' S., 171 deg. 42'37'' W.

[[Page 59750]]

    43. 15 deg. 58'20'' S., 171 deg. 46'06'' W.
    44. 15 deg. 50'48'' S., 171 deg. 50'23'' W.
    45. 15 deg. 50'12'' S., 171 deg. 50'44'' W.
    46. 15 deg. 14'19'' S., 171 deg. 37'37'' W.
    47. 15 deg. 01'58'' S., 171 deg. 31'37'' W.
    48. 14 deg. 46'48'' S., 171 deg. 24'21'' W.
    49. 14 deg. 27'02'' S., 171 deg. 14'46'' W.
    50. 14 deg. 06'18'' S., 171 deg. 04'48'' W.
    51. 14 deg. 03'28'' S., 171 deg. 03'06'' W.
    52. 14 deg. 03'27'' S., 171 deg. 03'05'' W.
    53. 14 deg. 03'05'' S., 171 deg. 02'53'' W.
    54. 13 deg. 56'54'' S., 170 deg. 59'34'' W.
    55. 13 deg. 54'30'' S., 170 deg. 58'20'' W.
    56. 13 deg. 53'43'' S., 170 deg. 57'57'' W.
    57. 13 deg. 50'40'' S., 170 deg. 56'24'' W.
    58. 13 deg. 13'56'' S., 170 deg. 44'20'' W.
    59. 13 deg. 09'05'' S., 170 deg. 42'39'' W.
    60. 12 deg. 36'18'' S., 170 deg. 30'44'' W.
    61. 12 deg. 36'11'' S., 170 deg. 31'35'' W.
    62. 12 deg. 35'21'' S., 170 deg. 36'26'' W.
    63. 12 deg. 29'47'' S., 171 deg. 08'24'' W.
    64. 12 deg. 27'27'' S., 171 deg. 17'25'' W.
    65. 12 deg. 23'34'' S., 171 deg. 25'18'' W.
    66. 12 deg. 17'36'' S., 171 deg. 37'14'' W.
    67. 12 deg. 14'01'' S., 171 deg. 44'25'' W.
    68. 12 deg. 13'49'' S., 171 deg. 44'47'' W.
    69. 12 deg. 05'27'' S., 172 deg. 00'55'' W.
    70. 11 deg. 54'06'' S., 172 deg. 22'53'' W.
    71. 11 deg. 53'57'' S., 172 deg. 23'09'' W.
    72. 11 deg. 40'49'' S., 172 deg. 48'17'' W.
    73. 11 deg. 26'56'' S., 173 deg. 08'46'' W.
    74. 11 deg. 22'08'' S., 173 deg. 15'50'' W.
    75. 11 deg. 02'28'' S., 173 deg. 44'37'' W.
    76. 11 deg. 02'17'' S., 173 deg. 44'48'' W.

    Palmyra Atoll-Kingman Reef. The seaward limit of the exclusive 
economic zone is 200 nautical miles from the baseline from which the 
territorial sea is measured, except that to the southeast of Palmyra 
Atoll and Kingman Reef the limit of the exclusive economic zone 
shall be determined by straight lines connecting the following 
points:

    1. 7 deg. 55'04'' N., 159 deg. 22'29'' W.
    2. 7 deg. 31'05'' N., 159 deg. 39'30'' W.
    3. 7 deg. 09'43'' N., 159 deg. 54'35'' W.
    4. 6 deg. 33'40'' N., 160 deg. 19'51'' W.
    5. 6 deg. 31'37'' N., 160 deg. 21'18'' W.
    6. 6 deg. 25'31'' N., 160 deg. 25'40'' W.
    7. 6 deg. 03'05'' N., 160 deg. 41'42'' W.
    8. 5 deg. 44'12'' N., 160 deg. 55'13'' W.
    9. 4 deg. 57'25'' N., 161 deg. 28'19'' W.
    10. 4 deg. 44'38'' N., 161 deg. 37'18'' W.
    11. 3 deg. 54'25'' N., 162 deg. 12'56'' W.
    12. 2 deg. 39'50'' N., 163 deg. 05'14'' W.

    Wake Island. The seaward limit of the exclusive economic zone is 
200 nautical miles from the baseline from which the territorial sea 
is measured, except that to the south of Wake Island the limit of 
the exclusive economic zone shall be determined by straight lines 
connecting the following points:

    1. 17 deg. 56'15'' N., 169 deg. 54'00'' E.
    2. 17 deg. 46'02'' N., 169 deg. 31'18'' E.
    3. 17 deg. 37'47'' N., 169 deg. 12'53'' E.
    4. 17 deg. 11'18'' N., 168 deg. 13'30'' E.
    5. 16 deg. 41'31'' N., 167 deg. 07'39'' E.
    6. 16 deg. 02'45'' N., 165 deg. 43'30'' E.

    Jarvis Island. The seaward limit of the exclusive economic zone 
is 200 nautical miles from the baseline from which the territorial 
sea is measured, except that to the north and east of Jarvis Island, 
the limit of the exclusive economic zone shall be determined by 
straight lines connecting the following points:
    1. 2 deg. 01'00'' N., 162 deg. 22'00'' W.
    2. 2 deg. 01'42'' N., 162 deg. 01'35'' W.
    3. 2 deg. 03'20'' N., 161 deg. 41'33'' W.
    4. 2 deg. 02'30'' N., 161 deg. 36'20'' W.
    5. 2 deg. 00'13'' N., 161 deg. 22'24'' W.
    6. 1 deg. 50'18'' N., 160 deg. 20'42'' W.
    7. 1 deg. 45'46'' N., 159 deg. 52'59'' W.
    8. 1 deg. 43'31'' N., 159 deg. 39'27'' W.
    9. 0 deg. 58'53'' N., 158 deg. 59'04'' W.
    10. 0 deg. 46'58'' N., 158 deg. 48'24'' W.
    11. 0 deg. 12'36'' N., 158 deg. 18'06'' W.
    12. 0 deg. 00'17'' S., 158 deg. 07'27'' W.
    13. 0 deg. 24'23'' S., 157 deg. 49'44'' W.
    14. 0 deg. 25'44'' S., 157 deg. 48'43'' W.
    15. 0 deg. 58'15'' S., 157 deg. 24'52'' W.
    16. 2 deg. 13'26'' S., 157 deg. 49'01'' W.
    17. 3 deg. 10'40'' S., 158 deg. 10'30'' W.

    Howland and Baker IslandS., The seaward limit of the exclusive 
economic zone is a line 200 nautical miles from the baseline from 
which the territorial sea is measured, except to the southeast and 
south of Howland and Baker Islands the limit of the exclusive 
economic zone shall be determined by straight lines connecting the 
following points:

    1. 0 deg. 14'30'' N., 173 deg. 08'00'' W.
    2. 0 deg. 14'32'' S., 173 deg. 27'28'' W.
    3. 0 deg. 43'52'' S., 173 deg. 45'30'' W.
    4. 1 deg. 04'06'' S., 174 deg. 17'41'' W.
    5. 1 deg. 12'39'' S., 174 deg. 31'02'' W.
    6. 1 deg. 14'52'' S., 174 deg. 34'48'' W.
    7. 1 deg. 52'36'' S., 175 deg. 34'51'' W.
    8. 1 deg. 59'17'' S., 175 deg. 45'29'' W.
    9. 2 deg. 17'09'' S., 176 deg. 13'58'' W.
    10. 2 deg. 32'51'' S., 176 deg. 38'59'' W.
    11. 2 deg. 40'26'' S., 176 deg. 51'03'' W.
    12. 2 deg. 44'49'' S., 176 deg. 58'01'' W.
    13. 2 deg. 44'53'' S., 176 deg. 58'08'' W.
    14. 2 deg. 56'33'' S., 177 deg. 16'43'' W.
    15. 2 deg. 58'45'' S., 177 deg. 26'00'' W.

    Dated: August 10, 1995.
David A. Colson,
Deputy Assistant Secretary for OceanS., 

    Dated: September 30, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-22309 Filed 9-30-04; 3:00 pm]
BILLING CODE 3410-02-P


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