67372 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Notices

designated recipient of inquiries from

small businesses under SBREFA with

respect to subjects not specified above.

Questions regarding the Commission’s

Rules of Practice and Procedure, 46 CFR

Part 502, do not fall within the scope of

this program and should be directed to

the Office of the Secretary (202–523–

5725). Other requests for assistance from

persons not covered by SBREFA, as in

the past, may be directed, as applicable,

to the Office of the General Counsel

(202–523–5740), Bureau of Enforcement

(202–523–5783), Bureau of Economics

and Agreement Analysis (202–523–

5787) or the Bureau of Tariffs,

Certification and Licensing (202–523–

5796; FMCBTCL@fmc.gov).

Reduction or Waiver Of Civil Penalties

for Violations by Small Business

As stated above, SBREFA (§ 223)

requires that the Commission establish

a policy for reduction or waiver of civil

penalties for statutory or regulatory

violations by small businesses. Within

two years, the Commission must report

to four Congressional Committees on:

(1) The scope of the policy or program;

(2) the number of enforcement actions

that qualified or failed to quality for the

program or policy; and (3) the total

amount of penalty reductions and

waivers granted. SBREFA and its

legislative history suggest certain

approaches, i.e., consider ability to pay;

consider good faith shown by the small

business; require that the violation be

discovered through an agency supported

compliance assistance program; and

allow for violations to be corrected

within a reasonable time. Repeat

offenses or violations involving willful

or criminal conduct are not intended to

be included within the policy.

Reduction of Civil Penalties

The Commission already is subject to

statutory requirements with regard to

civil penalties, including consideration

of a respondent’s ability to pay, as well

as its size and financial condition and

the circumstances of the violation. The

Commission has followed those

requirements in the past and will

continue to do so in the future. In

addition, appropriate records will be

maintained so that the Commission can

fulfill its responsibility to file requisite

reports to Congress.

Voluntary Compliance and Waiver of

Civil Penalties

The Commission has established an

internal policy, to be used in

appropriate cases, to obtain ‘‘voluntary’’

compliance by, and waiver of civil

penalties against, small businesses

found to be violating Commission

statutes or regulations.

Under this program, each subject of

an investigation will be evaluated to

determine whether, in the

circumstances of that particular case, a

demand for civil penalties, or

compliance and waiver of civil

penalties, would be the more effective

regulatory tool. In making this

determination, the following factors will

be considered:

1. Whether the violation was knowing

and willful, involved fraud or financial

gain or caused injury to the public;

2. The subject’s history of prior

offenses;

3. Extent to which the subject

demonstrates a good faith desire to

comply with Commission requirements

in the future; and

4. The subject’s ability to pay a civil

penalty.

Appropriate records will be

maintained in order for the Commission

to fulfill its responsibility for filing

required reports to Congress.

By the Commission.

Ronald D. Murphy,

Assistant Secretary.

[FR Doc. 97–33560 Filed 12–23–97; 8:45 am]

BILLING CODE 6730–01–M

FEDERAL TRADE COMMISSION

[File No. 962–3154]

Honeywell Inc.; Analysis to Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

SUMMARY: The consent agreement in this

matter settles alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaint that accompanies the

consent agreement and the terms of the

consent order—embodied in the consent

agreement—that would settle these

allegations.

DATES: Comments must be received on

or before February 23, 1998.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W.,

Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Linda K. Badger, Federal Trade

Commission, San Francisco Regional

Office, 901 Market Street, Suite 570, San

Francisco, CA 94103. (415) 356–5270.

Kerry O’Brien, Federal Trade

Commission, San Francisco Regional

Office, 901 Market Street, Suite 570, San

Francisco, CA 94103. (415) 356–5270.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and Section 2.34 of the

Commission’s Rules of Practice (16 CFR

2.34), notice is hereby given that the

above-captioned consent agreement

containing a consent order to cease and

desist, having been filed with and

accepted, subject to final approval, by

the Commission, has been placed on the

public record for a period of sixty (60)

days. The following Analysis to Aid

Public Comment describes the terms of

the consent agreement, and the

allegations in the accompanying

complaint. An electronic copy of the

full text of the consent agreement

package can be obtained from the

Commission Actions section of the FTC

Home Page (for December 17, 1997), on

the World Wide Web, at ‘‘http://

www.ftc.gov/os/actions97.htm.’’ A

paper copy can be obtained from the

FTC Public Reference Room, Room H–

130, Sixth Street and Pennsylvania

Avenue, N.W., Washington, D.C. 20580,

either in person or by calling (202) 326–

3627. Public comment is invited. Such

comments or views will be considered

by the Commission and will be available

for inspection and copying at its

principal office in accordance with

Section 4.9(b)(6)(ii) of the Commission’s

Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to

Aid Public Comment

The Federal Trade Commission has

accepted an agreement, subject to final

approval, to a proposed consent order

from respondent Honeywell Inc.

(‘‘Honeywell’’) a Delaware corporation.

The proposed consent order has been

placed on the public record for sixty

(60) days for reception of comments by

interested persons. Comments received

during this period will become part of

the public record. After sixty (60) days,

the Commission will again review the

agreement and the comments received

and will decide whether it should

withdraw from the agreement and take

other appropriate action or make final

the agreement’s proposed order.

Honeywell manufacturers and

markets various types of air cleaning

products, including a line of portable,

room air cleaners. These ‘‘Honeywell

Air Purifiers’’ include an ‘‘enviracaire

True HEPA filter.’’ The Commission’s

complaint charges that respondent’s

advertising for the Honeywell Air

Purifier included unsubstantiated

claims of efficacy and allergy relief.

Specifically, the complaint alleges that

the respondent did not possess adequate
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Notices 67373

substantiation for claims that: (1) The

filter in a Honeywell Air Purifier

removes 99.97% of mold spores, dust

mite allergens, bacteria and viruses from

the air that people breathe under

household living conditions; (2) The

filter in a Honeywell Air Purifier

removes nearly all or 99.97% of

impurities from the air that people

breathe under household living

conditions; (3) Consumers who use a

Honeywell Air Purifier that changes the

air in a room six or more times per hour

will experience noticeable symptom

relief from allergies and other

respiratory problems; and (4) Honeywell

Air Purifiers provide proven relief from

allergy symptoms.

According to the proposed complaint,

the 99.97% figure used in Honeywell’s

advertisement refers to the filter’s

expected efficiency in removing

particles that actually pass through the

filter. While the filter’s efficiency is a

factor in assessing the effectiveness of

an air purifier in particulate removal,

this figure overstates the actual

effectiveness of the air purifier in

removing pollutants from the air in a

user’s environment. The actual

effectiveness of an air purifier,

according to the proposed complaint,

depends on a variety of factors

including, the amount of air that the air

purifier processes, the nature of the

pollutant, and the rate at which the

pollutant is being introduced into the

environment.

Additionally, with respect to the

allergy relief claims made by

Honeywell, the proposed complaint

states that there is no guarantee that an

individual who suffers from allergies or

other respiratory problems will derive a

discernible reduction in symptoms

through the use of these or other air

purifiers. Whether individuals will

derive such relief depends on many

variables including, the source and

severity of their allergies, whether the

allergens at issue tend to remain

airborne, the rate at which the allergens

are emitted into their homes or offices,

and other environmental factors.

The proposed consent order contains

provisions designed to remedy the

violations charged and to prevent the

respondent from engaging in similar

acts and practices in the future.

Part I of the proposed order would

prohibit Honeywell from making certain

efficacy claims about Honeywell Air

Purifiers, enviracaire True HEPA

filters, or any other air cleaning product

which is normally used for personal,

family, or household purposes, unless at

the time of making the claims it

possesses and relies upon competent

and reliable scientific evidence.

Furthermore, claims that state or imply

a level of performance under any set of

conditions, such as household loving

conditions, must be substantiated by

evidence that either relates to such

conditions or that was extrapolated to

such conditions by generally accepted

procedures. The specific claims covered

by Part I include any representation: (1)

about such products’s ability to

eliminate, remove, clear, or clean any

quantity of indoor air contaminants

under household living conditions; and

(2) that such product will perform under

any set of conditions, including

household living conditions.

Part II of the proposed consent order

includes fencing-in relief, requiring that

Honeywell possess competent and

reliable evidence, which when

appropriate must be competent and

reliable scientific evidence, for any

claim about the performance, health or

other benefits, or efficacy of any air

cleaning product which is normally

used for personal, family, or household

purposes.

The proposed order also requires that

respondent to maintain materials relied

upon to substantiate claims covered by

the order; to provide a copy of the

consent agreement to all employees or

representatives involved in the

preparation and placement of the

company’s advertisements, as well as to

all company executives and marketing

and sales managers; to notify the

Commission of any changes in corporate

structure that might affect compliance

with the order; and to file one or more

reports detailing compliance with the

order.

The purpose of this analysis is to

facilitate public comment on the

proposed order. It is not intended to

constitute an official interpretation of

the agreement and proposed order or to

modify in any way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 97–33575 Filed 12–23–97; 8:45 am]

BILLING CODE 6750–01–M

GENERAL ACCOUNTING OFFICE

[GAO/AIMD–98–21.3.1]

Standards for Internal Control in the

Federal Government

AGENCY: General Accounting Office.

ACTION: Notice of document availability.

SUMMARY: The General Accounting

Office (GAO) is seeking public comment

on the proposed ‘‘Standards for Internal

Controls in the Federal Government

dated December 1997.’’ The proposed

standards are being issued to update the

1983 ‘‘Standards for Internal Controls in

the Federal Government.’’ The proposed

standards incorporate the existing

standards and the components of

internal control covered in Internal

Control—Integrated Framework,

Committee of Sponsoring Organizations

of the Treadway Commission (COSO),

September 1992. The proposed

standards are intended to assist program

and financial managers achieve the

internal control objectives of their

organizations. This notice indicates that

the proposed standards are available

from GAO for review and comment.

DATES: Comments must be received by

March 11, 1998.

ADDRESSES: Copies of the internal

control standards draft are available by

(1) pick-up at Document Distribution,

U.S. General Accounting Office, Room

1100, 700 4th Street, NW. (corner of 4th

and G Streets, NW.), Washington, DC;

(2) mail from U.S. General Accounting

Office, P.O. Box 37050, Washington, DC

20013; (3) phone at 202–512–6000 or

FAX 202–512–6061 or TDD 202–512–

2537; or (4) on GAO’s home page (http:/

/www.gao.gov) on the Internet.

Comments should be addressed to the

Robert W. Gramling, Director, Corporate

Audits and Standards, Accounting and

Information Management Division, U.S.

General Accounting Office, 441 G Street

NW., Room 5089, Washington, DC

20548.

FOR FURTHER INFORMATION CONTACT:

Robert W. Gramling, 202–512–9406.

SUPPLEMENTARY INFORMATION: Beginning

with the Accounting and Auditing Act

of 1950, agency heads have been

required to establish and maintain

effective internal control. Since then,

other laws have required renewed focus

on internal control. The Federal

Managers’ Financial Integrity Act

(FMFIA) of 1982, for example, requires

agency heads periodically to evaluate

their systems of internal control, using

the guidance issued by the Office of

Management and Budget, and to prepare

a report on whether their systems

conform to the standards issued by the

GAO. Most recently, the Federal

Financial Management Improvement

Act (FFMIA) of 1996, in focusing on

financial management systems,

identified internal control as an integral

part of those systems. The OMB Circular

A–123, ‘‘Management Accountability

and Control,’’ June 21, 1995, provides

the requirements for assessing controls.

Over the years, GAO has issued

numerous publications to assist

agencies in establishing and

maintaining effective internal control

systems. In 1983, GAO drew on its