[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Rules and Regulations]
[Pages 67444-67458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31392]




[[Page 67443]]

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Part IV





Department of Agriculture





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Food Safety and Inspection Service



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9 CFR Part 301, et al.



Meat and Poultry Inspection; Final Rule and Proposed Rules

Federal Register / Vol. 60, No. 250 / Friday, December 29, 1995 / 
Rules and Regulations

[[Page 67444]]


DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 306, 317, 320, 327, and 381

[Docket No. 92-012F]
RIN 0583-AB92


Prior Labeling Approval System

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is amending the 
Federal meat and poultry products inspection regulations by expanding 
the types of labeling, authorized for use on meat and poultry products 
by official establishments in the United States and foreign 
establishments certified under foreign inspection systems, which would 
not require submittal to FSIS for approval prior to use. In addition, 
FSIS is amending the Federal meat and poultry products inspection 
regulations to permit the submission of only sketch labeling, except 
for temporary approvals, in those instances where labeling is required 
to be submitted for approval and to require retention of certain 
labeling records. This final rule eliminates unnecessary duplication in 
the labeling approval system, and contributes to President Clinton's 
initiatives for greater efficiency in government services, (e.g., it is 
consistent with the principles of the National Performance Review to 
cut red tape, put customers first, and eliminate what is not needed).

EFFECTIVE DATE: July 1, 1996.

FOR FURTHER INFORMATION CONTACT: Ms. Cheryl Wade, Director, Food 
Labeling Division, Regulatory Programs, Food Safety and Inspection 
Service, U.S. Department of Agriculture, Washington, DC 20250, Area 
Code (202) 254-2590.

SUPPLEMENTARY INFORMATION:

Background

Introduction

    The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and 
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.) 
direct the Secretary of Agriculture to maintain meat and poultry 
inspection programs designed to assure consumers that meat and poultry 
products distributed to them (including imports) are safe, wholesome, 
not adulterated, and properly marked, labeled, and packaged.
    Section 2 of the FMIA (21 U.S.C. 602) and section 2 of the PPIA (21 
U.S.C. 451) state that unwholesome, adulterated, or misbranded meat or 
meat food products and poultry products are injurious to the public 
welfare, destroy markets for wholesome, not adulterated, and properly 
marked, labeled, and packaged products, and result in sundry losses to 
producers and processors of meat and poultry products, as well as 
injury to consumers. Therefore, Congress has granted the Secretary 
broad authority to protect consumers' health and welfare. Section 7(d) 
of the FMIA (21 U.S.C. 607(d)) states: ``No article subject to this 
title shall be sold or offered for sale by any person, firm, or 
corporation, in commerce, under any name or other marking or labeling 
which is false or misleading, or in any container of a misleading form 
or size, but established trade names and other marking and labeling and 
containers which are not false or misleading and which are approved by 
the Secretary are permitted.'' The PPIA contains similar language in 
section 8(c) (21 U.S.C. 457(c)).
    Under the latter provisions, the Department has a longstanding 
interpretation of the language to mean that the Secretary of 
Agriculture or his or her representative has the responsibility to 
approve all labels or other labeling to be used on federally inspected 
and imported products prior to the distribution of such products from 
establishments that distribute such products in interstate or foreign 
commerce. Without approved labeling, products may not be sold or 
offered for sale or otherwise distributed in commerce. The term 
``labeling,'' as defined in section 1(p) of the FMIA and section 4(s) 
of the PPIA (21 U.S.C. 601(p) and 453(s), respectively), means all 
labels and other written, printed, or graphic matter (1) upon any 
article or any of its containers or wrappers, or (2) accompanying such 
article.
    The aforementioned provisions also apply to establishments that 
operate solely within designated States. A State is designated if it 
does not have or is not effectively enforcing with respect to 
establishments within its jurisdiction at which livestock or poultry 
are slaughtered, or their carcasses, or products thereof, are prepared 
for use as human food solely for distribution within such State, 
requirements at least equal to titles I and IV of the FMIA and 
specified sections of the PPIA as applicable. Once a State is 
designated, the inspection requirements of the FMIA and PPIA apply to 
establishments that slaughter livestock and poultry and/or prepare or 
process meat and/or poultry products therefrom, solely for distribution 
within the State.
    Section 1(m)(8) of the FMIA (21 U.S.C. 601(m)(8)) and section 
4(g)(8) of the PPIA (21 U.S.C. 453(g)(8)) provide that any carcass, 
part thereof, meat or meat food product or any poultry product is 
adulterated ``* * * if any valuable constituent has been in whole or in 
part omitted or abstracted therefrom; or if any substance has been 
substituted, wholly or in part therefor; or if damage or inferiority 
has been concealed in any manner; or if any substance has been added 
thereto or mixed or packed therewith so as to increase its bulk or 
weight, or reduce its quality or strength, or make it appear better or 
of greater value than it is* * * .'' Furthermore, section 1(n)(1) of 
the FMIA (21 U.S.C. 601(n)(1)) and section 4(h)(1) of the PPIA (21 
U.S.C. 453(h)(1)) prescribe that any carcass, part thereof, meat or 
meat food product or poultry product is considered misbranded if its 
labeling is false or misleading in any particular.
    In order to prevent product adulteration and misbranding, the FMIA 
and PPIA further authorize the Secretary to prescribe, whenever he or 
she determines such action is necessary for the protection of the 
public, (1) the styles and sizes of type to be used with respect to 
material required to be incorporated in labeling to avoid false or 
misleading labeling, and (2) definitions and standards of identity or 
composition for meat and poultry products (section 7(c) of the FMIA, 21 
U.S.C. 607(c), and section 8(b) of the PPIA, 21 U.S.C. 457(b)).

Current Regulations

    The labeling provisions of the meat and poultry products inspection 
regulations specify the required features of meat and poultry product 
labels for immediate containers of domestic product (9 CFR part 317 and 
9 CFR part 381, subpart N) and for imported product (9 CFR part 327 and 
9 CFR part 381, subpart T). These include: (1) The standardized, common 
or usual, or descriptive name of the product; (2) an ingredients 
statement containing the common or usual name of each ingredient listed 
in descending order of predominance; (3) the name and place of business 
of the manufacturer, packer, or distributor; (4) an accurate statement 
of the net quantity of contents; (5) the inspection legend; and (6) 
special handling instructions if product is perishable; i.e., ``Keep 
Frozen'' and ``Keep Refrigerated.'' These essential labeling features 
must be prominently and informatively displayed on the principal 
display panel or the information panel of the product label. 

[[Page 67445]]

    The regulations contain other provisions to ensure that no 
statement, word, picture, design, or device which is false or 
misleading in any particular or conveys any false impression or gives 
any false indication of origin, identity, or quality, appears in any 
marking or other labeling (9 CFR 317.8 and 381.129).
    Any marking or labeling which is determined to be false or 
misleading within the meaning of the FMIA or the PPIA and the 
regulations promulgated thereunder causes the article to which it 
relates to be misbranded, and, pursuant to the authority contained in 
section 7(e) of the FMIA (21 U.S.C. 607(e)) and section 8(d) of the 
PPIA (21 U.S.C. 457(d)), and 9 CFR 335.12 and 381.233 of the Federal 
meat and poultry products inspection regulations, the Administrator, 
FSIS, may withhold the use of such marking or labeling.
    In addition to providing substantive labeling requirements, the 
Federal meat and poultry products inspection regulations provide 
specific information regarding permitted and nonpermitted uses of 
various substances (9 CFR part 318 and part 381, subpart 0). These 
provisions prohibit the use of any food additive, color additive, 
pesticide chemical, or other added poisonous or deleterious substance, 
or any other substance in or on meat and poultry products that would 
cause such articles to be adulterated or misbranded within the meaning 
of the FMIA and PPIA.
    The Federal meat and poultry products inspection regulations also 
prescribe definitions and standards of identity or composition for 
certain meat and poultry products (9 CFR part 319 and part 381, subpart 
P). Standards of composition identify the minimum amount of meat and/or 
poultry required in a product's recipe. Standards of identity set 
specific product requirements for a product's makeup. These standards 
often specify (1) the kind and minimum amount of meat and/or poultry; 
(2) the maximum amount of nonmeat ingredients, such as fat or moisture; 
and (3) any other ingredients allowed or expected in the final product.

Current Prior Label Approval System

    In order to assure that meat and poultry products comply with the 
FMIA and PPIA and the regulations promulgated thereunder, FSIS conducts 
a prior approval program for labels and other labeling as specified in 
9 CFR 317.4, 317.5, 327.14, 327.15, 381.132, 381.134, and 381.205 to be 
used on federally inspected meat and poultry products and imported 
products. This program is administered by the Food Labeling Division 
(FLD), Regulatory Programs, FSIS, in Washington, DC.
    To obtain labeling approval, domestic meat and poultry processors 
and certified foreign establishments, or their representatives, must 
submit final labels and other final labeling, except under certain 
conditions. Such foreign establishments are certified by responsible 
officials of foreign meat and poultry inspection systems, to the 
Department, in accordance with parts 327 and 381, subpart T, of the 
Federal meat and poultry products inspection regulations as fully 
complying with requirements at least equal to those imposed on domestic 
products and establishments. Such foreign establishments are then 
eligible to have their meat and poultry products imported into the 
United States, unless the Administrator terminates their eligibility to 
import products in accordance with parts 327 and 381, subpart T, of the 
Federal meat and poultry products inspection regulations.
    Meat and poultry processors and certified foreign meat 
establishments may submit sketch labeling (a printer's proof or other 
version which clearly shows all required labeling features, size, 
location, and indication of final color), accompanied by FSIS Form 
7234, ``Application for Approval of Labels, Marking or Device,'' to FLD 
for review. Certified foreign poultry establishments are required to 
submit sketch and finished (final) labels of immediate containers for 
review and approval. The labeling application and sketch or final 
printed labeling to be used on domestic meat and poultry products and 
on imported meat products must be submitted to FLD in triplicate. 
Certified foreign poultry establishments must submit two copies of 
sketch and four copies of final labeling to FLD. In addition to the 
required information, any special claims the processor intends to make 
(e.g., quality claims or nutrient content claims) must also be included 
on the labeling. The labeling application must contain the processing 
procedures (sufficient to support the accuracy of the label) and 
handling information, including the following as indicated on the form:
    1. Product name;
    2. Formulation information;
    3. Firm name and address;
    4. How the labeling is to be used;
    5. Size and type of container; and
    6. Size of the principal display panel.
    All such information is reviewed by an FSIS label review specialist 
who is responsible for assuring that the labeling complies with all 
Federal regulations and labeling policies.
    In 1983, the Agency promulgated regulations that granted limited 
labeling approval authority to the inspector-in-charge (IIC) of 
official establishments and established limited types of generically 
approved labeling for official establishments (48 FR 11410). This 
rulemaking did not establish analogous provisions for certified foreign 
establishments. This rulemaking was intended to reduce the number of 
labels and other labeling reviewed and processed by FLD, thereby 
improving the efficiency of the labeling approval system by expediting 
the process for specific types of labeling and reducing the paperwork 
burden on official establishments. As a result of these regulations, 
the IIC currently has authority to approve the types of labeling 
identified in 9 CFR 317.4(e) and 381.132(c), (e.g., labeling for single 
ingredient products without additional claims), provided certain 
requirements are satisfied. However, under current regulations, 
official establishments are not required to submit labeling that comes 
within the categories of labeling the IIC can approve to the IIC for 
approval, but rather have the option of submitting the labeling to FLD 
for approval.
    The regulations also specify limited types of labeling that can be 
approved generically. The generically approved labeling provisions 
allow establishments to make certain modifications to their previously 
approved labeling. These modifications can be designed, developed, 
printed, and applied to a product without submission for approval to 
FSIS, provided the labeling shows all mandatory information in a 
sufficiently prominent manner and is not false or misleading in any 
particular. Generically approved labeling is labeling which contains 
one or more of the modifications identified in 9 CFR 317.5(b) and 
381.134(b), (e.g., all features of the labeling are proportionately 
enlarged or reduced). Under the current regulations, official 
establishments may submit labeling that comes within the generic 
approval category, at their option, to FSIS for approval. The IIC is 
also currently authorized to approve those types of labeling.
    Currently, official establishments may submit sketch labeling to 
FLD for approval, but must submit final labeling to FLD for approval, 
except for generic or IIC approvals. Even though the IIC has the 
authority to approve certain final labeling, many official 
establishments continue to submit all final labeling to FLD for 
approval. 

[[Page 67446]]

    During the development of the 1983 rule, FSIS estimated the number 
of labels and other labeling reviewed by FLD at approximately 130,000. 
During fiscal year 1991, FLD processed approximately 167,500 labels--
87,500 final labels and 60,000 sketch labels were reviewed and 
approved, 20,000 labels were reviewed but not approved, and about 
43,000 labels were approved by IIC's. No records are maintained on 
numbers of temporary approvals, generically approved labels, or 
labeling inserts.
    The continuing increase in the numbers of labels and other labeling 
submitted to FLD and limited Agency resources led to an Agency 
assessment of the prior labeling approval system in 1990. In exploring 
options for an improved labeling approval system, the Agency decided to 
institute a plan to automate the labeling review process and to revise 
internal procedures.

Advance Notice of Proposed Rulemaking

    On March 25, 1992, FSIS published an Advance Notice of Proposed 
Rulemaking (ANPR) (57 FR 10300) on the Agency's prior labeling approval 
system. The ANPR presented the following two options for making 
additional changes to the current prior labeling approval system: (1) 
Revise the current system by significantly reducing the scope of review 
through expanding the categories of generically approved labeling and 
replacing the current general requirement of FSIS approval of sketch 
and final labeling with one for sketch labeling only; and (2) replace 
the current system with a system in which all labeling would be 
generically approved and used without prior submission to FSIS.
    FSIS sought comments on these two options and welcomed comments on 
other options. FSIS also sought comments on the role of the IIC with 
regard to review or enforcement of labeling, and on whether generic 
approval should be provided for labeling that includes geographical, 
quality, health, nutrient content, or negative claims, or guarantees.
    FSIS received 110 comments in response to the ANPR. After review 
and consideration of the comments received on the ANPR, FSIS issued a 
proposed rule which is discussed in the following section.

Proposed Rule

    On November 23, 1993, FSIS published a proposed rule (58 FR 62014) 
to amend the Federal meat and poultry products inspection regulations 
by expanding the types of labeling currently authorized for use on meat 
and poultry products by official establishments in the United States 
and foreign establishments certified under foreign inspection systems 
which would be generically approved. The rule was proposed as a first 
step in the gradual streamlining and modernization of the labeling 
approval system. In the proposal, the Agency sought comments on a long-
term plan to implement an all-generic system.
    Under the proposed rule, official establishments and establishments 
certified by responsible officials of foreign inspection systems would 
be required to submit only sketch labeling in those instances where 
labeling was required to be submitted to FLD for approval. FSIS 
proposed to limit the types of labeling submitted for review and 
approval for domestic and imported products and to revise 9 CFR 317.4, 
317.5, 381.132, 381.133, 327.14, 381.205, and 381.206. No final 
labeling would be approved by FLD, except temporary labeling approvals. 
The proposal defined a sketch label as a printer's proof or equivalent 
which clearly shows all labeling features (as set forth in 9 CFR 317.2 
and part 381, subpart N), as well as size, location, and indication of 
final color and is no larger than 8\1/2\ x 14 inches. The proposed size 
requirement was a result of the Agency's efforts to automate the review 
process and to use scanning technology to record certain information 
from the labeling application. The proposal provided that a parent 
company for a corporation need only submit one labeling application for 
a product produced in other establishments which were owned by the 
corporation. The proposal indicated that this provision for 
corporations would reduce the burdens on the industry and the Agency in 
submitting and revising such applications without posing any apparent 
risk of misbranding. The proposal also provided that once a sketch was 
approved, the establishment would have the authority to print a final 
copy and use the labeling without any further authorization from the 
Agency.
    Also, under the proposed rule, establishments would still be 
required to assure that the labeling was not false or misleading in any 
particular. If an establishment chose to modify an approved sketch, the 
establishment would be authorized to use the final labeling if such 
labeling complied with the requirements proposed in 9 CFR 317.5, 
327.14, 381.133, and 381.205. If the labeling was not in accord with 
these proposed provisions, the labeling would be required to be 
resubmitted as a sketch for approval by FLD.
    FSIS proposed to revise the IIC and generic approval authorities 
prescribed in 9 CFR 317.4(e), 317.5, 381.132(c), and 381.134 to 
alleviate the burden of labeling approval imposed upon IIC's. The IIC 
would retain, however, the authority to approve meat carcass ink brands 
and meat food product ink and burning brands. All other provisions of 9 
CFR 317.4(e), 317.5, 381.132(c), and 381.134 would be combined to 
permit establishments to use final labeling for products in certain 
circumstances without the submission of a sketch to FLD and to use 
final labeling for products for which a sketch had been approved. FSIS 
proposed to add to this authority a few other provisions including the 
permitted use of labeling for standardized products prescribed in 9 CFR 
parts 319 and 381, subpart P, provided such labeling did not contain 
special claims, such as quality claims, nutrient content or health 
claims, geographical origin claims, negative claims, and guarantees, 
and was not a domestic product labeled with a foreign language.
    FSIS proposed to permit official establishments and foreign 
establishments certified by officials of foreign inspection systems to 
use the following generically approved labeling without the submission 
of sketches for approval by FSIS:
    1. Labeling for a product which has a standard of identity or 
composition as specified in 9 CFR part 319 or part 381, subpart P, and 
which does not contain any special claims, such as quality claims, 
nutrient content claims, health claims, negative claims, geographical 
origin claims, or guarantees, or which is not a domestic product 
labeled with a foreign language;
    2. Labeling for single-ingredient products (such as beef steak, 
lamb chops, chicken legs, or turkey breasts) which does not contain 
special claims, such as quality claims, nutrient content claims, health 
claims, negative claims, geographical origin claims, or guarantees, or 
which is not a domestic product labeled with a foreign language;
    3. Labeling for products marked ``For Export Only'' in U.S. 
establishments which does not contain any special claims, such as 
quality claims, nutrient content claims, health claims, negative 
claims, geographical origin claims, or guarantees;
    4. Labeling for containers of meat and meat food products and 
poultry products sold under contract specifications to Federal 
Government agencies, when such product is not offered for sale to the 
general public, provided the contract specifications include specific 
requirements with 

[[Page 67447]]
respect to labeling, and are made available to the IIC;
    5. Labeling for shipping containers which contain fully labeled 
immediate containers, provided such labeling complies with 9 CFR 316.13 
or 381.127.
    6. Labeling for products not intended for human food, provided they 
comply with 9 CFR part 325 or 9 CFR 381.152(c) and 381.193, and 
labeling for poultry heads and feet for export for processing as human 
food if they comply with 9 CFR 381.190(b);
    7. Inspection legends, which comply with 9 CFR parts 312 and 316 
and 9 CFR part 381, subpart M; and
    8. Inserts, tags, liners, pasters, and like devices containing 
printed or graphic matter and for use on, or to be placed within 
containers, and coverings of products, provided such devices contain no 
reference to product and bear no misleading feature.
    The proposed rule would also permit official establishments and 
foreign establishments certified by officials of foreign inspection 
systems to use final labeling, without further authorization from FSIS, 
that was approved by FSIS, FLD, in sketch form if the final labeling 
was prepared without modification or with the following modifications:
    1. All features of the labeling are proportionately enlarged or 
reduced, provided that all minimum size requirements specified in 
applicable regulations are met and the labeling is legible;
    2. A substitution of the abbreviation ``lb.'' for ``pound,'' or 
``oz.'' for ``ounce,'' or of the word ``pound'' for ``lb.'' or 
``ounce'' for ``oz.'';
    3. A master or stock label has been approved from which the name 
and address of the distributor are omitted and such name and address 
are applied before being used (in such case, the words ``prepared for'' 
or similar statement must be shown together with the blank space 
reserved for the insertion of the name and address when such labels are 
offered for approval);
    4. During holiday seasons, wrappers or other covers bearing floral 
or foliage designs or illustrations of rabbits, chicks, fireworks, or 
other emblematic holiday designs are used with approved labeling (the 
use of such designs will not make necessary the application of labeling 
not otherwise required);
    5. A change in the language or the arrangement of directions 
pertaining to the opening of containers or the serving of the product;
    6. The addition, deletion, or amendment of a dated or undated 
coupon, a cents-off statement, cooking instructions, packer product 
code information, or UPC product code information;
    7. Any change in the name or address of the packer, manufacturer or 
distributor that appears in the signature line;
    8. Any change in the net weight, provided the size of the net 
weight statement complies with 9 CFR 317.2 or 381.121;
    9. The addition, deletion, or amendment of recipe suggestions for 
the product;
    10. Any change in punctuation;
    11. Newly assigned or revised establishment numbers for a 
particular establishment for which use of the labeling has been 
approved by the FLD;
    12. The addition or deletion of open dating information;
    13. A change in the type of packaging material on which the label 
is printed;
    14. Brand name changes, provided that there are no design changes, 
the brand name does not use a term that connotes quality or other 
product characteristics, the brand name has no geographic significance, 
and the brand name does not affect the name of the product;
    15. The deletion of the word ``new'' on new product labeling;
    16. The addition, deletion, or amendment of special handling 
statements, such as ``Keep Refrigerated'' or ``Keep Frozen,'' provided 
that the change is consistent with 9 CFR 317.2(k) or 381.125(a);
    17. The addition of safe handling instructions as required by 9 CFR 
317.2(l) or 381.125(b).
    18. Changes reflecting a change in the quantity of an ingredient 
shown in the formula without a change in the order of predominance 
shown on the label, provided that the change in quantity of ingredients 
complies with any minimum or maximum limits for the use of such 
ingredients prescribed in 9 CFR parts 318 and 319, or 9 CFR 381.147 or 
9 CFR part 381, subpart P;
    19. Changes in the color of the labeling, provided that sufficient 
contrast and legibility remain;
    20. The addition, deletion, or substitution of the official USDA 
grade shield on labels of poultry products;
    21. A change in the product vignette, provided the change does not 
affect mandatory labeling information or misrepresent the content of 
the package; or
    22. A change in an establishment number by a corporation or parent 
company for an establishment under its ownership.
    Section 327.15 of the Federal meat inspection regulations (9 CFR 
327.15) requires that all labeling used with outside containers of 
foreign meat product must be approved in accordance with 9 CFR part 
317. However, 9 CFR 381.206 dealing with shipping containers of 
imported poultry products does not include such a provision. FSIS 
proposed to clarify 9 CFR 381.206 to indicate that shipping containers 
of imported poultry products would be approved in accordance with 9 CFR 
part 381, subpart N of the poultry products inspection regulations. 
This is merely a clarification of our labeling approval procedures.
    FSIS proposed to transfer the responsibility of maintaining updated 
generically approved labeling records from the IIC to the official 
establishment in the United States and to require establishments 
certified by officials of a foreign inspection system to maintain such 
records. FSIS also proposed to require establishments to maintain 
records of labeling approved by FLD. In order to monitor compliance of 
regulatory labeling requirements, FSIS proposed that establishments 
maintain records on all labeling used and make such records available 
to any authorized USDA official upon request. Each record would consist 
of a copy of the labeling and the product formulation and processing 
procedure. Under the proposed rule, official establishments would not 
have to present to the IIC a copy of the generically approved labeling 
prior to its use, as is currently required under 9 CFR 317.5 and 
381.134.
    Sections 306.5, 327.24, 381.35 and 381.202(d) of the meat and 
poultry regulations (9 CFR 306.5, 327.24, 381.35, and 381.202(d)) 
specify the appeal procedures to be followed for decisions made by 
program employees or inspectors. These sections also state that denial 
of a labeling application by the IIC or inspector is not a basis for 
appeal under these sections. Since the proposed rule would not maintain 
the IIC's authority to approve labeling applications, there would no 
longer be a need to retain this provision. Therefore, the proposed rule 
proposed to remove these provisions from these sections.
    FSIS proposed to randomly select samples of generically approved 
labeling from official establishments and establishments certified 
under a foreign inspection system in order to determine compliance with 
labeling requirements. If the Agency found that any such labeling was 
false or misleading in any particular, FSIS would initiate the 
proceedings set forth in 9 CFR 335.12 and 381.233 for domestic and 
imported products. 

[[Page 67448]]

    Although FSIS did not propose to change the general authority for 
temporary labeling approvals currently specified in 9 CFR 317.4(d) and 
381.132(b), provisions for temporary approvals were proposed at 9 CFR 
317.4(f)(1) and 381.132(f)(1). FSIS proposed that final labeling 
deficient in some particular could be granted a temporary approval for 
up to 180 days, provided, among other things, that the product was not 
misrepresented. FSIS also proposed that such an approval could be 
extended under certain circumstances. Temporary labeling approval 
requests would continue to be handled the same as sketch labeling 
approvals through submission of labeling applications to FLD.
    FSIS also proposed to remove the provision set forth in 9 CFR 
317.4(b) that required that paper takeoffs of lithographed labels, in 
lieu of sections of the metal containers, be submitted to the Agency 
for approval. This provision was intended to assist producers of canned 
products when submitting final labeling. However, because FLD would no 
longer review final labeling, such provision would no longer be needed.

Alternative Option Considered

    In developing the proposal, FSIS considered the alternative of 
proposing a system where all labeling for domestic and imported 
products would be generically approved. Under this alternative, there 
would not be any labeling review and approval conducted by program 
employees, either at headquarters or in the field. Establishments would 
be authorized to design, develop, print, and apply labeling without any 
submission to FSIS, provided that the labeling complied with existing 
labeling regulations. As with generically approved labeling under the 
proposed rule, establishments would be required to maintain records for 
all labeling. These records would include a copy of the labeling used 
on the product and a record of the product formulation and processing 
procedure. In addition, similar to the proposed rule, under this 
alternative there would be an enhanced sampling program to assure that 
labeling was accurate and not misleading. It was envisioned that this 
sampling program would supplement, but not replace, the existing in-
plant inspection task that directs inspectors of official 
establishments and analogous personnel of certified foreign 
establishments to check a sample of labeling to determine if the 
labeling is correct and used as intended.
    After reviewing the comments received in response to the proposed 
rule (see following discussion), and in light of FSIS' ongoing 
reassessment of its labeling policies, FSIS has decided to proceed, at 
this time, with the gradual streamlining and modernization of the prior 
labeling approval system. Therefore, FSIS will expand the types of 
labeling that will be generically approved, as opposed to instituting 
at this time a system where all labeling would be generically approved. 
FSIS anticipates making further changes after completing the 
reassessment of the prior label approval system.

Discussion of Comments

    FSIS received 122 comments in response to the proposed rule. The 
majority of the comments (88) were submitted by food manufacturers, 
while 13 were received from industry trade associations, 12 from food 
industry consultants, 5 from consumers, 3 from foreign governments, and 
1 from another Federal agency. The following discussion is a summary of 
the major issues and comments received.
1. ``Sketch Only'' System of Approval
    Many commenters supported the streamlining of the current prior 
labeling approval process which would eliminate the need to submit 
final labeling for approval, and which, in turn, would eliminate 
unnecessary duplication in the labeling approval system. However, a few 
commenters opposed a ``sketch only'' system of approval and wanted to 
maintain the existing system of approval. These commenters appeared to 
be concerned about their lack of understanding of all the existing 
labeling regulations and their ability to keep abreast of any future 
changes to the regulations. They expressed concern about the possible 
extent of their liability if a product were misbranded and severity of 
penalties that might occur as a result of an unintentionally misbranded 
product entering the marketplace.
    FSIS believes that requiring a sketch-only system of approval for 
most labeling situations will alleviate unnecessary duplication in the 
labeling approval system. Conformance with labeling policies and 
regulations will be verified when labeling is submitted as a sketch. 
FSIS does not believe it is necessary to reverify conformance of final 
labeling in order to prevent mislabeling of products, and, therefore, 
will permit final labeling that has been approved in sketch form to be 
used without further authorization from FSIS, where the final labeling 
is prepared without modification. Final labeling, however, that is 
altered from the approved sketch must be resubmitted as a ``sketch'' to 
FSIS for approval, unless the changes made to the final labeling 
conform with modifications included in the generic approval category.
    A few commenters suggested that a numbering system, similar to the 
system that is currently used to identify final approved labeling, 
should be developed for sketch approvals when the Agency implements a 
sketch-only system of approval. FSIS intends to assign formal approval 
numbers to approved sketches. The numbering system will be similar to 
the system currently used for final approvals. The sketches will be 
processed and filed permanently for future reference.
2. Printer's Proof for Sketch Approval
    While many commenters supported a sketch-only system of approval, 
in many cases, the support was contingent upon the Agency clarifying 
its definition for a sketch as a ``printer's proof or equivalent.''
    It was not the intent of the Agency to limit sketch submittals 
solely to actual ``printer's proofs.'' FSIS believes that the term 
``equivalent,'' as used in the proposed definition of ``sketch,'' 
conveys that methods of sketch preparation, other than an actual 
``printer's proof,'' would also be acceptable. Accordingly, FSIS will 
accept a printer's proof or equivalent, such as sketches that are hand 
drawn or computer generated or other reasonable facsimiles that clearly 
represent the final version of the labeling. FSIS has added examples of 
what would be considered equivalent to a printer's proof in the final 
regulation. FSIS believes it is appropriate to leave in the phrase ``or 
equivalent'' in order to provide the needed flexibility to meet the 
requirement of submission of a sketch. As FSIS moves to a sketch-only 
system of approval, the Agency believes it is necessary to emphasize 
the importance of submitting sketches prepared in a manner that clearly 
indicates all labeling features, including their size, location, and an 
indication of final colors so that final printed labeling will be 
accurately and correctly prepared.
3. Final Color Indication on Sketches
    A few commenters objected to the need for an indication of final 
color on the sketch. However, after reviewing these comments, FSIS 
believes that these commenters may have believed that the requirement 
of indicating final colors on the sketch meant that FSIS would accept 
only color proofs or color sketches.
    FSIS is not requiring that a color proof or sketch be submitted. 
However, FSIS 

[[Page 67449]]
believes it is necessary to continue to require an indication of final 
color to ensure that the labeling requirements for proper contrast and 
legibility will be met on final printed labeling. In light of the 
comments received, FSIS has clarified the final regulations to make it 
clear that the requirement of indicating final colors can be met in a 
numbers of ways. The requirements of indication of final color may be 
met by: Submission of a color sketch, submission of a sketch which 
indicates by descriptive language the final colors, or submission with 
a sketch of previously approved final labeling that indicates the final 
colors.
4. Size Limitations for Sketch Submittals
    A few commenters objected to the size limitations for sketch 
submittals (i.e., 8\1/2\ x 14 inches) that was proposed in an effort to 
accommodate the expected automation and modernization of the labeling 
approval process.
    Although the Agency continues to move toward a more automated, 
modernized approval system, the Agency is not yet at the stage of 
development that such restrictions are necessary. Therefore, FSIS will 
not limit sketch submittals to the proposed size requirement of no 
larger than 8\1/2\ x 14 inches.
5. Temporary Approval
    Several commenters requested that temporary labeling approval be 
extended beyond 6 months.
    FSIS grants and proposed to continue to grant temporary approval 
for labeling deemed deficient in some particular for a period of time 
not to exceed 6 months, provided that (1) the proposed labeling would 
not misrepresent the product, (2) use of the labeling would not present 
any potential health, safety, or dietary problems to the consumer, (3) 
denial of the request would create undue economic hardship, and (4) an 
unfair competitive advantage would not result from granting the 
temporary approval.
    FSIS continues to believe that changes to labeling that must be 
made as a result of these conditions can be accomplished within a 6-
month timeframe. In certain circumstances, the current and proposed 
regulations allow temporary approvals to be extended beyond the 6-month 
timeframe. Therefore, FSIS has not extended the maximum time granted to 
temporary approval requests beyond that which currently exists in the 
regulations.
6. Expansion of the Generic Label Approval Category
    Commenters concurred with the Agency's proposed expansion of the 
generically approved labeling categories to include those categories of 
labeling presently approved by the IIC. However, most commenters did 
not agree that standardized products should be included in the generic 
category. Commenters stated that not all of the existing product 
standards provide enough guidance to ensure labeling compliance. In 
addition, several commenters stated that few standards are actually 
codified in the Federal meat and poultry products inspection 
regulations, and that numerous informal standards are contained in the 
Standards and Labeling Policy Book.
    Although FSIS acknowledges the concerns expressed, FSIS continues 
to believe that standardized products should be included in the generic 
approval category. Permitting the generic approval of labeling for 
these products will not affect the safety of the products. Consumers 
will continue to receive the information they need about the products 
from the ingredients statement and the Nutrition Facts panel. FSIS' 
prior review of these labels does not provide any additional benefits 
and requires resources that could be used in overseeing other areas 
more directly related to health and safety. In addition, including 
standardized products under generic approvals streamlines and makes 
more efficient the label review process, without compromising product 
safety. Furthermore, this action is consistent with the Agency's focus 
on using resources to reduce actual risks to the public as discussed in 
its February 3, 1995, HACCP proposal.
    FSIS has also determined that standardized products contained in 
the Standards and Labeling Policy book should be eligible for generic 
approval.
    Therefore, FSIS has modified the provison for generic approval of 
standardized products in two ways. First, FSIS will grant manufacturers 
the flexibility to generically approve labeling for standardized 
products found in 9 CFR part 319 or part 381, subpart P, and the 
Standards and Labeling Policy Book, provided such labeling does not 
contain any special claims or the product is not a domestic product 
labeled in a foreign language. Second, FSIS will allow the submission 
of sketch labeling for review and approval if manufacturers so desire. 
FSIS believes that the above modification will alleviate the concerns 
expressed by the commenters.
    FSIS is currently reassessing the role of regulatory and policy 
standards in promoting meat and poultry products with better 
nutritional profiles (e.g., lower in fat and cholesterol). FSIS is also 
currently reassessing its labeling regulations. Additionally, an 
assessment is planned that will involve public input regarding 
modification or elimination of the informal policy standards in the 
Standards and Labeling Policy Book.
    A few commenters expressed concern that labeling prepared for the 
Child Nutrition (CN) Program, conducted by USDA's Food and Nutrition 
Service, would not receive adequate review under the proposed approval 
system and opposed the inclusion of these product labels in the generic 
approval category. FSIS views CN information on the labeling as if it 
were a claim. Therefore, CN labeling will not be included in a generic 
approval category and will require review and sketch approval by FSIS.
    As stated in the proposal, several commenters to the ANPR believed 
that the generic approval category could be expanded beyond those 
situations specifically identified in the ANPR. In the past, FSIS had 
been reluctant to expand the generic approval category further, until 
it could be demonstrated that this method of labeling approval would 
continue to provide the public with accurate, non-misleading labeling 
information. However, these suggestions were brought up again among the 
comments to the proposal. The Agency is now convinced that its present 
position is unnecessarily restrictive and now agrees that there are 
some other labeling categories that should be included in the generic 
approval category which would result in little, if any, risk of 
misbranding. Also, FSIS believes that the scope of some generic 
approval categories should be broadened.
    After reviewing the suggestions presented by the commenters, FSIS 
agrees that it is appropriate to include additional categories of 
labeling under the generic approval category and to broaden the scope 
of some of the generic approval categories. Therefore, the following 
categories of labeling that will be generically approved have been 
either added or broadened in this final rule for the reasons explained 
below.
    a. Quantitative adjustments to the nutrition labeling information, 
except for serving sizes, provided the changes do not affect the 
accuracy and consistency of the nutrition labeling information, (e.g., 
revising the fat content from 10 to 7 grams), for labeling that was 
previously approved by FLD as sketch labeling.
    Meat and poultry companies will periodically need to revise 
nutrition information on their labeling as a result of ongoing 
nutrition monitoring programs. Several commenters 

[[Page 67450]]
recognized that this particular labeling situation was not adequately 
addressed by the nutrition labeling regulations and suggested that 
quantitative nutrition labeling changes could be included in the 
expanded generic approval category.
    FSIS never intended to require manufacturers to resubmit labeling 
for approval to make quantitative changes to the nutrition labeling 
information. Since the manufacturers are responsible for declaring 
accurate nutrition information, FSIS believes that quantitative 
nutrition information labeling changes will have little impact on the 
accuracy of the labeling. Requiring such labeling changes to be 
resubmitted through the approval process would undermine the Agency's 
efforts to streamline the approval process and reduce the volume of 
labeling submitted to FSIS for review. Furthermore, the accuracy of 
nutrition labeling will be monitored through the Agency's planned 
compliance, audit, and sampling activities. However, FSIS does not 
believe that it is appropriate to allow quantitative changes for 
serving sizes to be included in the expanded generic approval category. 
The need to maintain uniform serving sizes for specific products is 
very critical to the overall integrity of the nutrient profile of 
products. Thus, quantitative nutrition information labeling changes, 
except for serving sizes, may be generically approved for labeling that 
was previously approved by FLD as sketch labeling, provided the changes 
in no way render the labeling false or misleading in any particular.
    b. Labeling for consumer test products not intended for sale.
    Historically, products prepared for consumer test purposes have not 
presented FSIS with regulatory problems. These products are produced 
under controlled conditions and in limited quantities, and are not 
broadly distributed in the marketplace. In addition, all of the 
product's ingredients must be listed on the labeling and conform with 
all regulatory restrictions on their use. FSIS believes that permitting 
the generic approval of labeling for consumer test products will allow 
processors to more expeditiously develop and produce new, safe, 
wholesome products while testing consumer acceptance. Accordingly, FSIS 
will allow generic approval of labeling for consumer test products that 
will not be sold.
    c. Deletion of any claim or other nonmandatory feature or 
information on labeling that was previously approved in sketch form, 
provided the deletion of the information will not render the labeling 
false or misleading in any particular.
    Companies often delete claims and other nonmandatory information on 
the labeling (e.g., promotional information, cooking instructions, and 
recipes) as a part of their overall marketing strategy. Some examples 
of these situations are already included in the existing generic 
approval category (e.g., deletion of the word ``new'' and modification 
of cooking instructions (9 CFR 317.5 and 381.134)). FSIS believes there 
is little, if any, risk of misbranding by broadening the generic 
approval category to allow the deletion of any claim or other 
nonmandatory information, for labeling previously approved in sketch 
form.
    d. The addition or deletion of a direct translation of the English 
language into a foreign language for products marked ``for export 
only,'' for labeling previously approved by FLD as sketch labeling.
    Traditionally, the responsibility of accurately making a direct 
translation of the English language into a foreign language for 
products marked ``for export only'' has rested with manufacturers. FSIS 
believes that the addition or deletion of a direct translation of the 
English language into a foreign language for products marked ``for 
export only'' will not compromise the accuracy of the labeling of those 
products. Furthermore, FSIS is of the opinion that the inclusion of 
such labeling modifications in the generically approved category is 
consistent with the intent of this final rule. Thus, FSIS will permit 
generic approval of the addition or deletion of a direct translation of 
the English language into a foreign language for products marked ``for 
export only,'' whose labeling was previously approved in sketch form.
    e. The substitution of any unit of measurement with its 
abbreviation or the substitution of an abbreviation with its unit of 
measurement.
    In its proposal, FSIS proposed that the substitution of the 
abbreviation ``lb.'' for ``pound,'' or ``oz.'' for ``ounce,'' or the 
substitution of the word ``pound'' for ``lb.,'' or ``ounce'' for 
``oz.'' on labeling would be generically approved. FSIS now believes, 
after reviewing the comments, that broadening the scope of this 
category to include the substitution of any unit of measurement with 
its abbreviation or the substitution of an abbreviation with its unit 
of measurement will not compromise the accuracy of product labeling. 
Thus, FSIS will permit the substitution of any unit of measurement with 
its abbreviation and substitution of an abbreviation with its unit of 
measurement, e.g., ``lb.'' for ``pound'' or ``teaspoon'' for ``tsp.''
    f. Wrappers or other covers bearing pictorial designs, emblematic 
designs or illustrations, e.g., floral arrangements, illustrations of 
animals, fireworks, etc. are used with approved labeling (the use of 
such designs will not make necessary the application of labeling not 
otherwise required);
    FSIS had proposed to allow generic approval during holiday seasons 
of wrappers or other coverings bearing floral or foliage designs, 
illustrations, or other emblematic holiday designs.
    FSIS now believes, after reviewing the comments, that allowing the 
generic approval of only holiday designs on wrappers or other covers is 
too restrictive. Therefore, FSIS has broadened the scope of this 
category to permit the use of any pictorial or emblematic design, or 
illustration on wrappers or other covers, provided such design will not 
render the labeling to be false or misleading. FSIS is of the opinion 
that the inclusion of such labeling modification in the generically 
approved category is consistent with the intent of this final rule.
7. Voluntary Approval for Labeling Eligible For Generic Approval
    Some of the commenters who expressed support for the expansion of 
the generic approval category wanted to retain the option of submitting 
labeling to FSIS for review and approval, even when the labeling is 
eligible for generic approval.
    As previously stated, FSIS is aware that there are some concerns 
about the provision to include standardized products within the 
generically-approved labeling category. The intent of this rulemaking 
is to improve the overall efficiency of the labeling approval process 
by limiting the amount of labeling submitted to FSIS for review and 
approval, which cannot be achieved if all labeling authorized to be 
generically approved were permitted to be submitted for review and 
approval. Further, permitting all labeling authorized for generic 
approval to be submitted for review and approval would take away from 
the limited resources FSIS has at its disposal which it needs to review 
those aspects of labeling requirements that involve potential public 
health concerns. Nonetheless, FSIS has always provided, and will 
continue to provide advice and counsel to the industry and to the 
public at-large concerning labeling issues. To make very clear that 
FSIS remains committed to providing needed advice in appropriate 
circumstances, FSIS has modified the proposed rule to allow 
manufacturers to voluntarily submit sketch labeling for standardized 

[[Page 67451]]
products for review and approval. Many of these products have complex 
compositional and minimum content requirements. FSIS is also providing 
this option for standardized products contained in the Standards and 
Labeling Policy Book because many of these products also have complex 
compositional and minimum content requirements. FSIS has determined 
that manufacturers should have the option, at this time, of submitting 
sketch labeling for standardized products for review. However, as FSIS 
begins a more indepth review of its labeling requirements and 
practices, FSIS may propose in a future rulemaking to remove this 
voluntary submittal option. This would be consistent with the intent of 
this rulemaking, which is to limit the types of labeling submitted for 
review so that FSIS resources can be focused on issues that bear 
directly on public health and food safety.
8. Generic System of Labeling Approval
    Under an all-generic system, establishments would design, develop, 
print, and apply labeling without submission to FSIS for review and 
approval. A few commenters supported the proposed concept of an all-
generic labeling approval system, citing reductions in costs and 
improved efficiency. However, the majority of the commenters opposed an 
all-generic system of approval because of concerns with their ability 
to fully understand and consistently interpret the existing labeling 
policies and regulations, the potential for misbranded product to enter 
the marketplace, and concern with penalties for misbranding and product 
recalls.
    FSIS is currently reassessing the proposed all-generic labeling 
system of approval as an alternative option in an effort to streamline 
and modernize the label review process.
9. Preemption Concerns
    Several commenters expressed concern that the proposal acknowledged 
``concurrent jurisdiction'' (i.e., the States and local governments may 
exercise concurrent jurisdiction over meat and poultry products that 
are outside official establishments for the purpose of preventing 
distribution of meat and poultry products that are misbranded or 
adulterated under the FMIA or PPIA). The comments indicated that FSIS 
should clearly state that the new labeling requirements will have a 
preemptive effect on the requirements of the various States and local 
governments.
    The provisions of the FMIA and PPIA preclude any State or local 
jurisdiction from imposing ingredient, marking, or labeling 
requirements on products produced in federally inspected establishments 
that are different or in addition to Federal requirements. In this 
regard, State and local jurisdictions cannot impose different or 
additional requirements, regardless of whether the labeling is approved 
in sketch form by FSIS or generically approved by FSIS.
10. The IIC's Role Under a Generic Approval System
    Many commenters were concerned about the responsibilities of the 
IIC with respect to product packaged in generically approved labeling. 
Commenters repeatedly stated that the role of the IIC must be clearly 
defined for these proposed changes to be implemented efficiently. Most 
commenters contended that the IIC's limited knowledge and expertise on 
labeling regulations and policies may lead to unwarranted interference 
or retention of product. In addition, some commenters stated that 
labeling interpretations made by individual inspectors would not 
contribute toward uniformity in labeling decisions.
    FSIS believes some of the concerns raised by commenters will be 
alleviated since the Agency will issue a notice to field personnel that 
will clearly describe how to respond to and report label deficiencies.
    FSIS is currently conducting a top to bottom review of how the 
Agency defines its regulatory roles, allocates resources, and is 
organized (60 FR 32127). The IIC's role with regard to monitoring 
product formulations and processing procedures will be addressed in 
that review but will not change or be diminished as a result of this 
regulation. Inspection personnel will continue to observe and monitor 
product formulations and processing procedures to assure conformance 
with general labeling requirements. If inspection personnel observe 
that products are not being manufactured in accordance with their 
formulation or believe that a situation may have health or safety 
significance, they are to take the appropriate action necessary to 
ensure that misbranded and/or adulterated product does not enter 
commerce. In addition, inspection personnel are to immediately contact 
FLD, through appropriate channels, for technical assistance.
11. Recordkeeping
    FSIS proposed that domestic establishments and establishments 
certified by officials of a foreign inspection system maintain records 
on all labeling used, and make such records available to any authorized 
USDA official, upon request. Each record would consist of the product's 
labeling, formulation, and processing procedure. Several commenters 
requested clarification about the location and content of the required 
records.
    Manufacturers of meat and poultry products will be required to 
maintain records of all labeling used, along with the product's 
formulation and processing procedure in accordance with 9 CFR part 320 
of the meat inspection regulations for meat products, and in accordance 
with 9 CFR part 381, subpart Q of the poultry products inspection 
regulations for poultry products. This means that records of the actual 
labeling used on a product, along with the product's formulation and 
processing procedures must be maintained.
    In regard to where the required records must be located, i.e., 
maintained, the final regulations, as did the proposal, require, as 
previously stated, the records to be maintained in accordance with 9 
CFR part 320 for meat products, and in accordance with 9 CFR part 381, 
subpart Q for poultry products. In accordance with section 320.2 of the 
meat inspection regulations and section 381.176 of the poultry products 
inspection regulations, required records must be maintained by a 
person, including a corporation at the place of business where the 
business is conducted, except that if a person, including a corporation 
conducts business at multiple locations, records may be maintained at 
the headquarters office. FSIS does not believe it is necessary to 
require all establishments at multiple locations to maintain copies of 
the labeling records required by this final rule. However, the IIC will 
retain his or her authority to request the labeling records to verify 
the accuracy of the labeling of products as it relates to official 
business.
    Any existing labeling files maintained by inspection personnel at 
federally inspected establishments will be returned to plant management 
at the time this regulation is implemented.
    This final rule will eliminate the requirement that inspection 
personnel maintain labeling files. FSIS has determined, after further 
examination of the regulations, that the elimination of this 
requirement will necessitate changes in other related provisions of the 
meat and poultry inspection regulations (9 CFR 317.14, 381.141, and 
381.137). FSIS inadvertently omitted these provisions in the proposed 
rule but believes such provisions must be amended to avoid confusion 
among inspection personnel regarding their 

[[Page 67452]]
labeling responsibilities and to make the regulations consistent. The 
current provisions in 9 CFR 317.14 and 381.141 require the inspector, 
upon notification of an obsolete label, to return the label that is in 
the official labeling file to the establishment and to forward the 
label transmittal to FLD for further data processing. This procedure 
will become unnecessary because the final rule, as did the proposal, no 
longer, in general, requires inspection personnel to maintain labeling 
files. Thus, FSIS is eliminating 9 CFR 317.14 and 381.141 to relieve 
inspection personnel of the responsibility of handling obsolete 
labeling records. In addition, the provision in 9 CFR 381.137 states 
that no inspector shall authorize the use of any labeling or device 
unless he or she has on file evidence that such labeling or device has 
been approved in accordance with the appropriate provisions. Because 
inspection personnel will no longer maintain labeling files, the IIC's 
responsibility for authorizing the use of labeling will not be 
required. Thus, FSIS is revising 9 CFR 381.137 to delete the IIC's 
responsibility for authorizing the use of approved labeling based on 
evidence maintained in official labeling files. FSIS believes that 
amending the aforementioned provisions is consistent with the intent of 
this final rule.
12. Auditing the Accuracy of Generically Approved Labeling
    To monitor compliance with the Federal meat and poultry products 
inspection regulations, FSIS proposed to select samples of generically 
approved labeling.
    In addition to routine compliance and inspection activities, FSIS 
will develop and implement a sampling plan for the expanded types of 
labeling under the generic approval category. The sampling plan will be 
directed from FSIS headquarters in Washington. FSIS inspection 
personnel will collect all pertinent labeling records corresponding to 
each selected sample. These samples would be collected and forwarded to 
FLD for audit. FLD will evaluate the samples to determine if they 
comply with labeling regulations and policies.
13. Modernization of the Labeling Review System
    All of the commenters responding to this issue of modernizing the 
labeling review system were in support of the Agency's efforts. Such 
commenters included those who supported sketch only approval, as well 
as those who supported generic approval. The commenters stated that an 
electronic communications system would be cost effective by eliminating 
unnecessary paperwork and taking advantage of new information, 
collection, and storage technologies.
    FSIS will continue to make incremental improvements in automation 
as budget constraints allow. Furthermore, FSIS believes that its 
current efforts to automate its labeling review system are consistent 
with the President's initiatives for greater efficiency in government 
services.

Miscellaneous Changes

    The proposal stated that products labeled ``for export only'' in 
U.S. establishments that do not contain any special claims would be 
permitted to be labeled with generically approved labeling and thus 
labeling for such products would not have to be submitted in sketch 
form to FSIS for approval. However, after further consideration, FSIS 
has concluded that products designated ``for export only'' and destined 
to foreign countries should be reviewed and approved under the same 
provisions proposed for other products manufactured in U.S. 
establishments. FSIS acknowledges its responsibility for ensuring the 
accuracy of all labeling of meat and poultry products manufactured in 
Federal establishments, regardless of the product's destination. Also, 
most countries that receive product from the United States do not have 
label review programs. Therefore, these countries depend on FSIS review 
and approval as their assurance that imported products are accurately 
labeled. Thus, FSIS has decided to withdraw this provision of its 
proposal, and to require, as it did prior to its proposal, that 
labeling designated ``for export only'' be submitted to FSIS for 
approval, except when such labeling comes within the categories of 
labeling that will be generically approved. As FSIS reforms its prior 
labeling approval system, more of these labels will be considered for 
inclusion in the generic approval category. Although FSIS is continuing 
to provide labeling review services for these exporters, it will 
explore the possibility of charging user fees in the future for such 
services.
    As stated in the proposal, where sketch labeling is required to be 
submitted to FLD for review and approval, a parent company for a 
corporation may submit only one labeling application for a product 
produced in other establishments, which are owned by the corporation. 
FSIS has clarified this matter in the Federal meat and poultry products 
regulations.
    On August 8, 1994, FSIS published in the Federal Register a final 
rule on the placement of nutrition labeling and other mandatory 
labeling on meat and poultry products (59 FR 40209). That rule included 
a provision identifying as generically approved, final labeling bearing 
nutrition labeling information which was approved in sketch form or 
other version that clearly shows all required features, size, location, 
and identification of final color, by FSIS (9 CFR 317.5(c) and 
381.134(c)). This final rule on prior labeling approval, as did the 
proposed rule, identifies as generically approved, final labeling, 
which would include labeling bearing nutrition information, that was 
submitted for approval and approved by FSIS in sketch form. Therefore, 
the current provisions in 9 CFR 317.5(c) and 381.134(c) are no longer 
needed. Accordingly, FSIS is amending the Federal meat and poultry 
products inspection regulations to eliminate 9 CFR 317.5(c) and 
381.134(c).
    This final rule, as did the proposal, will eliminate the need for 
FSIS inspection personnel to maintain labeling records. Consequently, 
FLD will no longer need labeling applications to be submitted in 
triplicate form. Accordingly, FSIS is clarifying this requirement in 
the Federal meat and poultry products inspection regulations 9 CFR 
317.4(c) and 381.132(c) to reflect that labeling applications only need 
to be submitted in duplicate form.

Effective Date

    After careful consideration of the changes necessary to implement 
the revised labeling system, FSIS has decided to make this rule 
effective 6 months from the date of publication. The Agency believes 
that a longer implementation period will alleviate unnecessary delays 
in the labeling review process. This longer implementation period will 
also minimize burdens related to the transfer of labeling records from 
the IIC's to the establishments, inspection personnel and industry 
orientation to new procedures, the auditing of generically approved 
labels, and various other miscellaneous changes. In addition, the 
longer implementation period will allow the Agency time to develop and 
issue to its inspection personnel, official guidelines for implementing 
this regulation.

Executive Order 12866

    The final rule has been reviewed under Executive Order 12866 and 
has been determined to be significant. FSIS has assessed the impacts of 
its final rule 

[[Page 67453]]
that expands the types of labeling, used on meat and poultry products, 
that are generically approved; i.e., establishments will be able to use 
certain labeling on meat and poultry products without submission of the 
labeling to FSIS for approval by the IIC or FLD, in Washington, DC. 
This rule eliminates unnecessary duplication in the labeling approval 
system.

Benefits of the Final Rule

    This regulation will benefit consumers, the meat and poultry 
industry, and the Agency. The final rule will reduce market 
inefficiencies caused by delays in new product introduction 
attributable to the labeling application and review process. Industry 
will be able to be more responsive to their consumers. Consumers will 
also benefit because new products will be introduced into the 
marketplace faster.
    This final rule will reduce requirements for the submission of 
labeling for review and approval by FSIS. The final rule will 
streamline the label submission process from two steps (sketch and 
final) to a one step process (sketch only). Also, meat and poultry 
manufacturers will be able to make numerous labeling modifications 
without submitting certain labels for approval. This streamlined 
process will reduce the burden on industry by making the labeling 
approval process more convenient and cost-effective. Furthermore, those 
establishments that use representatives to present their labels to FLD 
for review will also save time and money. These savings will be 
realized because fewer labels will be required to be submitted to FLD. 
It is estimated that the reduction in the submission of labeling will 
save the meat and poultry establishments at least 20,000 hours.
    This final rule will result in a savings of approximately $3 
million in direct label application costs to the industry. This $3 
million was derived by estimating that approximately 82,600 fewer 
labels, at a cost of $37 per label, would be submitted to FLD annually 
as a result of this final rule. Unknown additional savings will be 
realized by the industry, depending on the degree to which industry 
uses the generic approval authority for labeling for standardized 
products. This $3 million savings estimate differs from the savings 
that were attributed to the elimination of labeling application costs 
stated in the proposed rule ($5 million) because this final rule 
contains provisions for either generic approval or voluntary submission 
for review and approval of labeling for standardized products. The 
proposed rule contained provisions for mandatory generic approval of 
labeling for standardized products. This rule will reduce the paperwork 
burdens of industry by eliminating the application process for specific 
types of labeling.
    Shifting responsibility for maintaining labeling records from the 
inspector will enable FSIS to redirect its inspection resources to 
areas more directly related to food safety. In addition, this rule is 
consistent with FSIS' February 3, 1995, Pathogen Reduction; Hazard 
Analysis and Critical Control Point Systems proposal and FSIS' other 
regulatory reform initiatives that are intended to focus inspection and 
other Agency resources on activities that have a direct bearing on food 
safety.

Costs of the Final Rule

    This final rule requires that establishments submit only one 
labeling application for FSIS approval (sketch labeling) instead of two 
applications in those instances where labeling must be approved by 
FSIS. This final rule also expands the types of labeling that can be 
generically approved. For standardized products, this rule permits the 
voluntary submittal of sketch labeling for review, if desired by the 
manufacturer.
    FSIS estimates that this final rule will result in $3 million 
annual savings in direct labeling application costs. The final rule 
does require, however, that establishments maintain copies of all 
labeling used, along with the product formulations and a description of 
the processing procedures used to formulate the product in accordance 
with 9 CFR 320.2 and part 381, subpart Q, for all labeling submitted 
for review and approval by FSIS, as well as for labeling in the generic 
approval category. This requirement should not impose any additional 
cost burden on establishments because most establishments already 
maintain copies of their labeling.
    The labeling records maintained by the establishments must be made 
available to Agency officials upon request. FSIS will conduct periodic 
sampling of generically approved labeling from the records maintained 
by the establishments. This sampling will be conducted to monitor 
compliance of generically approved labeling with all labeling 
requirements. Activities related to the generic labeling sampling 
program will be absorbed into existing Agency resources, and, thus, 
will not impose additional Agency costs.

Executive Order 12778

    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. States and local jurisdictions are preempted 
under the FMIA and the PPIA from imposing any marking, labeling, 
packaging, or ingredient requirements on federally inspected meat and 
poultry products that are in addition to, or different from, those 
imposed under the FMIA or PPIA. States and local jurisdictions may, 
however, exercise concurrent jurisdiction over meat and poultry 
products that are outside official establishments for the purpose of 
preventing the distribution of meat and poultry products that are 
misbranded or adulterated under the FMIA or PPIA, or, in the case of 
imported articles, which are not at such an establishment, after their 
entry into the United States. Under the FMIA and PPIA, States that 
maintain meat and poultry inspection programs must impose requirements 
that are at least equal to those required under the FMIA and PPIA. The 
States may, however, impose more stringent requirements on such State 
inspected products and establishments.
    No retroactive effect will be given to this final rule. The 
administrative procedures specified in 9 CFR 306.5 and 381.35 must be 
exhausted prior to any judicial challenge of the application of the 
provisions of this rule, if the challenge involves any decision of an 
inspector relating to inspection services provided under the FMIA or 
PPIA. The administrative procedures specified in 9 CFR parts 335 and 
381, subpart W, must be exhausted prior to any judicial challenge of 
the application of the provision of this rule with respect to labeling 
decisions.

Effect on Small Entities

    The Administrator, FSIS, has determined that this final rule will 
not have a significant economic impact on a substantial number of small 
entities. This rule will affect small meat and poultry establishments, 
and other small entities involved in various label consulting 
activities, including those entities who specialize in obtaining label 
approval from FSIS. Most small meat and poultry establishments will 
benefit from the provisions in this rule as direct costs involved with 
the labeling application and approval process will be reduced. Costs 
involved with label design and printing will not change and would be 
incurred even without this final rule.
    The affect of this final rule on those entities known as label 
expediters will depend on the percentage of their business directly 
involved with obtaining expedited approvals of product labels. There 
are about 13 firms that are involved on a consistent basis with 
obtaining label approvals. Eight of these 13 firms provide services 
other 

[[Page 67454]]
than expedited label approvals. A reduction in the need for this 
service is not expected to significantly affect these entities. In 
addition, these firms will likely expand existing services not related 
to expediting label approvals. Also, certain types of labels will 
continue to need approval by the Food Labeling Division before they may 
be used. Therefore, firms whose primary service involves obtaining 
label approval will be able to continue providing this service.
    Any impacts of this final rule on small entities will be mitigated 
because the Agency is providing a 6-month period before the final rule 
will be effective. Therefore, affected entities will be given time to 
adjust their current practices and/or to modify their businesses to 
lessen any possible negative affects of the final rule.

Paperwork Requirements

    Abstract: This final rule expands the types of generically approved 
labeling currently authorized for use by meat and poultry 
establishments and certified foreign establishments. (Generically 
approved labeling is not required to be submitted to FSIS for review 
and approval.) The rule also permits the submission of only sketch 
labeling, except for temporary approvals, in those instances where 
labeling is required to be submitted for approval. The rule also 
requires the retention of certain records at the establishment.
    Estimate of Burden: This final rule substantially reduces 
``reporting'' requirements for official establishments. FSIS estimates 
that label submissions sent to Washington for review and approval will 
decrease by about 50 percent. For such submissions, FSIS estimates that 
15 minutes will be the response time to prepare the label application 
form, submit it, along with the label, to FSIS or to a label expediter 
who will deliver the form and label to FSIS, and to file the records 
this rule requires establishments to maintain, which is approximately 
the same amount of time establishments currently utilize to meet 
paperwork requirements. FSIS believes that there will be no change in 
the time FSIS estimates, 60 minutes, it takes to design and develop 
labels in accordance with the regulations. In total, the burden 
associated with label approval submissions will decrease by 22,921 
hours.
    For generically approved labeling, FSIS estimates the addition of 
new generic labeling categories will result in a 50 percent increase of 
generically approved labels. Before this final rule, a copy of 
generically approved labeling was required to be filed with the 
inspector, and FSIS had estimated a 1 minute response time for this 
activity. The final rule eliminates this requirement and instead 
requires that a copy of the label and supporting information be 
maintained at the establishment. FSIS estimates it will take 2 minutes 
for the establishment to file this information. Therefore, there will 
be an increase in burden hours relating to generically approved labels 
by 2,691 hours.
    Copies of this information collection assessment can be obtained 
from Lee Puricelli, Paperwork Specialist, Food Safety and Inspection 
Service, USDA, South Agriculture Building, Room 3812, Washington, DC 
20250.
    Send comments regarding the need and usefulness of the 
requirements, the accuracy of our burden hour estimate, ways to 
minimize the burden, including through the use of automated collection 
techniques or other forms of information technology, or any other 
aspect of this collection of information, to Lee Puricelli, Paperwork 
Specialist, see address above.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record.

List of Subjects

9 CFR Part 306

    Appeals, Meat inspection.

9 CFR Part 317

    Food labeling, Meat inspection, Reporting and recordkeeping 
requirements.

9 CFR Part 320

    Reporting and recordkeeping requirements.

9 CFR Part 327

    Food labeling, Imports, and Meat inspection.

9 CFR Part 381

    Appeals, Food labeling, Imports, Poultry and poultry products, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, FSIS is amending 9 CFR 
parts 306, 317, 320, 327, and 381 as follows:

PART 306--ASSIGNMENT AND AUTHORITIES OF PROGRAM EMPLOYEES

    1. The authority citation for part 306 is revised to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

    2. Section 306.5 is amended by removing the last sentence.

PART 317--LABELING, MARKING DEVICES, AND CONTAINERS

    3. The authority citation for part 317 is revised to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

    4. Section 317.4 is revised to read as follows:


Sec. 317.4  Labeling approval.

    (a) No final labeling shall be used on any product unless the 
sketch labeling of such final labeling has been submitted for approval 
to the Food Labeling Division, Regulatory Programs, Food Safety and 
Inspection Service, and approved by such division, accompanied by FSIS 
form, Application for Approval of Labels, Marking, and Devices, except 
for generically approved labeling authorized for use in Sec. 317.5(b). 
The management of the official establishment or establishment certified 
under a foreign inspection system, in accordance with part 327 of this 
subchapter, must maintain a copy of all labeling used, along with the 
product formulation and processing procedure, in accordance with part 
320 of this subchapter. Such records shall be made available to any 
duly authorized representative of the Secretary upon request.
    (b) The Food Labeling Division shall permit submission for approval 
of only sketch labeling, as defined in Sec. 317.4(d), for all products, 
except as provided in Sec. 317.5(b) (2)-(9) and except for temporary 
use of final labeling as prescribed in paragraph (f) of this section.
    (c) All labeling required to be submitted for approval as set forth 
in Sec. 317.4(a) shall be submitted in duplicate to the Food Labeling 
Division, Regulatory Programs, Food Safety and Inspection Service, U.S. 
Department of Agriculture, Washington, DC 20250. A parent company for a 
corporation may submit only one labeling application (in duplicate 
form) for a product produced in other establishments that are owned by 
the corporation.
    (d) ``Sketch'' labeling is a printer's proof or equivalent which 
clearly shows all labeling features, size, location, and indication of 
final color, as specified in Sec. 317.2. FSIS will accept sketches that 
are hand drawn, computer generated or other reasonable facsimiles that 
clearly reflect and project the final version of the labeling. 
Indication of final color may be met by: submission of a color sketch, 
submission of a sketch which indicates by descriptive language the 
final colors, or submission with the sketch of previously approved 
final labeling that indicates the final colors. 

[[Page 67455]]

    (e) Inserts, tags, liners, pasters, and like devices containing 
printed or graphic matter and for use on, or to be placed within, 
containers and coverings of product shall be submitted for approval in 
the same manner as provided for labeling in Sec. 317.4(a), except that 
such devices which contain no reference to product and bear no 
misleading feature shall be used without submission for approval as 
prescribed in Sec. 317.5(b)(7).
    (f)(1) Consistent with the requirements of this section, temporary 
approval for the use of a final label or other final labeling that may 
otherwise be deemed deficient in some particular may be granted by the 
Food Labeling Division. Temporary approvals may be granted for a period 
not to exceed 180 calendar days, under the following conditions:
    (i) The proposed labeling would not misrepresent the product;
    (ii) The use of the labeling would not present any potential 
health, safety, or dietary problems to the consumer;
    (iii) Denial of the request would create undue economic hardship; 
and
    (iv) An unfair competitive advantage would not result from the 
granting of the temporary approval.
    (2) Extensions of temporary approvals may also be granted by the 
Food Labeling Division provided that the applicant demonstrates that 
new circumstances, meeting the above criteria, have developed since the 
original temporary approval was granted.
    (g) The inspector-in-charge shall approve meat carcass ink brands 
and meat food product ink and burning brands, which comply with parts 
312 and 316 of this subchapter.
    5. Section 317.5 is revised to read as follows:


Sec. 317.5  Generically approved labeling.

    (a)(1) An official establishment or an establishment certified 
under a foreign inspection system, in accordance with part 327 of this 
subchapter, is authorized to use generically approved labeling, as 
defined in paragraph (b) of this section, without such labeling being 
submitted for approval to the Food Safety and Inspection Service in 
Washington or the field, provided the labeling is in accordance with 
this section and shows all mandatory features in a prominent manner as 
required in Sec. 317.2, and is not otherwise false or misleading in any 
particular.
    (2) The Food Safety and Inspection Service shall select samples of 
generically approved labeling from the records maintained by official 
establishments and establishments certified under foreign inspection 
systems, in accordance with part 327 of this subchapter, as required in 
Sec. 317.4, to determine compliance with labeling requirements. Any 
finding of false or misleading labeling shall institute the proceedings 
prescribed in Sec. 335.12.
    (b) Generically approved labeling is labeling which complies with 
the following:
    (1) Labeling for a product which has a product standard as 
specified in part 319 of this subchapter or the Standards and Labeling 
Policy Book and which does not contain any special claims, such as 
quality claims, nutrient content claims, health claims, negative 
claims, geographical origin claims, or guarantees, or which is not a 
domestic product labeled in a foreign language;
    (2) Labeling for single-ingredient products (such as beef steak or 
lamb chops) which does not contain any special claims, such as quality 
claims, nutrient content claims, health claims, negative claims, 
geographical origin claims, or guarantees, or which is not a domestic 
product labeled with a foreign language;
    (3) Labeling for containers of products sold under contract 
specifications to Federal Government agencies, when such product is not 
offered for sale to the general public, provided that the contract 
specifications include specific requirements with respect to labeling, 
and are made available to the inspector-in-charge;
    (4) Labeling for shipping containers which contain fully labeled 
immediate containers, provided such labeling complies with Sec. 316.13;
    (5) Labeling for products not intended for human food, provided 
they comply with part 325 of this subchapter;
    (6) Meat inspection legends, which comply with parts 312 and 316 of 
this subchapter;
    (7) Inserts, tags, liners, pasters, and like devices containing 
printed or graphic matter and for use on, or to be placed within 
containers, and coverings of products, provided such devices contain no 
reference to product and bear no misleading feature;
    (8) Labeling for consumer test products not intended for sale; and
    (9) Labeling which was previously approved by the Food Labeling 
Division as sketch labeling, and the final labeling was prepared 
without modification or with the following modifications:
    (i) All features of the labeling are proportionately enlarged or 
reduced, provided that all minimum size requirements specified in 
applicable regulations are met and the labeling is legible;
    (ii) The substitution of any unit of measurement with its 
abbreviation or the substitution of any abbreviation with its unit of 
measurement, e.g., ``lb.'' for ``pound,'' or ``oz.'' for ``ounce,'' or 
of the word ``pound'' for ``lb.'' or ``ounce'' for ``oz.'';
    (iii) A master or stock label has been approved from which the name 
and address of the distributor are omitted and such name and address 
are applied before being used (in such case, the words ``prepared for'' 
or similar statement must be shown together with the blank space 
reserved for the insertion of the name and address when such labels are 
offered for approval);
    (iv) Wrappers or other covers bearing pictorial designs, emblematic 
designs or illustrations, e.g., floral arrangements, illustrations of 
animals, fireworks, etc. are used with approved labeling (the use of 
such designs will not make necessary the application of labeling not 
otherwise required);
    (v) A change in the language or the arrangement of directions 
pertaining to the opening of containers or the serving of the product;
    (vi) The addition, deletion, or amendment of a dated or undated 
coupon, a cents-off statement, cooking instructions, packer product 
code information, or UPC product code information;
    (vii) Any change in the name or address of the packer, manufacturer 
or distributor that appears in the signature line;
    (viii) Any change in the net weight, provided the size of the net 
weight statement complies with Sec. 317.2;
    (ix) The addition, deletion, or amendment of recipe suggestions for 
the product;
    (x) Any change in punctuation;
    (xi) Newly assigned or revised establishment numbers for a 
particular establishment for which use of the labeling has been 
approved by the Food Labeling Division, Regulatory Programs;
    (xii) The addition or deletion of open dating information;
    (xiii) A change in the type of packaging material on which the 
label is printed;
    (xiv) Brand name changes, provided that there are no design 
changes, the brand name does not use a term that connotes quality or 
other product characteristics, the brand name has no geographic 
significance, and the brand name does not affect the name of the 
product;
    (xv) The deletion of the word ``new'' on new product labeling;
    (xvi) The addition, deletion, or amendment of special handling 

[[Page 67456]]
    statements, provided that the change is consistent with Sec. 317.2(k);
    (xvii) The addition of safe handling instructions as required by 
Sec. 317.2(l);
    (xviii) Changes reflecting a change in the quantity of an 
ingredient shown in the formula without a change in the order of 
predominance shown on the label, provided that the change in quantity 
of ingredients complies with any minimum or maximum limits for the use 
of such ingredients prescribed in parts 318 and 319 of this subchapter;
    (xix) Changes in the color of the labeling, provided that 
sufficient contrast and legibility remain;
    (xx) A change in the product vignette, provided that the change 
does not affect mandatory labeling information or misrepresent the 
content of the package;
    (xxi) A change in the establishment number by a corporation or 
parent company for an establishment under its ownership;
    (xxii) Changes in nutrition labeling that only involve quantitative 
adjustments to the nutrition labeling information, except for serving 
sizes, provided the nutrition labeling information maintains its 
accuracy and consistency;
    (xxiii) Deletion of any claim, and the deletion of non-mandatory 
features or non-mandatory information; and
    (xxiv) The addition or deletion of a direct translation of the 
English language into a foreign language for products marked ``for 
export only.''


Sec. 317.4  [Removed and reserved]

    6. Section 317.14 is removed and reserved.

PART 320--RECORDS, REGISTRATION, AND REPORTS

    7. The authority citation for part 320 is revised to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

    8. Section 320.1 is amended by adding a new paragraph (b)(11) to 
read as follows:


Sec. 320.1  Records required to be kept.

* * * * *
    (b) * * *
    (11) Records of all labeling, along with the product formulation 
and processing procedures, as prescribed in Sec. 317.4 and Sec. 317.5.

PART 327--IMPORTED PRODUCTS

    9. The authority citation for part 327 is revised to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

    10. Section 327.14(c) is revised to read as follows:


Sec. 327.14  Marking of products and labeling of immediate containers 
thereof for importation.

* * * * *
    (c) All marks and other labeling for use on or with immediate 
containers, as well as private brands on carcasses or parts of 
carcasses, shall be approved by the Food Safety and Inspection Service 
in accordance with part 317 of this subchapter before products bearing 
such marks, labeling, or brands will be entered into the United States. 
The marks of inspection of foreign systems embossed on metal containers 
or branded on carcasses or parts thereof need not be submitted to the 
Food Safety and Inspection Service for approval, and such marks of 
inspection put on stencils, box dies, labels, and brands may be used on 
such immediate containers as tierces, barrels, drums, boxes, crates, 
and large-size fiberboard containers of foreign products without such 
marks of inspection being submitted for approval, provided the markings 
made by such articles are applicable to the product and are not false 
or misleading.


Sec. 327.24  [Amended]

    11. Section 327.24 is amended by removing the last sentence.
PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS
    12. The authority citation for part 381 is revised to read as 
follows:

    Authority: 7 U.S.C. 138f; 7 U.S.C. 450, 21 U.S.C. 451-470; 7 CFR 
2.18, 2.53.

    13. Section 381.35 is amended by revising the last sentence to read 
as follows:
Sec. 381.35  Appeal inspections; how made.

    * * *. The poultry or poultry products involved in any appeal shall 
be identified by U.S. retained tags and segregated in a manner approved 
by the inspector pending completion of an appeal inspection.
    14. Section 381.132 is revised to read as follows:
Sec. 381.132  Labeling approval.

    (a) No final labeling shall be used on any product unless the 
sketch labeling of such final labeling has been submitted for approval 
to the Food Labeling Division, Regulatory Programs, Food Safety and 
Inspection Service, and approved by such division, accompanied by FSIS 
Form, Application for Approval of Labels, Marking, and Devices, except 
for generically approved labeling authorized for use in Sec. 381.133(b) 
(2)-(9). The management of the official establishment or establishment 
certified under a foreign inspection system, in accordance with subpart 
T of this part, must maintain a copy of all labeling used, along with 
the product formulation and processing procedure, in accordance with 
subpart Q of this part. Such records shall be made available to any 
duly authorized representative of the Secretary upon request.
    (b) The Food Labeling Division shall permit submission for approval 
of only sketch labeling, as defined in Sec. 381.132(d), for all 
products, except as provided in Sec. 381.133(b) (2)-(9) and except for 
temporary use of final labeling as prescribed in paragraph (f) of this 
section.
    (c) All labeling required to be submitted for approval as set forth 
in Sec. 381.132(b) shall be submitted in duplicate to the Food Labeling 
Division, Regulatory Programs, Food Safety and Inspection Service, U.S. 
Department of Agriculture, Washington, DC 20250. A parent company for a 
corporation may submit only one labeling application (in duplicate) for 
a product produced in other establishments that are owned by the 
corporation.
    (d) ``Sketch'' labeling is a printer's proof or equivalent which 
clearly shows all labeling features, size, location, and indication of 
final color, as specified in subpart N of this part. FSIS will accept 
sketches that are hand drawn, computer generated or other reasonable 
facsimiles that clearly reflect and project the final version of the 
labeling. Indication of final color may be met by: submission of a 
color sketch, submission of a sketch which indicates by descriptive 
language the final colors, or submission with the sketch of previously 
approved final labeling that indicates the final colors.
    (e) Inserts, tags, liners, pasters, and like devices containing 
printed or graphic matter and for use on, or to be placed within, 
containers and coverings of product shall be submitted for approval in 
the same manner as provided for labeling in Sec. 381.132(a), except 
that such devices which contain no reference to product and bear no 
misleading feature shall be used without submission for approval as 
prescribed in Sec. 381.133(b)(9).
    (f)(1) Consistent with the requirements of this section, temporary 
approval for the use of a final label or other final labeling that may 
otherwise be deemed deficient in some particular may be granted by the 
Food Labeling Division. Temporary approvals may be granted for a period 
not to exceed 180 calendar days under the following conditions:
    (i) The proposed labeling would not misrepresent the product;
    
[[Page 67457]]

    (ii) The use of the labeling would not present any potential 
health, safety, or dietary problems to the consumer;
    (iii) Denial of the request would create undue economic hardship; 
and
    (iv) An unfair competitive advantage would not result from the 
granting of the temporary approval.
    (2) Extensions of temporary approvals may also be granted by the 
Food Labeling Division, provided that the applicant demonstrates that 
new circumstances, meeting the above criteria, have developed since the 
original temporary approval was granted.
    15. Section 381.133 is redesignated as Sec. 381.134, and 
Sec. 381.134 is redesignated as Sec. 381.133 and revised to read as 
follows:


Sec. 381.133  Generically approved labeling.

    (a)(1) An official establishment or an establishment certified 
under a foreign inspection system, in accordance with subpart T of this 
part, is authorized to use generically approved labeling, as defined in 
paragraph (b) of this section, without such labeling being submitted 
for approval to the Food Safety and Inspection Service in Washington or 
the field, provided the labeling is in accord with this section and 
shows all mandatory features in a prominent manner as required in 
subpart N of this part, and is not otherwise false or misleading in any 
particular.
    (2) The Food Safety and Inspection Service shall select samples of 
generically approved labeling from the records maintained by official 
establishments and establishments certified under foreign inspection 
systems, in accordance with subpart T of this part, as required in 
Sec. 381.132, to determine compliance with labeling requirements. Any 
finding of false or misleading labeling shall institute the proceedings 
prescribed in Sec. 381.233.
    (b) Generically approved labeling is labeling which complies with 
the following:
    (1) Labeling for a product which has a product standard as 
specified in subpart 381 of this subchapter or the Standards and 
Labeling Policy Book and which does not contain any special claims, 
such as quality claims, nutrient content claims, health claims, 
negative claims, geographical origin claims, or guarantees, or which is 
not a domestic product labeled in a foreign language;
    (2) Labeling for single-ingredient products (such as chicken legs 
or turkey breasts) which does not contain any special claims, such as 
quality claims, nutrient content claims, health claims, negative 
claims, geographical origin claims, or guarantees, or which is not a 
domestic product labeled with a foreign language;
    (3) Labeling for containers of products sold under contract 
specifications to Federal Government agencies, when such product is not 
offered for sale to the general public, provided that the contract 
specifications include specific requirements with respect to labeling, 
and are made available to the inspector-in-charge;
    (4) Labeling for shipping containers which contain fully labeled 
immediate containers, provided such labeling complies with 
Sec. 381.127;
    (5) Labeling for products not intended for human food, provided 
they comply with Secs. 381.152(c) and 381.193, and labeling for poultry 
heads and feet for export for processing as human food if they comply 
with Sec. 381.190(b);
    (6) Poultry inspection legends, which comply with subpart M of this 
part;
    (7) Inserts, tags, liners, pasters, and like devices containing 
printed or graphic matter and for use on, or to be placed within 
containers, and coverings of products, provided such devices contain no 
reference to product and bear no misleading feature;
    (8) Labeling for consumer test products not intended for sale; and
    (9) Labeling which was previously approved by the Food Labeling 
Division as sketch labeling, and the final labeling was prepared 
without modification or with the following modifications:
    (i) All features of the labeling are proportionately enlarged or 
reduced, provided that all minimum size requirements specified in 
applicable regulations are met and the labeling is legible;
    (ii) The substitution of any unit of measurement with its 
abbreviation or the substitution of any abbreviation with its unit of 
measurement, e.g., ``lb.'' for ``pound,'' or ``oz.'' for ``ounce,'' or 
of the word ``pound'' for ``lb.'' or ``ounce'' for ``oz.'';
    (iii) A master or stock label has been approved from which the name 
and address of the distributor are omitted and such name and address 
are applied before being used (in such case, the words ``prepared for'' 
or similar statement must be shown together with the blank space 
reserved for the insertion of the name and address when such labels are 
offered for approval);
    (iv) Wrappers or other covers bearing pictorial designs, emblematic 
designs or illustrations, e.g., floral arrangements, illustrations of 
animals, fireworks, etc. are used with approved labeling (the use of 
such designs will not make necessary the application of labeling not 
otherwise required);
    (v) A change in the language or the arrangement of directions 
pertaining to the opening of containers or the serving of the product;
    (vi) The addition, deletion, or amendment of a dated or undated 
coupon, a cents-off statement, cooking instructions, packer product 
code information, or UPC product code information;
    (vii) Any change in the name or address of the packer, manufacturer 
or distributor that appears in the signature line;
    (viii) Any change in the net weight, provided that the size of the 
net weight statement complies with Sec. 381.121;
    (ix) The addition, deletion, or amendment of recipe suggestions for 
the product;
    (x) Any change in punctuation;
    (xi) Newly assigned or revised establishment numbers for a 
particular establishment for which use of the labeling has been 
approved by the Food Labeling Division, Regulatory Programs;
    (xii) The addition or deletion of open dating information;
    (xiii) A change in the type of packaging material on which the 
label is printed;
    (xiv) Brand name changes, provided that there are no design 
changes, the brand name does not use a term that connotes quality or 
other product characteristics, the brand name has no geographic 
significance, and the brand name does not affect the name of the 
product;
    (xv) The deletion of the word ``new'' on new product labeling;
    (xvi) The addition, deletion, or amendment of special handling 
statements, provided that the change is consistent with 
Sec. 381.125(a);
    (xvii) The addition of safe handling instructions as required by 
Sec. 381.125(b);
    (xviii) Changes reflecting a change in the quantity of an 
ingredient shown in the formula without a change in the order of 
predominance shown on the label, provided that the change in quantity 
of ingredients complies with any minimum or maximum limits for the use 
of such ingredients prescribed in Sec. 381.147 and subpart P of this 
part;
    (xix) Changes in the color of the labeling, provided that 
sufficient contrast and legibility remain;
    (xx) A change in the product vignette, provided that the change 
does not affect mandatory labeling information or misrepresent the 
content of the package;
    (xxi) The addition, deletion, or substitution of the official USDA 
poultry grade shield; (xxii) A change in the establishment number by a 
corporation or parent company for an establishment under its ownership; 


[[Page 67458]]

    (xxiii) Changes in nutrition labeling that only involve 
quantitative adjustments to the nutrition labeling information, except 
for services sizes, provided the nutrition labeling information 
maintains its accuracy and consistency;
    (xxiv) Deletion of any claim, and the deletion of non-mandatory 
features or non-mandatory information;
    (xxv) The addition or deletion of a direct translation of the 
English language into a foreign language for products marked ``for 
export only''; and
    (xxvi) The addition of a descriptive term as required by 
Sec. 381.129(b)(6).

    16. Section 381.137 is revised to read as follows:


Sec. 381.137  Evidence of labeling and devices approval.

    No inspector shall authorize the use of any device bearing any 
official inspection legend unless he or she has on file evidence that 
such device has been approved in accordance with the provisions of this 
subpart.


Sec. 381.141  [Removed and reserved]

    17. Section 381.141 is removed and reserved.
    18. Section 381.175 is amended by adding a new paragraph (b)(6) to 
read as follows:


Sec. 381.175  Records required to be kept.

* * * * *
    (b) * * *
    (6) Records of all labeling, along with the product formulation and 
processing procedures, as prescribed in Secs. 381.132 and 381.133.
    19. Section 381.202(d) is amended by removing the last sentence and 
by revising the next to the last sentence to read as follows:


Sec. 381.202  Poultry products offered for entry; reporting of findings 
to customs; handling of articles refused entry; appeals, how made; 
denaturing procedures.

* * * * *
    (d) * * *. The poultry or poultry products involved in any appeal 
shall be identified by U.S. retained tags and segregated in a manner 
approved by the inspector pending completion of an appeal inspection.
* * * * *
    20. Section 381.205(c) is revised to read as follows:


Sec. 381.205  Labeling of immediate containers of poultry products 
offered for entry.

* * * * *
    (c) All marks and other labeling for use on or with immediate 
containers shall be approved for use by the Food Safety and Inspection 
Service in accordance with Secs. 381.132 and 381.133 before products 
bearing such marks and other labeling will be permitted for entry into 
the United States.
    21. Section 381.206 is amended by adding to the end thereof the 
following sentence:


Sec. 381.206  Labeling of shipping containers of poultry products 
offered for entry.

    * * *. All labeling used with a shipping container of imported 
poultry products must be approved in accordance with subpart N of this 
part.

    Done at Washington, DC, on: December 21, 1995.
Michael R. Taylor,
Acting Under Secretary for Food Safety.
[FR Doc. 95-31392 Filed 12-26-95; 3:36 pm]
BILLING CODE 3410-DM-P