• COOL Rules Mandated in the 2002 and 2008 Farm Bills Become Effective
  • April 28, 2009
  • Law Firm: Keller and Heckman LLP - Washington Office
  • The final rule for the Country of Origin Labeling (COOL) program, published in the Federal Register on January 15, 2009, became effective March 16, as originally pronounced. The rule had been under regulatory review by the U.S. Department of Agriculture (USDA) pursuant to a January 20, 2009 memorandum from President Obama's Chief of Staff.

    In a February 20 announcement about the effective date, Agriculture Secretary Tom Vilsack explained that the best way to evaluate the program would be to monitor the rule's implementation and compliance by retailers and their suppliers. He added that the evaluation will help determine if "additional rulemaking may be necessary to provide consumers with adequate information."

    By way of background, the 2002 Farm Bill (Farm Security and Rural Investment Act of 2002) included provisions requiring COOL for beef, lamb, pork, fish, perishable agricultural commodities, and peanuts. However, a provision in the Omnibus Appropriations Act of 2004 imposed a two-year moratorium on the implementation of the final COOL requirements for all covered commodities except wild and farm-raised fish and shellfish (for more details, see a 2004 PackagingLaw.com article on COOL). In 2005, implementation of mandatory COOL for all covered commodities except wild and farm-raised fish and shellfish was delayed again, this time until September 30, 2008. The 2008 Farm Bill (Food, Conservation and Energy Act of 2008) expanded the list of commodities requiring COOL to include chicken, goat meat, ginseng, pecans and macadamia nuts.

    The final rule on deals with labeling for fish and shellfish (in 7 CFR Part 60) and for beef, pork, lamb, chicken, goat meat, perishable agricultural commodities (PACs- fresh and frozen fruits and vegetables), macadamia nuts, pecans, peanuts, and ginseng (in 7 CFR Part 65).

    All covered commodities that are sold either individually, in a bulk bin, carton, case, crate, barrel, cluster, or consumer package must bear country-of-origin labeling. However, covered commodities that are ingredients in "processed food items" are excluded from the scope of the rule. In addition, "food service establishments" and covered commodities sold at food service establishments are exempt from the requirements.

    Label Format, Records, and Enforcement

    The exact placement or size of COOL is not specified the final rule. COOL can be in the form of a statement, such as "Product of USA", "Produce of the USA," or "Grown in USA." The message may be delivered via check boxes. Retail bulk containers may include multiple origins as long as all possible origins are listed. The final rule does not allow alternate labeling, such as "or, may contain, and/or". Finally, state/regional/locality designations instead of country are also permitted for PACs, peanuts, pecans, macadamia nuts, and ginseng.

    The final rule requires that records verifying the country of origin of the covered commodity be maintained by suppliers and retailers. Records maintained in the normal course of business—such as animal health papers, import or customs documents or producer affidavits—can serve as verification of country of origin. USDA cannot require the maintenance of records additional to those kept in the normal course of business. However, if USDA requests the records, they must be produced by the supplier or retailer within five business days of the request.

    USDA has entered into agreements with states that have the state enforcement infrastructure conduct retail compliance reviews. The Department will coordinate scheduling to identify the stores that should be audited, and how often they should be audited. The final rule allows USDA to conduct investigations of complaints made by any person alleging violations of these regulations when there is reasonable evidence to support such an investigation. However, only USDA will be allowed to initiate enforcement actions against a person found to be in violation of the law or these regulations. There is a maximum civil penalty of $1000 for each violation.

    Canada and Mexico Challenge COOL

    In December 2008, Canada and Mexico filed separate complaints against the COOL with the World Trade Organization (WTO). In January 2009, Canada agreed to suspend its complaint when the Bush Administration agreed to revise the rule to allow multiple origin labeling. Although, in a February 17 conference call, Canadian Agriculture Minister Gerry Ritz said that Canada stands ready to revive a trade complaint against the United States should Washington reinstate country-of-origin meat labeling rules that Ottawa considers protectionist, according to Reuters Canada. On the same day, the Office of the U.S. Trade Representative issued a request for comments on the dispute. See "WTO Dispute Settlement Proceeding Regarding United States—Certain Country of Origin Requirements," in the Federal Register (74 Fed. Reg. 7497-7498).