Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily determines that critical circumstances exist with respect to imports of certain quartz surface products (quartz surface products) from certain producers and Start Printed Page 57420exporters from the People's Republic of China (China).
Applicable November 15, 2018.
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FOR FURTHER INFORMATION CONTACT:
Darla Brown, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone (202) 482-1791.
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On April 17, 2018, Commerce received a countervailing duty (CVD) petition concerning imports of quartz surface products from China filed in proper form on behalf of the petitioner, Cambria Company LLC.
On May 16, 2018, we initiated this investigation,
and on September 21, 2018, we published an affirmative Preliminary Determination.
Commerce selected Fasa Industrial Corporation, Limited (Fasa Industrial), Foshan Yixin Stone Co., Ltd. (Foshan Yixin), and Foshan Hero Stone Co., Ltd. (Hero Stone) as the individually-examined respondents in this investigation. With respect to Hero Stone and Fasa Industrial, in the Preliminary Determination we based the subsidy rates for these respondents on adverse facts available (AFA), in accordance with section 776(a) and (b) of the Tariff Act of 1930, as amended (the Act).
On October 9, 2018, the petitioner alleged that critical circumstances exist with respect to imports of quartz surface products from China, pursuant to section 703(e)(1) of the Act and 19 CFR 351.206.
In accordance with 19 CFR 351.206(c)(1), if the petitioner submits an allegation of critical circumstances 30 days or more before the scheduled date of the final determination,
Commerce will make a preliminary finding whether there is a reasonable basis to believe or suspect that critical circumstances exist. Commerce will issue its preliminary finding of critical circumstances within 30 days after the petitioner submits the allegation.
Period of Investigation (POI)
The POI is January 1, 2017, through December 31, 2017.
Critical Circumstances Allegation
The petitioner alleged a massive increase of imports of certain quartz surface products from China and provided monthly import data for the period January 2017 through August 2018.
The petitioner states that a comparison of total imports, by quantity, for the period February 2018 through April 2018, to the period May 2018 through July 2018, shows that imports of quartz surface products from China increased by 81 percent,
which is considered “massive” under 19 CFR 351.206(h)(2). The petitioner also alleges that there is a reasonable basis to believe that there are subsidies in this investigation which are inconsistent with the Subsidies and Countervailing Measures Agreement (SCM Agreement).
Critical Circumstances Analysis
Section 703(e)(1) of the Act provides that Commerce will preliminarily determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A) The alleged countervailable subsidy is inconsistent with the SCM Agreement; 
and (B) there have been massive imports of the subject merchandise over a relatively short period.
In determining whether there are “massive imports” over a “relatively short period,” pursuant to section 703(e)(1)(B) of the Act and 19 CFR 351.206(h) and (i), Commerce normally compares the import volumes of the subject merchandise for at least three months immediately preceding the filing of the petition (i.e., the base period) to a comparable period of at least three months following the filing of the petition (i.e., the comparison period). However, the regulations also provide that if Commerce finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, Commerce may consider a period of not less than three months from the earlier time.
Imports must increase by at least 15 percent during the comparison period to be considered massive.
In the Preliminary Determination, we found that Foshan Yixin did not receive any countervailable subsidies during the POI that are inconsistent with the SCM Agreement.
Accordingly, because the requirement under section 703(e)(1)(A) of the Act has not been met, we preliminarily determine that critical circumstances do not exist with respect to Foshan Yixin.
Fasa Industrial and Hero Stone
As explained in our Preliminary Determination, we applied total adverse facts available (AFA) to Fasa Industrial and Hero Stone, pursuant to section 776(b) of the Act. In applying total AFA to these two companies, we preliminarily determined that both Fasa Industrial and Hero Stone benefited from countervailable subsidies under the “Export Assistance Grants” program.
Although we did not make a preliminary finding as to whether the “Export Assistance Grants” program was inconsistent with the SCM Agreement in the Preliminary Determination, we now preliminarily find, pursuant to section 776(b) of the Act, that there is a reasonable basis to believe or suspect that the program, as alleged in the Petition and supported by information reasonably available to the petitioner, is export contingent within the meaning of section 771(5A)(B) of the Act and, thus, inconsistent with the SCM Agreement.
We preliminarily found this program to have a program-specific rate of 0.58 percent.
We are making the inconsistency determination Start Printed Page 57421with regard to this program, which had the lowest rate in the Preliminary Determination among the programs alleged to be inconsistent with the SCM Agreement. In so doing, we intend to limit the corresponding offset to the dumping margin (if one is found) in the companion antidumping duty investigation, which best fulfills our statutory mandate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully,” 
and induce future cooperation by companies in investigations where the petitioners allege the existence of programs potentially inconsistent with the SCM Agreement.
Because we preliminarily find that the “Export Assistance Grants” program is export contingent, we preliminarily find that the criterion under section 703(e)(1)(A) of the Act has been met. In addition, for the purposes of the “massive imports” analysis, we preliminarily determine, pursuant to section 776(b) of the Act, that Fasa Industrial and Hero Stone shipped quartz surface products in “massive” quantities during the comparison period, thereby fulfilling the criteria under section 703(e)(1)(B) of the Act.
As a result, we preliminarily determine that critical circumstances exist with regard to Fasa Industrial and Hero Stone.
All Other Companies
We based the all-others rate applied in the Preliminary Determination on the rate preliminarily calculated for Foshan Yixin. As noted above, we preliminarily found that Foshan Yixin did not use any countervailable subsidies inconsistent with the SCM Agreement. As a result, we also preliminarily determine that all other exporters of subject merchandise from China not selected as mandatory respondents did not use countervailable subsidies inconsistent with the SCM Agreement, and thus preliminarily find that critical circumstances do not exist with respect to the companies covered by the all-others rate.
We will make a final determination concerning critical circumstances in the final determination of this investigation, which is currently scheduled for January 28, 2019.
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the last verification report is issued in this investigation. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.
Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this investigation are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.
Electronically filed documents must be received successfully in their entirety by 5:00 p.m. Eastern Time on the due dates established above.
Suspension of Liquidation
In accordance with section 703(e)(2)(A) of the Act, for Fasa Industrial and Hero Stone, we will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of any unliquidated entries of subject merchandise from the China entered, or withdrawn from warehouse for consumption, on or after June 23, 2018, which is 90 days prior to the date of publication of the Preliminary Determination in the Federal Register. For such entries, CBP shall require a cash deposit equal to the estimated preliminary subsidy rates established for Fasa Industrial and Hero Stone in the Preliminary Determination. This suspension of liquidation will remain in effect until further notice.
In accordance with section 703(f) of the Act, we will notify the ITC of this preliminary determination of critical circumstances.
This determination is issued and published pursuant to sections 703(f) and 777(i)(1) of the Act.
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Dated: November 8, 2018.
Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2018-24941 Filed 11-14-18; 8:45 am]
BILLING CODE 3510-DS-P