2018-10532. Certain Quartz Surface Products From the People's Republic of China: Initiation of Countervailing Duty Investigation  

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    AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    DATES:

    Applicable May 7, 2018.

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    FOR FURTHER INFORMATION CONTACT:

    Darla Brown at (202) 482-1791, Joshua Tucker at (202) 482-2044, or Terre Keaton Stefanova at (202) 482-1280, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.

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    SUPPLEMENTARY INFORMATION:

    The Petition

    On April 17, 2018, the U.S. Department of Commerce (Commerce) received a countervailing duty (CVD) petition concerning imports of certain quartz surface products (quartz surface products) from the People's Republic of China (China), filed in proper form on behalf of Cambria Company LLC (the petitioner).[1] The CVD Petition was accompanied by an antidumping duty (AD) Petition concerning imports of quartz surface products China. The petitioner is a domestic producer of quartz surface products.[2]

    On April 20, 2018, Commerce requested supplemental information Start Printed Page 22619pertaining to certain aspects of the Petition. The petitioner filed additional information on April 24, 2018.[3] On May 1, 2018, Commerce requested that the petitioner clarify the scope of the Petition, and in response, the petitioner submitted certain revisions to the scope.[4] On May 1, 2018, we received comments on industry support and a polling request from M S International, Inc. (MSI), a U.S. importer.[5] On May 3, 2018, the petitioner provided a response to MSI's comments on industry support.[6] On May 4, 2018, MSI submitted comments on the petitioner's Industry Support Supplement.[7]

    In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that the Government of China (GOC) is providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of quartz surface products in China and imports of such products are materially injuring, or threatening material injury to, the domestic quartz surface products industry in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating a CVD investigation, the Petition is accompanied by information reasonably available to the petitioner supporting its allegations.

    Commerce finds that the petitioner filed the Petition on behalf of the domestic industry because the petitioner is an interested party as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioner demonstrated sufficient industry support necessary for the initiation of the requested CVD investigation.[8]

    Period of Investigation

    Because the Petition was filed on April 17, 2018, the period of investigation is January 1, 2017, through December 31, 2017.

    Scope of the Investigation

    The products covered by this investigation are quartz surface products from China. For a full description of the scope of this investigation, see the Appendix to this notice.

    Scope Comments

    During our review of the Petition, Commerce issued questions to, and received responses from, the petitioner pertaining to the proposed scope to ensure that the scope language in the Petition is an accurate reflection of the products for which the domestic industry is seeking relief.[9] As a result of these exchanges, the scope of the Petition was modified to clarify the description of merchandise covered by the Petition. The description of the merchandise covered by this initiation, as described in the Appendix to this notice, reflects these clarifications.

    As discussed in the Preamble to Commerce's regulations, we are setting aside a period for interested parties to raise issues regarding product coverage (scope).[10] Commerce will consider all comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determination. If scope comments include factual information,[11] all such factual information should be limited to public information. To facilitate preparation of its questionnaires, Commerce requests that all interested parties submit such comments by 5:00 p.m. Eastern Time (ET) on May 29, 2018, which is the next business day after 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on June 8, 2018, which is 10 calendar days from the initial comments deadline.[12]

    Commerce requests that any factual information parties consider relevant to the scope of the investigation be submitted during this period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party may contact Commerce and request permission to submit the additional information. All such submissions must be filed on the records of the concurrent AD and CVD investigations.

    Filing Requirements

    All submissions to Commerce must be filed electronically using Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).[13] An electronically filed document must be received successfully in its entirety by the time and date it is due. Documents exempted from the electronic submission requirements must be filed manually (i.e., in paper form) with Enforcement and Compliance's APO/Dockets Unit, Room 18022, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, and stamped with the date and time of receipt by the applicable deadlines.

    Consultations

    Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified representatives of the GOC of the receipt of the Petition and provided them the opportunity for consultations with respect to the Petition.[14] The GOC did not request consultations.

    Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing Start Printed Page 22620support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”

    Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,[15] they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce's determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to law.[16]

    Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition).

    With regard to the domestic like product, the petitioner does not offer a definition of the domestic like product distinct from the scope of the investigation.[17] Based on our analysis of the information submitted on the record, we have determined that quartz surface products, as defined in the scope, constitute a single domestic like product, and we have analyzed industry support in terms of that domestic like product.[18]

    In determining whether the petitioner has standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the “Scope of the Investigation,” in the Appendix to this notice. To establish industry support, the petitioner provided its own production of the domestic like product in 2017 and compared this to the estimated total production of the domestic like product for the entire domestic industry.[19] We relied on data the petitioner provided for purposes of measuring industry support.[20]

    In a letter dated May 1, 2018, MSI, a U.S. importer, submitted comments on industry support and requested that Commerce poll the industry to determine industry support.[21] The petitioner responded to these comments in the Industry Support Supplement, dated May 3, 2018. In a letter dated May 4, 2018, MSI submitted comments on the petitioner's Industry Support Supplement.[22] For further discussion of these comments, see Attachment II of the Initiation Checklist.

    Our review of the data provided in the Petition, the General Issues Supplement, Industry Support Supplement, and other information readily available to Commerce indicates that the petitioner has established industry support for the Petition.[23] First, the Petition established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support (e.g., polling).[24] Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petition account for at least 25 percent of the total production of the domestic like product.[25] Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petition.[26] Accordingly, Commerce determines that the Petition was filed on behalf of the domestic industry within the meaning of section 702(b)(1) of the Act.

    Commerce finds that the petitioner filed the Petition on behalf of the domestic industry because it is an interested party as defined in section 771(9)(C) of the Act, and it has demonstrated sufficient industry support with respect to the CVD investigation that it is requesting that Commerce initiate.[27]

    Injury Test

    Because China is a “Subsidies Agreement Country” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from China materially injure, or threaten material injury to, a U.S. industry.

    Allegations and Evidence of Material Injury and Causation

    The petitioner alleges that imports of the subject merchandise are benefitting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. In addition, the petitioner alleges that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.[28]

    The petitioner contends that the industry's injured condition is illustrated by a significant and increasing volume of subject imports; reduced market share; underselling and Start Printed Page 22621price depression or suppression; lost sales and lost revenues; negative effects on the existing product development and production efforts of the domestic industry; and negative impact on the domestic industry's financial and operating indicators, such as sales, profits, return on investment, cash flow, capacity utilization, and employment.[29] We have assessed the allegations and supporting evidence regarding material injury, threat of material injury, and causation, and we have determined that these allegations are properly supported by adequate evidence, and meet the statutory requirements for initiation.[30]

    Initiation of CVD Investigation

    Based on the examination of the Petition, we find that the Petition meets the requirements of section 702 of the Act. Therefore, we are initiating a CVD investigation to determine whether imports of quartz surface products from China benefit from countervailable subsidies conferred by the GOC. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination no later than 65 days after the date of this initiation.

    Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on all but four of the alleged subsidy programs. For a full discussion of the basis for our decision to initiate on each program, see Initiation Checklist. A public version of the initiation checklist for this investigation is available on ACCESS.

    Respondent Selection

    The petitioner named 301 companies [31] as producers/exporters of quartz surface products in China. Commerce intends to follow its standard practice in CVD investigations and calculate company-specific subsidy rates in this investigation. In the event Commerce determines that the number of companies is large and it cannot individually examine each company based upon Commerce's resources, where appropriate, Commerce intends to select mandatory respondents based

    on U.S. Customs and Border Protection (CBP) data for U.S. imports of quartz surface products from China during the POI under the appropriate Harmonized Tariff Schedule of the United States number listed in the “Scope of the Investigation,” in the Appendix.

    On May 1, 2018, Commerce released CBP data under Administrative Protective Order (APO) to all parties with access to information protected by APO and indicated that interested parties wishing to comment regarding the CBP data and respondent selection must do so within three business days of the publication date of the notice of initiation of this CVD investigation.[32] Commerce will not accept rebuttal comments regarding the CBP data or respondent selection.

    Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on Commerce's website at http://enforcement.trade.gov/​apo.

    Comments must be filed electronically using ACCESS. An electronically filed document must be received successfully, in its entirety, by ACCESS no later than 5:00 p.m. ET on the date noted above. We intend to finalize our decisions regarding respondent selection within 20 days of publication of this notice.

    Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 351.202(f), copies of the public versions of the Petition have been provided to the GOC via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petition to each exporter named in the Petition, as provided under 19 CFR 351.203(c)(2).

    ITC Notification

    We will notify the ITC of our initiation, as required by section 702(d) of the Act.

    Preliminary Determinations by the ITC

    The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of quartz surface products from China are materially injuring, or threatening material injury to, a U.S. industry.[33] A negative ITC determination will result in the investigation being terminated.[34] Otherwise, this investigation will proceed according to statutory and regulatory time limits.

    Submission of Factual Information

    Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). When submitting factual information, 19 CFR 351.301(b) requires any party to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted [35] and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct.[36] Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in this investigation.

    Extensions of Time Limits

    Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant Start Printed Page 22622untimely-filed requests for the extension of time limits. Parties should review Extension of Time Limits; Final Rule, 78 FR 57790 (September 20, 2013), available at http://www.gpo.gov/​fdsys/​pkg/​FR-2013-09-20/​html/​2013-22853.htm,, prior to submitting factual information in this investigation.

    Certification Requirements

    Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.[37] Parties must use the certification formats provided in 19 CFR 351.303(g).[38] Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements.

    Notification to Interested Parties

    Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, Commerce published Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 22, 2008). Parties wishing to participate in this investigation should ensure that they meet the requirements of these procedures (e.g., the filing of letters of appearance as discussed at 19 CFR 351.103(d)).

    This notice is issued and published pursuant to sections 702 and 777(i) of the Act and 19 CFR 351.203(c).

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    Dated: May 7, 2018.

    Gary Taverman,

    Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance.

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    Appendix I

    Scope of the Investigation

    The merchandise covered by the investigation is certain quartz surface products.[39] Quartz surface products consist of slabs and other surfaces created from a mixture of materials that includes predominately silica (e.g., quartz, quartz powder, cristobalite) as well as a resin binder (e.g., an unsaturated polyester). The incorporation of other materials, including, but not limited to, pigments, cement, or other additives does not remove the merchandise from the scope of the investigation. However, the scope of the investigation only includes products where the silica content is greater than any other single material, by actual weight. Quartz surface products are typically sold as rectangular slabs with a total surface area of approximately 45 to 60 square feet and a nominal thickness of one, two, or three centimeters. However, the scope of this investigation includes surface products of all other sizes, thicknesses, and shapes. In addition to slabs, the scope of this investigation includes, but is not limited to, other surfaces such as countertops, backsplashes, vanity tops, bar tops, work tops, tabletops, flooring, wall facing, shower surrounds, fire place surrounds, mantels, and tiles. Certain quartz surface products are covered by the investigation whether polished or unpolished, cut or uncut, fabricated or not fabricated, cured or uncured, edged or not edged, finished or unfinished, thermoformed or not thermoformed, packaged or unpackaged, and regardless of the type of surface finish.

    In addition, quartz surface products are covered by the investigation whether or not they are imported attached to, or in conjunction with, non-subject merchandise such as sinks, sink bowls, vanities, cabinets, and furniture. If quartz surface products are imported attached to, or in conjunction with, such non-subject merchandise, only the quartz surface product is covered by the scope.

    Subject merchandise includes material matching the above description that has been finished, packaged, or otherwise fabricated in a third country, including by cutting, polishing, curing, edging, thermoforming, attaching to, or packaging with another product, or any other finishing, packaging, or fabrication that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the quartz surface products.

    The scope of the investigation does not cover quarried stone surface products, such as granite, marble, soapstone, or quartzite. Specifically excluded from the scope of the investigation are crushed glass surface products. Crushed glass surface products are surface products in which the crushed glass content is greater than any other single material, by actual weight.

    The products subject to the scope are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under the following subheading: 6810.99.0010. Subject merchandise may also enter under subheadings 6810.11.0010, 6810.11.0070, 6810.19.1200, 6810.19.1400, 6810.19.5000, 6810.91.0000, 6810.99.0080, 6815.99.4070, 2506.10.0010, 2506.10.0050, 2506.20.0010, 2506.20.0080. The HTSUS subheadings set forth above are provided for convenience and U.S. Customs purposes only. The written description of the scope is dispositive.

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    Footnotes

    1.  See the petitioner's Letter, “Petitions for the Imposition of Antidumping and Countervailing Duties: Certain Quartz Surface Products from the People's Republic of China,” dated April 17, 2018 (the Petition).

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    2.  Id. at Volume I of the Petition at I-2.

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    3.  See the petitioner's Letter, “Certain Quartz Surface Products from the People's Republic of China: Response to Supplemental Questions—General Issues,” dated April 24, 2018 (General Issues Supplement). See also Petitioner's Letter, “Certain Quartz Surface Products from the People's Republic of China: Response to Supplemental Questions—Countervailing Duties,” dated April 24, 2018.

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    4.  See the petitioner's Letter, “Certain Quartz Surface Products from the People's Republic of China: Response to Supplemental Questions re: Scope,” dated May 1, 2018.

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    5.  See letter from M S International, Inc., “Quartz Surface Products from the People's Republic of China: Comments on the Lack of Standing of the Petitioner and Requests for Action,” dated May 1, 2018 (M S International Standing Challenge).

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    6.  See the petitioner's letter, “Certain Quartz Surface Products from the People's Republic of China: Petitioner's Response to MSI's Comments on Standing,” dated May 3, 2018 (Industry Support Supplement).

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    7.  letter from M S International, Inc., “Antidumping and Countervailing Duty Investigations of Quartz Surface Products from the People's Republic of China: Reply to Petitioner's Comments on Lack of Standing,” dated May 4, 2018 (Second M S International Standing Challenge).

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    8.  See “Determination of Industry Support for the Petition” section, infra.

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    9.  See General Issues Supplement, at 3-5.

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    10.  See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997) (Preamble).

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    11.  See 19 CFR 351.102(b)(21) (defining “factual information”).

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    13.  See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011). See also Enforcement and Compliance: Change of Electronic Filing System Name, 79 FR 69046 (November 20, 2014) for details of Commerce's electronic filing requirements, which went into effect on August 5, 2011. Information on help using ACCESS can be found at https://access.trade.gov/​help.aspx,, and a handbook can be found at https://access.trade.gov/​help/​Handbook%20on%20Electronic%20Filling%20Procedures.pdf.

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    14.  See Letter from Commerce, “Countervailing Duty Petition on Certain Quartz Surface Products from the People's Republic of China,” dated April 18, 2018.

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    15.  See section 771(10) of the Act.

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    16.  See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).

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    17.  See Volume I of the Petition, at 13.

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    18.  For a discussion of the domestic like product analysis as applied to this case and information regarding industry support, see Countervailing Duty Investigation Initiation Checklist: Certain Quartz Surface Products from the People's Republic of China (Initiation Checklist), at Attachment II, Analysis of Industry Support for the Antidumping and Countervailing Duty Petitions Covering Certain Quartz Surface Products from the People's Republic of China (Attachment II). This checklist is dated concurrently with this notice and on file electronically via ACCESS. Access to documents filed via ACCESS is also available in the Central Records Unit, Room B8024 of the main Department of Commerce building.

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    19.  See Volume I of the Petition, at 3 and Exhibit I-3; see also General Issues Supplement, at 13-14 and Exhibit 15.

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    20.  Id. at 3 and Exhibit I-3; see also General Issues Supplement, at 13-14 and Exhibit 15; see also Industry Support Supplement, at 3 and Exhibit 1. For further discussion, see Initiation Checklist, at Attachment II.

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    21.  See M S International Standing Challenge.

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    22.  See Second M S International Standing Challenge.

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    23.  See Volume I of the Petition, at 3 and Exhibit I-3; see also General Issues Supplement at 13-14 and Exhibit 15; see also Industry Support Supplement at 3 and Exhibit 1. For further discussion, see Initiation Checklist at Attachment II.

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    24.  Id.; see also section 702(c)(4)(D) of the Act.

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    25.  See Initiation Checklist, at Attachment II.

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    28.  See General Issues Supplement, at 14-15 and Exhibit 16.

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    29.  See Volume I of the Petition, at 10-30 and Exhibits I-3 and I-9 through I-19; see also General Issues Supplement, at 14-15 and Exhibits 16 through 18.

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    30.  See Initiation Checklist at Attachment III, Analysis of Allegations and Evidence of Material Injury and Causation for the Antidumping and Countervailing Duty Petitions Covering Certain Quartz Surface Products from the People's Republic of China.

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    31.  See Volume I of the Petition, at Exhibit I-8.

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    32.  See Memorandum, “Certain Quartz Surface Products from the People's Republic of China Countervailing Duty Petition: Release of Customs Data from U.S. Customs and Border Protection,” dated May 1, 2018.

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    33.  See section 703(a)(2) of the Act.

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    34.  See section 703(a)(1) of the Act.

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    37.  See section 782(b) of the Act.

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    38.  See Certification of Factual Information to Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also frequently asked questions regarding the Final Rule, available at http://enforcement.trade.gov/​tlei/​notices/​factual_​info_​final_​rule_​FAQ_​07172013.pdf.

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    39.  Quartz surface products may also generally be referred to as engineered stone or quartz, artificial stone or quartz, agglomerated stone or quartz, synthetic stone or quartz, processed stone or quartz, manufactured stone or quartz, and Bretonstone®.

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    [FR Doc. 2018-10532 Filed 5-15-18; 8:45 am]

    BILLING CODE 3510-DS-P