(Cite as: 52 FR 48737)

NOTICES

DEPARTMENT OF COMMERCE

[C-469-702]

Preliminary Affirmative Countervailing Duty Determination; Certain Granite Products From Spain

Thursday, December 24, 1987

*48737 AGENCY: Import Administration, International Trade Administration, Commerce.

ACTION: Notice.

SUMMARY: We preliminarily determine that benefits which constitute subsidies within the meaning of the countervailing duty law are being provided to manufacturers, producers or exporters in Spain of certain granite products as described in the "Scope of Investigation" section of this notice. The estimated net subsidy is 2.51 percent ad valorem for all manufacturers, producers or exporters in Spain of certain granite products, except Granitos Ibericos-Grayco, S.A. ("GIG"), and Santal, S.A. ("Santal"), whose estimated net subsidy rates are de minimis (less than 0.50 percent).

We have notified the U.S. International Trade Commission (ITC) of our determination. We are directing the U.S. Customs Service to suspend liquidation of all entries of certain granite products from Spain, with the exception of those certain granite products produced and exported by GIG and Santal, that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice and to require a cash deposit or bond on entries of these products in the amount equal to the estimated net subsidy. Although entries produced and exported by GIG and Santal are not subject to the suspension of liquidation, these companies are not excluded from the preliminary determination.

If this investigation proceeds normally, we will make a final determination by March 3, 1988.

EFFECTIVE DATE: December 24, 1987.

FOR FURTHER INFORMATION CONTACT:Loc Nguyen or Barbara Tillman, Office of Investigations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 377-0167 or 377-2438.

SUPPLEMENTARY INFORMATION:

Preliminary Determination

Based on our investigation, we preliminarily determine that there is reason to believe or suspect that benefits which constitute subsidies within the meaning of section 701 of the Tariff Act of 1930, as amended (the Act), are being provided to manufacturers, producers or exporters in Spain of certain granite products. For purposes of this investigation, the following programs are preliminarily found to confer subsidies:

- Short-term loans provided under the Privileged Circuit Export Credits Program

- Grants under the Large Area of Industrial Expansion of Galicia Program (LAIEG)

- Preferential access to official credit under LAIEG

- Certain grants provided by the Basque regional government

We preliminarily determine the estimated net subsidy to be 2.51 percent ad valorem for all manufacturers, producers or exporters in Spain of certain granite products, except GIG and Santal.

Case History

Since the last Federal Register publication pertaining to this investigation [the Notice of Initiation (52 FR 31652, August 21, 1987)], the following events have occurred. On August 27, 1987, we presented a *48738 questionnaire to the government of Spain in Washington, DC, concerning petitioner's allegations. On October 14, 1987, we received responses from the government of Spain and the following companies: GIG, Artemarmol, S.A. ("Artemarmol"), Ingemar, S.A. ("Ingemar") and Ingemarga, S.A. ("Ingemarga"). These were the only companies the government of Spain identified as producing and exporting the subject merchandise to the United States. We received an additional response from the government on October 27, 1987. On November 6, we received a request for exclusion pursuant to 19 CFR 355.38 and a voluntary response from Modulgranito Iberico, S.A. ("MGI"). On November 18, we notified counsel for MGI that MGI's request for exclusion was not timely pursuant to 19 CFR 355.38 and that the company will, therefore, not be excluded from any countervailing duty order that the Department might issue in this investigation. We further informed counsel for MGI that the Department will not investigate the response submitted by MGI because this newly formed company did not begin exporting the subject merchandise to the United States until mid-1987, which is outside our review period of calendar year 1986. On December 4, 1987, we sent a letter to MGI's counsel to confirm the November 18 notification regarding MGI.

On November 13, 1987, we presented supplementary questionnaires to the government of Spain and the above-referenced companies. In addition, we also requested information from four other companies which we discovered were exporting the subject merchandise to the United States. These companies are Granitos Espanoles, S.A. ("GE"), Marmoles y Granitos de Espana, S.A. ("M&G"), Ramilo, S.A. ("Ramilo") and Santal. On November 25, we received a supplemental response from the Government of Spain. On November 27 and December 1, we received responses from Ramilo and Santal. On November 27, December 2, December 4, December 8, December 11, and December 16, 1987, we received supplemental responses from Artemarmol, GIG, Ingemar, Ingemarga and Ramilo.

Because we have not received responses from GE and M&G, we were unable to include them in the calculations for the preliminary determination. Therefore, for purposes of the preliminary determination, the country-wide rate will apply to these two companies as well. If we receive GE's and M&G's responses by the date of the preliminary determination, we will verify the responses and include them in the calculation of the final determination. If we do not receive their responses by this date, we may have to use best information available, in accordance with section 776(b) of the Act, to calculate a rate for these two companies in the final determination.

On September 23, 1987, the petitioner requested that the preliminary determination be postponed for 21 days. Pursuant to section 703(c)(1)(A) of the Act, we postponed the preliminary determination to no later than November 12, 1987. On November 4, 1987, the petitioner requested that we further postpone the preliminary determination by an additional 36 days. Accordingly, on November 6, 1987, we extended the date of the preliminary determination to December 18, 1987.

Scope of Investigation

The products covered by this investigation are certain granite products from Spain. Certain granite products are 3/8 inch (1 cm) to 2 1/2 inches (6.34 cm) in thickness and include the following: rough sawed granite slabs; face- finished granite slabs; and finished dimensional granite including, but not limited to, building facing, flooring, wall and floor tiles, paving, and crypt fronts. Certain granite products do not include monumental stones, crushed granite, or curbing. Certain granite products are currently classified under TSUSA item number 513.74.00 and under S item numbers 2516.12.00, 6802.23.00 and 6802.93.00.

Analysis of Programs

Throughout this notice, we refer to certain principles applied to the facts of the current investigation. These general principles are described in the "Subsidies Appendix" attached to the notice of Cold-Rolled Carbon Steel Flat- Rolled Products from Argentina: Final Affirmative Countervailing Duty Determination and Countervailing Duty Order (49 FR 18006, April 26, 1984).

Consistent with our practice in preliminary determinations, when a response to an allegation denies the existence of a program, receipt of benefits under a program, or eligibility of a company or industry under a program, and the Department has no persuasive evidence showing that the response is incorrect, we accept the response for purposes of the preliminary determination. All such responses, however, are subject to verification. If the response cannot be supported at verification, and a program is otherwise countervailable, it will be considered a subsidy in the final determination.

In doing our subsidy rate computation, we first calculated an overall company-specific rate for each company. We found that, during the review period, two companies, GIG and Santal, had de minimis and zero rates, respectively. Therefore, they were not included in the calculation of the country-wide rate. We based our calculation of the country-wide rate on the countervailable benefits and sales of those respondents whose overall company- specific rates are above de minimis. Although GIG's and Santal's rates are de minimis during the review period, there are indications that these two companies might have received countervailable benefits after the review period but before the preliminary determination. Therefore, we will not exclude them from our preliminary determination. We will verify their responses and will consider whether these companies should be excluded from the final determination.

For purposes of this preliminary determination, the period for which we are measuring subsidization ("the review period") is calendar year 1986. This period coincides with the most recently completed fiscal year of the respondent companies.

Based upon our analysis of the petition and the responses to our questionnaires, we preliminarily determine the following:

I. Programs Preliminarily Determined to Confer Subsidies

We preliminarily determine that subsidies are being provided to manufacturers, producers or exporters in Spain of certain granite products under the following programs:

A. Short-Term Loans Under the Privileged Circuit Export Credits Program

Petitioner alleged that exporters of certain granite products from Spain are benefiting from a system of short-term preferential loans mandated by the government of Spain for exporters. Under this system of "privileged-circuit export credits," at least four types of loans are alleged to be avilable to exporters of certain granite products: (1) Working capital loans, (2) pre- financing of exports, (3) short-term export credits or post-financing of exports, and (4) commercial service loans.

In its response, the government of Spain stated that it required all Spanish commercial banks to maintain a specific percentage of their lendable funds (the "investment coefficient") in privileged-circuit accounts. These funds were made available to exporters at below-market interest rates through a variety of credit programs, including pre-financing and *48739 post- financing of exports and commercial service loans.

Under the terms of a Treasury Order, dated April 14, 1982, the working-capital loan program for exporters was gradually phased out and terminated on January 12, 1986. With respect to the other three types of export financing available under this program, Royal Decree 2254/85 of November 20, 1985, increased interest rates applicable to these loans and is gradually reducing the maximum amount to be financed. The maximum interest rate applicable to these loans is now the average rate paid on Spanish Treasury bills of one year or more in the semester preceding the loan, plus two percentage points. According to the government response, the maximum amount of allowable financing has gradually been decreased, starting on January 1, 1986, by 10 percent at the beginning of each semester until the program is totally eliminated in four-and-a-half years. The maximum amount of allowable financing for short-term export post/financing was reduced to 59 percent of the export value as of July 1, 1987, and to 55.8 percent of the export value for the pre-financng of exports as of the same date. Furthermore, the government of Spain stated that the "investment coefficient," which was the source of the funding for the privileged circuit loans to exporters, was discontinued as of February 28, 1987, by Royal Decree 321/1987 of February 27, 1987.

While there is no direct outlay of government funds, the benefits conferred on the companies are the result of government-mandated program to promote exports. According to the government and company responses, the producers and exporters of granite benefited from three of the four privileged circuit programs available to exporters: the working-capital loan program and the pre-financing and post-financing export programs.

1. Working capital loans. Under the privileged circuit programs, firms may obtain working capital loans for one year, although, from the company responses, it appears that the terms may be slightly longer than one year in duration. The amount of loans for which a firm is eligible is based on a specified percentage of its previous year's exports. According to the government response, these loans were no longer available as of January 1, 1986, pursuant to a Treasury Order of April 14,1982. GIG, Ingemar, and Ramilo reported that they had working capital loans outstanding during the review period.

As stated in section I.A. above, although no direct outlay of government funds is used to finance these loans, they are the result of a government-mandated program to promote exports. Because availability of this type of financing is contingent upon exports, we preliminarily determine that it is countervailable to the extent that it is offered at preferential rates.

To determine whether these loans are made at preferential rates, we compared the interest rates charged on working-capital loans with the appropriate benchmark. Because the terms of these loans were a year or longer, we determine that the most appropriate benchmark is the "one to three years" lending rate charged by Spanish private banks as published in the Boletin Estadistico of the Banco de Espana. This comparison shows that the interest rates on these export loans are below the benchmark. Accordingly, we preliminarily determine this program to be countervailable.

To calculate the benefit, we used our short-term loan methodology and compared the amount of interest actually paid during the review period to the amount the companies would have had to pay under the benchmark. In this case, the government of Spain's response does not indicate that working-capital export loans are tied to specific export transactions. Therefore, for the country- wide rate, we allocated Ingemar and Ramilo's 1986 benefits over the value of exports of those respondent companies whose overall estimated net subsidy rates are above de minimis (0.50 percent or above). The country-wide rate for this program is 0.20 percent ad valorem. The rate is 0.02 percent ad valorem for GIG and zero for Santal.

Although the government response states that the provision of these types of loans was terminated on January 1, 1986, our calculations do not reflect this change. The respondent companies report having working-capital export loans outstanding through 1987, loans which are financing current exports of the subject merchandise from Spain. We will carefuly examine changes in this program during verification.

2. Pre-financing of exports. Artemarmol, Ingemar and Ramilo reported that they received pre-financing export loans. According to the government of Spain, the maximum term of these loans is up to six months. Although no direct outlay of government funds is used to finance these loans, they, like the working-capital loans, are the result of a government-mandated program to promote exports. Because availability of this type of financing is contingent upon exports, we preliminarily determine that it is countervailable to the extent that it is offered at preferential rates.

To determine whether these loans were made at preferential rates, we compared the interest rates charged on export pre-financing loans to the appropriate benchmark, which we determine is the "three-month" lending rate charged by Spanish private banks as published in the Boletin Estadistico of the Banco de Espana. This comparison shows that the interest rates on these export loans are below the benchmark. Accordingly, we preliminarily determine this program to be countervailable.

To calculate the benefit arising from these loans, we used our short-term loan methodology and compared the amount of interest actually paid during the review period to the amount the companies would have had to pay under the benchmark. The government of Spain's response states that pre-financing loans are tired to specific export transactions. Artemarmol did tie each loan to a specific shipment. Ingemar and Ramilo did not. Therefore, as best information available in accordance with section 776(b) of the Act, we allocated the 1986 benefits for Artemarmol, Ingemar and Ramilo over the value of exports of the subject merchandise to the United States of all non-de minimis companies to calculate an estimated net subsidy of 1.82 percent ad valorem. The rate is zero for GIG and Santal.

Although the government response states that the current rates of interest charged under this program are higher than those charged during the review period and that the "investment coefficient" which was the source of funding for privileged circuit loans to exporters was discontinued as of February 28, 1987, our calculations do not reflect these changes because we do not have complete information concerning the current level of utilization of these loans. We will carefully examine the changes in this program during verification.

3. Post-financing of exports. Artemarmol reported that it received post- financing export loans with 120 day terms. Because availability of this type of financing is contingent upon exports, we preliminarily determine that it is countervailable to the extent that it is offered at preferential rates.

To determine whether these loans were made at preferential rates, we compared the interest rates charged on post-financing export loans during the review period to the appropriate benchmark, which we determine is the "three-month" lending rate charged by Spanish private banks as published in the Boletin Estadistico of the Banco de *48740 Espana. This comparison shows that the interest rates on these export loans are below the benchmark. Accordingly, we preliminarily determine this program to be countervailable.

To calculate the benefit arising from these loans, we used our short- term loan methodology and compared the amount of interest actually paid during the review period to the amount the companies would have had to pay under the benchmark. The loans reported by Artemarmol are tied to specific shipments of the subject merchandise to the United States. For the country-wide rate, we therefore allocated the company's 1986 benefit over the value of exports of the subject merchandise to the United States of all non-de minimis companies. The estimated net subsidy in 0.02 percent ad valorem. The rate is zero for GIG and Santal.

B. Regional Investment Incentives

Petitioner alleged that the granite industry in Spain may have benefited from certain regional investment programs.

1. Grants under the Large Area of Industrial Expansion of Galicia Program (LAIEG)--Royal Decree 1409/1981.

The government of Spain stated that, through Royal Decree 1409/1981 of June 19, 1981, a program entitled "Large Area of Industrial Expansion of Galicia" was established to award grants or loans for investment in new capital goods and/or for generation of employment to companies in the region of Galicia and in other parts of Spain that plan to invest in Galicia. The government of Spain stated that similar programs are available for other less develop regions in Spain such as Andalusia, Castille- La Mancha, Old Castille and Leon, and Extramadura. There is no indication, however, the these grant programs are available to to all regions of Spain. Nor is these any indication that the programs are the same for all regions in which these programs are available.

Because this program is limited by the central Government of Spain to companies in a specific region (Galicia), we preliminarily determine that this program confers a subsidy. GIG and Ingemarga reported that they received grants under this program.

To calculate the value of the subsidy, we used the grant methodology outlined in the Subsidies Appendix. For grant calculations, we prefer to use as the discount rate a company-specific weighted cost of capital; however, in this case, the government of Spain was unable to give us the national average rate of return on equity. Therefore, we were unable to calculate a company-specific rate. Instead, we are using as the discount rate the national average commercial interest rate for loans of over three years for the year in which the grant was authorized. This rate is published by the Banco de Espana in its Boletin Estadistico. To calculate the country-wide rate, we allocated Ingemarga's 1986 benefit over total sales of all non-de minimis companies to calculate an estimated net subsidy of 0.39 percent ad valorem. The rate is 0.43 percent ad valorem for GIG and zero for Santal.

2. Preferential access to official credit under LAIEG--Royal Decree 1409/1981.

Ingemarga reported that it received long-term financing from official lines of credit through the LAIEG program.

Because this program is provided by the central government of Spain to a specific region of Spain (Galicia), we preliminarily determine that this program is limited to a specific enterprise or industry or group of enterprises or industries. To determine whether these loans are given at rates that are inconsistent with commercial considerations, we compared the interest rates to the appropriate benchmark.

For fixed rate long-term loans to creditworthy companies, we prefer to use a company-specific commercial loan rate whenever possible. However, in this case, Ingemarga did not receive comparable commercial long-term credit in the year in which it received the LAIEG loan. Therefore, we used as our benchmark the national average commercial interest rate for loans of "over three years" applying to the year in which the terms of the loan were agreed upon. This rate is published by the Banco de Espana in its Boletin Estadistico. Because we were unable to obtain the national average rate of return on equity, we used the benchmark interest rate as the discount rate as well.

For the country-wide rate, we allocated Ingemarga's 1986 benefit over total sales of all non-de minimis companies to calculate an estimated net subsidy of 0.05 percent ad valorem. The rate is zero for GIG and Santal.

3. Grants provided by the Basque Regional Government--Decree 153/1985.

According to the response of Ingemar, the only company under investigation located in the Basque region, the Basque regional government issued Decree 153 in 1985, which established grants for commercial promotion activities, such as market studies, market survey studies, and establishment or expansion of commercial entities or divisions specializing in promotional activities. The amount of the grant can be up to 20 percent of investment costs in capital goods with a cap of 5,000,000 pesetas and up to 25 percent of operating costs during the initial period, with a cap of two years and 4,000,000 pesatas. The funding for the program is provided by the Basque regional government from its general revenue.

Ingemar stated that all companies located in the Basque region are eligible for benefits under this decree. The decree, however, states that grants are to be used for commercial promotion activities that will contribute to "the exportation of the productive sectors of the Basque country." Since no other purpose except "exportation" is specified in the decree, we preliminarily determine that these grants are provided solely to promote exports and, as such, constitute export subsidies. Ingemar reported that it received a grant under this program to commence commercial activities in the United States and to establish a company in the United States.

To calculate the benefit from this grant, we used the grant methodology detailed in the Subsidies Appendix. Since Ingemar received a grant under this program during the review period, and the amount received was less than 0.50 percent of the value of its exports to the United States for that year, we allocated the entire amount of this grant to the review period.

For the country-wide rate, we allocated the amount of the grant over the value of exports to the United States of all non-de minimis companies to calculate an estimated net subsidy for of 0.03 percent ad valorem. We allocated the benefit over exports to the United States because the grant was given specifically to establish commercial activities in the United States. The rate is zero for GIG and Santal.

II. Programs Preliminarily Determined Not to Confer a Subsidy

We preliminarily determine that subsidies are not being provided to manufacturers, producers or exporters in Spain of certain granite products under the following programs:

A. Reduction in Import Duties on Imported Tools and Equipment

In our initiation, we stated that we would investigate whether the producers and exporters of granite receive countervailable benefits from reduction in import duties. According to the response, as part of Spain's entry into the European Economic Community (EEC), any Spanish manufacturer importing machinery for new investment from an EEC country is entitled to an *48741 exemption of import duties if such machinery is not produced in Spain. These exemptions were authorized by Royal Decree 2386/1985 and are administered by the General Directorate of Customs and the Ministry of Economy and Finance. The decree authorizes tariff suspensions and reductions on investment goods imported from the EEC which are not manufactured in Spain, and which are intended for the modernization or conversion of, among others, the textile, chemical, pharmaceutical, automotive, capital goods, household appliances, foodstuffs, computer technology, electronics, shipbuilding, steel, mining and energy industries. Because this program is not limited to a specific enterprise or industry or group of enterprises or industries, we preliminarily determine that it is not countervailable.

B. Provincial Grants Provided by the Basque Regional Government

In our initiation, we stated that we would investigate whether the producers and exporters of granite receive countervailable benefits from cash grants given either by the central government of Spain or by the regional governments. According to Ingemar's response, the Basque regional government and the governments of each of the three Basque provinces administer assistance programs for all companies in the Basque region that make investments in capital goods. Under decree 149/85 the Basque regional government administers grants to "large" companies (more than 750,000,000 pesetas total capital and more than 400 employees) throughout the Basque region. The three provincial governments within the Basque region administer these grants to "small- and medium-size" companies (less than 750,000,000 pesetas total capital and less than 400 employees) within their provinces.

Decree 41/85 of the provincial government of Guipuzcoa applies to the small companies within the province of Guipuzcoa. The decree specifically lists a wide range of sectors and industries that are eligible to receive assistance under this program including chemicals, aviculture, hotels, land transportation, technical investigations, services rendered to companies, recovery of products and other manufacturing industries. Ingemar submitted a chart showing that 329 applicants in 23 sectors and industries including fishing, smelting and iron works, mon-metal minerals, metallurgy, mechanical shops, electronics, machinery, food, textiles, paper, rubber and plastics, construction, repairs, transport, and services were approved for grants in 1985, the year the program went into effect.

Because this program is not limited to a specific enterprise or industry or group of enterprises or industries, we preliminarily determine that it is not countervailable.

C. Interest Rebates on Long-term Loans under Basque Regional Government Programs

Petitioner alleged that producers of the subject merchandise benefit from subsidies in the form of preferential loans, loan terms and loan guarantees. We requested information from each company under investigation on all long-term loans outstanding during the review period. Ingemar and Ingemarga reported long-term loans outstanding during the review period.

According to the responses, none of the companies involved in this investigation received medium or long-term loans on terms inconsistent with commercial considerations. However, Ingemar reported that it did receive reimbursement of a part of the interest it paid on long-term loans under an agreement made between the Basque regional government and the banks in the Basque region. The agreement stated that the program is available to all industries in those regions. The Basque government also provided us with information indicating that over 2,000 companies in a number of industries, including food, chemicals, textiles, paper, electronics and transportation, have received interest rebates under this program. Because these rebates are funded by the Basque regional government and have been provided to a wide range of industries within the Basque region, we preliminarily determine that this program is not limited to a specific enterprise or industry or group of enterprises or industries and, therefore, is not countervailable.

III. Programs Preliminarily Determined Not To Be Used

We preliminarily determine that the following programs were not used by manufacturers, producers or exporters in Spain of certain granite products during the review period:

A. Commercial Service Export Loans under the Privileged Circuit Export Credits Program

Petitioner alleged that exporters of certain granite products from Spain are benefiting from commercial service export loans under the Privileged Circuit Export program which provide for financing for market activities abroad. According to the responses, none of the companies had any such loans outstanding during the review period.

B. Warehouse Construction Loans

Petitioner alleged that the granite industry in Spain receives loans on terms inconsistent with commercial considerations to construct warehouse facilities adjacent to export loading zones. According to the responses, none of the companies have received any such loans.

C. Loans and Loan Guarantees from the Instituto Nacional de Industria (INI)

In our notice of initiation, we stated that we would investigate whether the producers and exporters of granite receive countervailable benefits under the loan and loan guarantee programs administered by the INI. According to the responses, none of the companies have received any such loans or loan guarantees.

D. Other Regional Investment Incentives

In our notice of initiation, we stated that we would investigate whether the producers and exporters of granite receive countervailable benefits under other regional investment incentives such as:

1. Reduction in import duties on imported tools and equipment. According to the responses, the only reduction and/or exemption in import duties which the companies received was that provided for in the program dealing with imports coming in from the EEC (see section II.A. above).

2. Reduction in taxes. According to the responses, none of the respondents receive any regional reduction in taxes.

3. Free or inexpensive land. According to the responses, none of the respondents have acquired free or inexpensive land as a result of any government-mandated program.

E. Grants from the Regional Board of the Province of Alava

According to the responses, none of the respondents are located in the Province of Alava; therefore, they are not eligible for benefits provided under this program.

IV. Programs for Which Additional Information is Needed

We preliminarily determine that we need additional information in order to determine whether the following programs confer subsidies on the manufacture, production or exportation of certain granite products from Spain.

*48742 A. Grants Provided by the Galician Ministry of Industry, Energy and Commerce--Decree 107/1984

According to the responses, GIG, Ingemar and Ingemarga received grants under Decree 107/1984 of the regional government of Galicia, which established financial support measures for companies that research in or exploit mineral resources throughout Galicia. The funding for this program is from the general budget of Galicia and not from the central government of Spain. We have not been provided with any information as to the extent of Galicia's mining sector, nor do we have any information to indicate whether this program covers Galicia's mining sector as a whole or whether it is limited to specific industries within the mining sector. Therefore, we will seek further information on this program prior to and at verification in order to make a decision on whether this program is countervailable in our final determination.

B. Grants Provided by the Basque Regional Government--Decree 146/1985

Ingemar responded that it received a grant from the Basque regional government under Decree 146/1985 for the generation of employment. The goal of this program is to facilitate the generation of employment in the Basque country in order to resolve social needs, provide access to the job market, provide job training, create jobs and reduce unemployment. Funding for this program comes from the Basque regional government's general budget. According to the decree, any company within the Basque region is eligible to receive grants under this program as long as it has a net increase in the number of its staff. However, we have not received any information on the types of industries within the Basque region which have actually received benefits under this program nor on the extent to which the government may exercise discretion in selecting such industries. Therefore, we will seek further information prior to and at verification in order to make a decision on whether this program is limited to a specific enterprise or industry or group of enterprises or industries in the final determination.

C. Interest Rebates on Long-Term Loans Provided by the Regional Government of Galicia

In its response, GIG reported that it received interest rebates on long-term loans under an agreement made between the Galician regional government and the banks in Galicia. The agreement stated that all small and medium-sized companies in Galicia are eligible to receive rebates under these agreements; however, we have not received any information on the types of industries which actually have received these rebates nor on the extent to which the government may exercise discretion in selecting such industries. Therefore, we will seek further information on this program prior to and at verification in order to make a decision on whether this program is countervailable in the final determination.

Verification

In accordance with section 776(a) of the Act, we will verify the information used in making our final determination.

Suspension of Liquidation

In accordance with section 703(d) of the Act, we are directing the U.S. Customs Service to suspend liquidation of all entries of certain granite products from Spain, with the exception of those certain granite products produced and exported by GIG and Santal, which are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register and to require a cash deposit or bond for each such entry of this merchandise equal to 2.51 percent ad valorem. Although entries produced and exported by GIG and Santal are not subject to the suspension of liquidation, these companies are not excluded from the preliminary determination. This suspension will remain in effect until further notice.

ITC Notification

In accordance with section 703(f) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all nonprivileged and nonproprietary information relating to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order, without the written consent of the Assistant Secretary for Import Administration.

If our final determination is affirmative, the ITC will determine whether these imports materially injure, or threaten material injury to, a U.S. industry within 120 days after the Department makes its preliminary affirmative determination, or 45 days after the Department makes its final determination, whichever is later.

Public Comment

In accordance with 19 CFR 355.35, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on this preliminary determination on February 2, 1988, at 10:00 a.m. at the U.S. Department of Commerce, Room 3708, 14th Street and Constitution Avenue NW., Washington, DC 20230. Individuals who wish to participate in the hearing must submit a request to the Assistant Secretary for Import Administration, Room B-099, at the above address within ten days of the publication of this notice in the Federal Register.

Requests should contain: (1) The party's name, address, and telephone number; (2) the number of participants; (3) the reason for attending; and (4) a list of the issues to be discussed. In addition, ten copies of the business proprietary version and seven copies of the nonproprietary version of the pre-hearing briefs must be submitted to the Assistant Secretary by January 26, 1987. Oral presentations will be limited to issues raised in the briefs. In accordance with 19 CFR 355.33(d) and 355.34, written views will be considered if received not less than 30 days before the final determination is due or, if a hearing is held, within seven days after the hearing transcript is available.

This determination is published pursuant to section 703(f) of the Act (19 U.S.C. 1671b(f)).

December 18, 1987.

Gilbert B. Kaplan,

Acting Assistant Secretary for Import Administration.

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