Law on Rason free-trade zone revisedNorth Korea recently revised a law governing its Rason free trade zone in a bid to speed up development and attract more foreign investment, including from South Korea, officials in Seoul said yesterday.
According to the South Korean officials, a clause allowing “Korean compatriots living outside the Democratic People’s Republic of Korea [North Korea]” to engage in economic and trade activities in Rason has been newly included in the legal code.
The officials said the legal revision took effect on Jan. 27.
The border towns of Rajin and Sonbong in the northeastern part of the Korean Peninsula merged to form Rason, which became the North’s first free trade zone in December 1991. Rason lies near where the borders of North Korea, China and Russia meet.
But foreign investors have largely kept away from Rason due to worries about doing business with the isolated state, which is frequently sanctioned by international organizations for its provocative moves.
The Seoul officials said the North may have signaled its intent to reopen Rason to South Korean businesses through the latest legal revision.
The North has also lowered tax rates and simplified administrative procedures for foreign investors who want to establish branch and agent offices in Rason, said the officials.
Pyongyang had banned South Korean investors from Rason with a revision to the law on the free trade zone in 1999.
The reported revision in late January came after North Korea upgraded the status of Rason to a “special city” at the beginning of this year, in what appeared to be an attempt to revitalize its faltering economy.
Media reports also surfaced last week that China is seeking to extend its 10-year lease on the use of the Rajin Port by another decade, while Russia obtained a 50-year lease on one of the port’s piers.