North seizes assets at Mt. Kumgang

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North seizes assets at Mt. Kumgang


North Korea announced yesterday that it would seize five of the South Korean government’s assets in Mount Kumgang resort area. Three assets ① the duty-free shop, ② cultural center and ③ hot spring - are seen in this file photo. The family reunion center and fire station are not shown. [JoongAng Ilbo]

Pyongyang brought an abrupt end to a 12-year-old goodwill enterprise between the two Koreas yesterday, announcing it would seize frozen South Korean assets at Mount Kumgang.

Myongseungji General Development Guidance Bureau, which oversees Mount Kumgang tourism for North Korea, said the North will either take ownership of the assets or hand them over to a new partner.

South Korean Unification Ministry spokesman Chun Hae-sung said the measure violates agreements between business partners and governments of the two Koreas, as well as international laws. “We can’t accept this move,” Chun said. “This is an irresponsible measure that basically drives inter-Korean relations to the brink.”

Chun added the South would take “strong steps” in response but declined to discuss what those measures would be.

The North’s decision came after two days of on-site inspection of the tourist resort by its officials. South Korean government-owned assets, including a family reunion center, a fire station and a duty-free shop, were frozen last week as the North grew impatient with the South’s reluctance to resume the tour programs.

Other privately owned assets, such as hotels and a golf course, will be frozen and South Korean employees there will be asked to leave, the General Development Guidance Bureau said. Overall, South Korean companies own a combined 359.3 billion won ($324 million) worth of land and buildings at Mount Kumgang, according to the Unification Ministry.

The North Korean bureau said the seizure “is in compensation for our loss stemming from the extended suspension of the tours,” according to the Korean Central News Agency. “It’s a tragedy and a shame that South Koreans’ path to Mount Kumgang has been severed for good.”

Tours to Mount Kumgang have been on hold since July 2008, when a South Korean woman was shot dead by a North Korean soldier in a restricted military zone near the resort.

After the shooting, the South demanded an official apology and safety assurances before the tours could begin again. The North claimed it had taken the necessary measures. Last August, when Hyundai Group Chairwoman Hyun Jeong-eun met North Korean leader Kim Jong-il, Kim vowed to provide necessary facilities and security for tourism.

In February, a round of inter-Korean talks about the tours yielded no results, and in late March the North threatened to take “extreme steps” if they weren’t resumed by April 1. Revenues from the tours have dropped off to the point where Hyundai’s affiliate Hyundai Asan, which is in charge of the program, has reduced its workforce to nearly one-third.

Analysts have said North Korea is increasingly anxious to resume the tours because it is feeling the effects of international financial and arms trade embargoes imposed after its nuclear test last May. At its peak, the tour program attracted 300,000 tourists and brought in about $30 million a year to North Korea.

In addition, North Korea charged the South was “deliberately linking the sinking of its warship [Cheonan]” to North Korea and “went to the length of crying out for the total severance of the North-South relations.” South Korean officials have tentatively identified an external blast as the cause, and a North Korean torpedo attack has been suspected.

By Yoo Jee-ho []
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