Asset seizure suicidalNorth Korea is testing our patience. Exacerbating the already-heightened tension with South Korea over its suspected involvement in the sinking of the Navy ship Cheonan and its subsequent spy and assassination attempt, North Korea recently made another desperado move against its neighbor.
The country announced that it will confiscate five properties owned by the South Korean government and freeze all private South Korean assets within the Mount Kumgang resort area. It will also kick out all South Korean supervisors and employees in the resort, threatening to end a 12-year tourism joint venture in the mountain resort. When pushed into a corner, one’s patience can explode. North Korea must remind itself that it is headed down a dark path with its reckless and rogue moves that discount agreements and rules.
The assets the North is threatening to seize include a family reunion center the South Korean government built at a cost of 55 billion won ($49.6 million), a cultural center, spa and duty-free shop - all built and owned by the South Korean government - and a tourism organization. North Korean officials froze the assets earlier this month and are now threatening to expropriate them.
At the same time, the country announced plans to freeze hotels owned by Hyundai Asan valued at 226.3 billion won as well as a golf course and a hotel resort that 36 South Korean companies invested in at a total cost of 320 billion won. North Korea declared that its actions mean South Korean access to Mount Kumgang will be cut forever, and the country suggests it will take over the assets owned by private companies as well. Such actions are unacceptable and outrageous.
The Mount Kumgang tourism program was suspended after a North Korean soldier shot a South Korean tourist there in July 2008. The South has maintained that it cannot resume the program unless North Korea fully accounts for the incident and promises to guarantee the safety of tourists. It is a legitimate demand. Yet North Korea has pressed for an unconditional reopening of the program. When South Korea remained steadfast, the North turned to bellicosity and extortion.
The government and companies must assert that North Korea is clearly violating international contracts and agreements. They must prepare steps to seek international lawsuits or mediation. We also must re-evaluate inter-Korean relations and policy. All joint ventures and business exchange efforts must be re-evaluated.
North Korea is making a suicidal move by attempting to seize our assets. If it has any sense left, it will withdraw the plan immediately.