North freezes southern assets at Kumgang in owners’ presence

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North freezes southern assets at Kumgang in owners’ presence

North Korea froze privately owned South Korean properties at the Mount Kumgang resort yesterday, as dozens of officials from related companies watched.

The Unification Ministry in Seoul said yesterday North Korean officials posted stickers on South Korean facilities indicating they had been frozen. North Korea last week seized five South Korean government-owned facilities and said it would start freezing remaining South Korean properties starting this week.

The North plans to shut down all South Korean assets by Friday. South Korean companies own a combined 359.3 billion won ($325.5 million) worth of land and buildings there.

Freezing assets at the troubled resort was the latest move by the increasingly impatient North Korea in response to South Korea’s halting of the tours. Since the resort was launched in 1998 with a South Korean company, Hyundai Asan, in charge, the Mount Kumgang tour packages had attracted more 2 million South Koreans. But the program was suspended in July 2008, when a South Korean woman was fatally shot by a North Korean soldier in a nearby military zone.

Seoul has called for security assurances from North Korea but Pyongyang has countered that it had already done enough when its leader Kim Jong-il told Hyundai Group Chairwoman Hyun Jeong-eun last August that he would provide necessary security for tourism.

North Korea has appeared particularly eager to resume the tour program this year. Analysts here have speculated that the North is feeling the effects of international financial and arms trade embargoes imposed after its nuclear test last May. North Korea once raked in about $30 million a year from South Korean tourists visiting Mount Kumgang. It said last week it was taking over South Korean facilities as “compensation for our loss stemming from the extended suspension of the tours.”

In February, the two Koreas met to discuss the resumption of the tours but managed no breakthrough. The North unilaterally set April 1 as the starting date for the tours and threatened to take “extreme steps” if the South didn’t meet the deadline.

South Korea has talked of taking strong measures in response but has yet to discuss what they would entail.

An official with the Unification Ministry yesterday reiterated the long-held government stance that the South “cannot accept” the North Korean decision to freeze and seize South Korean assets.

“We’re reviewing our options,” he said. “We will monitor the situation until Friday.”

By Yoo Jee-ho []
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