Merchants probed over trade with Pyongyang

Trade between the two Koreas has been banned since the sinking of the Navy warship Cheonan last March.

But some merchants have ignored the government’s warnings and are under investigation for smuggling North Korean goods into the South, the Ministry of Unification said yesterday.

“We have continued efforts to block the illegal entry of North Korean products since May, and about 10 firms were found in this process to have broken the law,” Lee Jong-joo, spokeswoman for the ministry, said yesterday.

The firms are under investigation by South Korean prosecutors and are said to have mostly brought in marine products and mushrooms, labeling them as originating in China.

The government banned all North Korean products from entering the South as part of punitive measures taken in May in response to the sinking of the Cheonan, which Pyongyang has denied having any involvement in.

“The Korea Customs Service will implement stronger measures against the illegal entry of North Korean goods starting next month,” Lee said.

The Unification Ministry also released statistics on trade between the North and South for 2009 and 2010, which showed that the Kaesong Industrial Complex is just about all that binds the two Koreas in terms of trade.

Inter-Korean trade hit $1.91 billion last year, up 14 percent from $1.68 billion in 2009. This was mostly due to the Kaesong complex.

Trade related to the complex made up 75.5 percent of all bilateral trade in 2010 and rose 53.4 percent to $1.44 billion last year.

In 2009, Kaesong commerce accounted for a little more than half of inter-Korean trade, or 56 percent.

Commerce outside Kaesong plummeted 54 percent from $256 million in 2009 to $118 million last year.

By Christine Kim [christine.kim@joongang.co.kr]