2 Kaesong companies take insurance money

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2 Kaesong companies take insurance money


Workers of the Export-Import Bank of Korea yesterday review documents to prepare for paying compensation to companies that run their factories in the suspended Kaesong Industrial Complex. [NEWSIS]

The South Korean government started to pay compensation for two companies shut out of the suspended Kaesong Industrial Complex as the two Koreas prepare for a seventh round of talks to reopen the factory park next week.

According to South Korea’s Ministry of Unification, the Export-Import Bank of Korea paid a total of about 5.5 billion won ($4.9 million) to two South Korean companies for the loss of their investments in the eight-year-old industrial complex, which has been closed by North Korea since April.

Under the law, if the jointly-run factory complex is shut by a North Korean violation of the inter-Korean agreement for more than one month, the owners of the 123 companies in the park are entitled to apply for compensation under inter-Korean business and cooperation insurance.

They can be compensated for up to 90 percent of the losses on their investments with a 7 billion won maximum per company.

A total of 109 companies have already been approved by the government for compensation.

When the owners receive compensation, they surrender their ownership of their assets in the complex to the government.

But few South Korean companies requested compensation. Aside from two firms, the owners of the remaining 107 companies have not made the request as of yesterday.

“Some owners say they will await the outcome of the seventh round of low-level talks,” a Unification Ministry official told reporters. “It’s the decision of each owner.”

The official said paying the insurance doesn’t signify that the government will walk away from Kaesong soon.

“Paying compensation doesn’t have anything with the upcoming talks,” he said. “It’s just a legal procedure.”

Even if a company is compensated, it can return the money and get back its assets in Kaesong.

After the South Korean government took the first steps to compensate the business owners Wednesday, North Korea abruptly accepted a proposal for a seventh round of low-level talks on Aug. 14.

“We are closely watching the upcoming situation,” an official of Shinwon Group, an apparel maker that has a factory in the Kaesong park, told the Korea JoongAng Daily by phone.

“But it doesn’t mean that we will refuse compensation someday,” he said. “There’s still no guarantee of the resumption of operations despite the positive signal from North Korea.”

BY KIM HEE-JIN [heejin@joongang.co.kr]
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