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Seoul to partially lift restrictions on biz complex in N. Korea

Seoul to partially lift restrictions on biz complex in N. Korea

Posted February. 16, 2012 08:18,   


The South Korean government will allow companies operating in the Kaesong industrial complex in North Korea to bring new facilities or build plants there. Against this background, regulations banning new investment in the complex under a sanction against North Korea, which made May 24 last year, will be massively eased.

Park Soo-jin, vice spokeswoman of the Unification Ministry in Seoul, said Wednesday, “We will ease sanctions on North Korea imposed May 24 last year to support the operations of plants operating (in the Kaesong complex), including allowing the entry of necessary facilities and construction of warehouses.” “We will also actively examine working-level talks with Pyongyang to resolve the issue of supply of North Korean workers. We are willing to negotiate with the North on building dormitories and tackling passage, customs and telecommunications matters and personal safety.” The ministry is also mulling putting artificial grass on a soccer field within the complex to improve living conditions of South Korean staff.

The latest decision is a follow-up measure after members of the special parliamentary committee for inter-Korean relations development and the National Assembly`s Foreign Affairs, Trade and Unification Committee visited the Kaesong complex Friday and urged the resolution of difficulties facing companies operating there. Having offered Tuesday working-level talks to Pyongyang for family reunions, Seoul apparently hopes to expand amicable relations through this deregulation.

The Unification Ministry said last year`s sanctions will remain in force since expansion of large-scale investments will still be banned, including new corporate advances into the complex and plant construction. The latest measure, however, is still a big step forward because until now, Seoul had approved just facility entry into the complex for repair purposes, while going forward, additional facilities could be allowed for production activities. Plant construction was initially allowed for seven companies, which had been suspended due to last year’s sanctions.

Certain projects are already in place, including the construction of fire stations and emergency medical facilities, as well as repair of roads for commuting by North Korean workers. The South Korean ban on visiting North Korea excluding the Kaesong complex and Mount Kumgang area, which was effected last year, was also eased following approval of trips to North Korea for social and cultural exchanges, including the recovery of Kaesong Manwol pavilion.

All of these deregulatory moves have fueled criticism in Seoul that the latter is trying to gradually ease its sanctions on Pyongyang despite the latter`s lack of change in attitude following the North`s sinking of the South Korean naval vessel Cheonan and shelling of Yeonpyeong Island in 2010.

Cho Bong-hyeon, a research fellow at the IBK Economic Research Institute, said, “The latest measure has lifted almost all new investment sanctions on companies operating in the Kaesong complex, and will be completely lifted eventually,” adding, “The (South Korean) government cannot lift all of the sanctions, but the latest measures will still provide incentives to North Korea in coming to the table.”

Launched in late 2004, the Kaesong complex has steadily grown despite the ups and downs in inter-Korean relations. In a recent lecture at the Civil Headquarters for Activating South-North Economic Cooperation in Korea, Seo Ho, director of the Unification Ministry’s inter-Korean exchanges and cooperation bureau, said, “North Korean workers at the Kaesong complex used to avoid their South Korean counterparts, but they now talk to them and even share snacks."