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S. Korea to bolster legal support for inter-Korean businesses

July 17, 2018 - 16:35 By Jung Min-kyung

South Korea plans to revise a law to bolster ties with North Korea and protect local businesses involved in inter-Korean economic projects, the Ministry of Unification said Tuesday.

The revision would require the government’s bans or restrictions on economic projects with North Korea to be subject to a Cabinet review. It would also help normalize the operations of companies if they suffer damages from the government’s unilateral decisions. 

Kaesong Industrial Complex (Yonhap)

“Procedures for a Cabinet review were absent when the government decided to halt cross-border tours to Kumgangsan and suspend the Kaesong industrial complex in the past,” a ministry official told a group of reporters under the customary condition of anonymity.

“The aim is to take more careful measures and follow the necessary procedures before making such decisions.”

The amendment proposal will be open for public review from Monday until late August before going into effect, the ministry said.

Calls for the South Korean government to ensure the protection of companies forming or willing to form business ties with North Korea have been growing in recent years.

Since the Kim Dae-jung administration (1998-2003) opened up an era of economic ties between the two Koreas, there have been voices within and outside the government pointing out the lack of protection and legal grounds for local businesses involved.

The Seoul government’s decision in 2016 to abruptly shutter the joint industrial zone located in the North’s border town of Kaesong and evacuate South Korean businessmen over Pyongyang’s military provocations led to losses by businesses, as they were forced to leave behind a significant portion of their private properties, including factories. On top of it, they have yet to be authorized to revisit the complex, despite persistent rumors that the North has been operating the factories without their consent.

The cross-border tour program to Kumgangsan on the North’s east coast was also suspended in July 2008 after a female South Korean tourist was shot dead by a North Korean guard near the resort. Job losses had resulted from the incident as well.

With the recent inter-Korean detente, talks of reviving and expanding economic cooperation are being raised between the two Koreas, but it is likely that large-scale projects, including the Kaesong industrial park, will not be discussed in-depth until international sanctions against Pyongyang are lifted.

However, projects that can be implemented without sanctions violations, such as reforestation of North Korean woodlands and reconnecting the inter-Korean railways, are likely to see progress. The two Koreas agreed to jointly inspect and research modernizing the North Korean part of the Gyeongui Line along the west coast next week.

“North Korea also understands the situation (surrounding the sanctions), so we will solve the issues with mutual respect and better understanding of each other,” the official said.

The official added that the unilateral sanctions that South Korea announced in 2010 in retaliation against the North’s sinking of the South Korean warship Cheonan will remain in place but hinted at “flexibility.”

The ministry also vowed to contribute to the resumption of inter-Korean civilian exchanges -- which have been largely halted for a decade over heightened border tensions -- and support various nonpolitical exchanges.

A total of 507 approved cases of contact with North Korean people and eight endorsed trips by South Koreans to the North have been made since the Moon Jae-in government took office in 2017, according to the ministry.

(mkjung@heraldcorp.com)