DPRK to seize Kumgang assets this week

UPDATE: According to Yonhap:

North Korea has told four employees at a South Korean-run mountain resort to leave the communist nation within 24 hours as part of measures to freeze Seoul-held assets there, sources here said Tuesday.

The North has also sealed the key holes of entrances to five facilities and has pasted keep-out stickers, they said. The facilities were built and run by the South Korean government and its state tourism agency.

The workers, ethnic Koreans from China, had been overseeing the maintenance of a family reunion center at Mount Kumgang. The other facilities subject to Tuesday’s asset freeze included a duty free shop run by Seoul’s Korea Tourism Organization.

The North’s measures were seen as an attempt to increase pressure on Seoul to resume a joint tourism program to the mountain resort that had been an important source of foreign currency for the impoverished nation.

Officials in Seoul earlier said the freezing of assets will have little actual impact as the facilities have hardly been in use since the cross-border tours to Mount Kumgang were suspended in 2008.

Still, the measure symbolizes Pyongyang’s anger over Seoul’s refusal to resume the lucrative project that had earned the regime millions of dollars a year. It also suggests that stronger steps, such as asset confiscations, could come if the South keeps refusing.

On Tuesday morning, North Korean officials began carrying out the measure, a source said without giving any specifics.

“We will respond after we see what the freezing measure will involve,” an official in Seoul said.

The tours, which began in 1998, had been a prominent symbol of reconciliation between the rival states that are still technically at war after the 1950-53 Korean War ended in a ceasefire, not a peace treaty. Nearly two million South Koreans had visited the scenic mountain.

South Korea suspended the program in 2008 after one of its citizens was shot dead by a North Korean guard after entering a restricted area near the resort. Seoul has demanded a state-to-state guarantee of tourist safety as well as a joint on-site probe into the death before the tours can resume.

North Korea says it did everything to assure tourist safety in a deal that leader Kim Jong-il struck with the head of the tour’s main South Korean organizer, Hyundai Asan, last year.

South Korea has protested the North’s decision to freeze the five facilities which include a family reunion center, a fire station and a duty free shop.

Despite threats from the North, the government of South Korean President Lee Myung-bak has shown no signs of backing down. It also rejected the North’s demand that Seoul officials come to the resort to attend the asset freeze, and warned it would hold the North responsible if it causes any damage to resort facilities.

Since taking office in early 2008, Lee halted unconditional aid to the North, linking its resumption to progress North Korea makes in ending its nuclear weapons programs.

Amid the lack of aid from the South, North Korea’s economic troubles have deepened in the wake of fresh U.N. sanctions imposed after Pyongyang’s nuclear test last year, and the regime’s failed currency reform that worsened inflation and food shortages.

Here are some press releases from the Ministry of Unification: Statement 1, Statement 2.

ORIGINAL POST: According to the Associated Press:

North Korea informed South Korea that it will begin quitting a joint tourism project in the communist country this week, officials said Sunday, in another setback to relations between the countries.

North Korea said Thursday that it would freeze some South Korean assets at scenic Diamond Mountain, expel South Koreans working at the site and restart the stalled project with a new partner.

A day later, the North told the South that it will carry out the plan Tuesday, starting with the freezing of the South Korean government-owned assets that include a reunion center for families separated by the Korean War, according to Seoul’s Unification Ministry.

It was not clear when the North would expel South Korean personnel, according to Hyundai Asan, the resort’s South Korean tour operator that relayed the North’s plan to the South Korean government.

The North said it would freeze assets at the site while South Korean officials were in attendance, but the South has no intention of sending officials to comply with the North’s request, ministry spokeswoman Lee Jong-joo said.

South Korea halted tours to the mountain resort on North Korea’s east coast in July 2008 after a South Korean tourist was fatally shot after allegedly entering a restricted military area next to the resort.

The North had recently expressed its willingness to restart the tours, a legitimate source of hard currency for the impoverished regime. But South Korea said the North must first accept a joint investigation into the shooting death.

North Korea’s decision to quit the tour project “is the inevitable consequence entailed by the moves of the South Korean authorities to escalate the confrontation with fellow countrymen,” the North’s government-run Minju Joson newspaper said in a commentary carried by the official Korean Central News Agency on Sunday.

Relations between the two Koreas have worsened since a conservative Seoul government took office in early 2008 with a pledge to get tough with the North.

But North Korea has tried to reach out to Washington and Seoul since last summer in an about-face that analysts and officials say shows the North feels the pain of U.N. sanctions adopted to punish it for its nuclear test in May.

The DPRK wants South Korean officials present for the occasion, but the South has refused.  According to the the AFP:

Seoul on Sunday rejected Pyongyang’s demand that South Korean officials come to a North Korean resort where the communist regime is about to freeze South Korean assets, worsening bilateral ties.

North Korea wants South Korean officials present on Tuesday when it freezes the assets, Seoul’s unification ministry spokesman Chun Hae-Sung said.

However Seoul will not comply with the summons, he said.

The North last week threatened to freeze assets at the Mount Kumgang resort after pressing Seoul in vain to lift its ban on tours to North Korea, which once earned the impoverished state tens of millions of dollars a year.

The North also declared its cross-border tour business deal with South Korean firm Hyundai Asan void, threatening to find a new partner to replace it and to expel some South Korean personnel.

Seoul suspended the cross-border tours in July 2008 after North Korean soldiers shot dead a South Korean housewife who strayed into a military zone.

South Korea demands firm agreements on the safety of visitors, a joint investigation into the shooting and the North’s apology for the killing.

The North says it has already given safety guarantees.

The latest tit-for-tat reflects the deterioration in relations since the South’s conservative government took office in 2008 and took a tougher line with Pyongyang, linking economic cooperation with the North to progress on its nuclear disarmament.

The North’s official Minju Joson newspaper said Sunday the collapsing tour deal “is the inevitable consequence entailed by the moves of the South Korean authorities to escalate the confrontation with fellow countrymen.”

It accused Seoul of overturning previous agreements on resuming the tours, which began in 1998.

Nearly two million South Koreans had travelled to the North in the past decade, earning it some 487 million dollars.

North Korea is also suffering economically from tougher sanctions imposed by the UN Security Council since Pyongyang’s second nuclear test in 2009.

It says it will freeze five Seoul-owned assets — a family reunion centre, a fire station, a culture centre, a spa and a duty free shop — in the Mount Kumgang resort, but did not specify how, Seoul officials said Sunday.

The South has urged the North to reverse its decision, saying the communist state is breaching business contracts and international norms.

Pyongyang also threatens to re-examine an industrial park with the South at Kaesong just north of the border.

Some 42,000 North Koreans work at 110 South Korean-funded plants at Kaesong, which like Kumgang is a valuable source of scarce hard currency for the North.

Here is a link to previous Kumgang stories.

Read the full story here:
NKorea to start quitting joint tour this week
Associated Press
Kim Hyung-Jin
4/11/2010

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