The abrupt entry ban came after Pyongyang threatened to shut down the Kaesong Industrial Complex and launch a pre-emptive nuclear war on Seoul and Washington over South Korea-U.S. joint military drills and U.N. sanctions for its latest nuclear test.
Seoul's Ministry of Unification said that it received an official notification from the North earlier in the day stating the restrictions.
"South Korea's government deeply regrets the entry ban and urges it to be lifted immediately," ministry spokesman Kim Hyung-suk said in a press conference.
The official pointed out that the latest action by the communist country will impede normal operations at the site. He stressed Seoul will make every effort to ensure the safety of South Korean nationals at the industrial site.
Trucks turn back at the Customs, Immigration and Quarantine Office in Paju after North Korea announced it will not permit people and cargo into the Kaesong Industrial Complex on April 3, 2012. (Yonhap)
"The government will talk with companies that have factories at Kaesong to determine what course of action should be taken," he said.
Kim pointed out that because the North has not barred South Korean workers from leaving Kaesong, people expected to cross the demilitarized zone (DMZ) into South Korea should be able to do so. He did not elaborate on the reason given by the North for halting inflow of workers and cargo, but said it reflected the North's view on the current situation.
There were 861 South Koreans at the Kaesong complex before the North announced the ban, with three having returned across the demarcation line around noon, six at 2 p.m. and eight at 3 p.m.
Originally, 484 South Koreans and 371 vehicles were scheduled to go to Kaesong during the day. Because of the ban, only 33 have returned, a much smaller number than previously planned, which will leave 828 people at the complex. The drop in returnees from 466 is mainly due to less people going North during the day, and to a lesser extent the 123 labor-intensive firms in the border town asking their workers to stay on so they can run their factories despite the entry ban.
In an official statement released by the unification ministry, Seoul pointed out that in order for the North to attract investments from abroad, there must be trust not only between the two Koreas, but with the rest of the world. Such trust-building requires the North to be predictable in its actions, it said.
"If the North, despite such clear fallouts, persists in its current path, it must be aware of the negative repercussion its actions will have on inter-Korean relations and be willing to face the criticism and isolation from the international community," the statement said, calling on the North to lift its latest restrictions immediately.
South Korea's response comes as officials at the Customs, Immigration and Quarantine Office (CIQ) in Paju, about 50 kilometers northwest of Seoul said the North had not issued permits authorizing the daily trip of South Korean managers and cargo over the DMZ. Officials at CIQ said many workers who planned to cross over turned back after waiting 3-4 hours and confirmed the North's decision to ban entry into Kaesong.
Meanwhile, the Kaesong Industrial District Management Committee (KIDMAC) in the border town informed Seoul that South Korean plants at the complex were operating normally. KIDMAC maintains round-the-clock contact with the ministry.
South Korean workers who returned over the demarcation line confirmed work at the factories was unimpeded by the ban.
"There seemed to be nothing different at Kaesong, although customs officers at the border wore uniforms and more soldiers were seen," a worker for a textile company said.
The worker, identified only by his surname of Roh, said that while the region could hold out for a short period, problems may occur is there is a shortage of food and industrial materials.
The ministry in charge of dialogue with the North and formulating long-term unification policies added that the North had halted movement to and from Kaesong on three occasions in March 2009 when Seoul and Washington were conducting the Key Resolve command post and field exercise.
"Although the action taken is serious, it is not without precedence," an official, who declined to be identified, said. In 2009, the North blocked and opened movement over the DMZ although they allowed moved after the end of the military exercise. An year earlier the country implemented the so-called Dec. 1 measure that reduced the number of South Korea who could remain at Kaesong from 1,070-1,500 to around 800, and moved to exercise more control over the movement of people.
President Park Geun-hye was briefed on the situation, a senior aide said.
"It was immediately reported" to the president by National Security Office chief Kim Jang-soo, the official said without elaborating, including how Park reacted. "We are closely taking care of the situation around the national security office."
The defense ministry is preparing to take military action in the event that the safety of South Koreans at the factory park comes under threat, Defense Minister Kim Kwan-jin was quoted as saying by Rep. Won Yoo-chul of the ruling Saenuri Party.
The minister made the remark during a meeting of the party's special committee on North Korea's nuclear issue, the lawmaker, who chairs the committee, said at a press briefing.
The military is also prepared to destroy 70 percent of the North's front-line units within five days in the event that the communist nation provokes the South, the minister was also quoted as saying by the lawmaker.
The complex, located just north of the DMZ, is significant because it is the only economic link between the two Koreas after Seoul suspended most exchanges with the communist country after the sinking of one of its naval ships in the Yellow Sea in March 2010.
The two sides signed an agreement calling for the creation of the complex in August 2000 with the groundbreaking ceremony taking place in June 2003 and the first goods being produced at the market in late 2004. The South has invested 900 billion won (US$802 million) into Kaesong so far with combined output reaching $2.01 billion.
North Korean observers in Seoul, meanwhile, said holding up the movement of workers could be a move by Pyongyang to show it can carry out its threats.
"By fueling tensions, the North may be trying to compel South Korea and the United States to accept its conditions for talks that aim to gain formal recognition for its nuclear weapons," a Pyongyang expert said. Such demands have all been turned down in the past.