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S. Korea tracks money flow over N. Korea's Kaesong revenue use

2016/02/15 14:46

SEOUL, Feb. 15 (Yonhap) -- South Korea said Monday it has extensively collected information to prove that North Korea has used wages paid to its workers at a joint industrial park for its nuclear and missile program.

Unification Minister Hong Yong-pyo said Sunday that 70 percent of the money that has flowed into the Kaesong Industrial Complex in the North has been funneled into the ruling Workers' Party of Korea to bankroll its weapons development.

"There have been consistent concerns that North Korea may have misappropriated wages from the Kaesong complex," Jeong Joon-hee, spokesman at the Unification Ministry, told a regular press briefing. "We've tracked and analyzed money flows in an extensive manner."

   Last week, South Korea shut down the complex in response to the North's latest nuke test and long-range rocket launch, bringing an end to the last remaining symbol of inter-Korean reconciliation.

In retaliation for Seoul's move, North Korea expelled all South Korean nationals on Thursday from the complex and froze factory assets by a total of 124 South Korean firms. They annually provide about US$100 million in total to some 54,000 North Korean workers for wages.

Hong's remarks came under intense scrutiny amid concerns that North Korea might have violated United Nations resolutions banning the transfer of bulk cash.

In response to the North's nuclear test in 2013, the U.N. slapped the sanctions against the North on worries that a massive money transfer could be misused to develop its nuclear and missile program.

Jeong rejected criticism that Seoul might have condoned the North's misuse of the money.

"There were concerns about the North's misappropriation," he said. "But the international community had recognized the meaning and effects of the factory zone."

   The complex opened in 2004 as a result of the first inter-Korean summit in 2000. It had served as a major revenue source for the cash-strapped North, while South Korea benefited from cheap but skilled North Korean labor.