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NORTH KOREA NEWSLETTER NO. 112 (June 24, 2010)

S. Korea Assessing Companies Hurt by Trade Ban on N. Korea: Official

SEOUL (Yonhap) -- South Korea is conducting an investigation into financial and other difficulties being experienced by hundreds of its companies operating in North Korea because of a cross-border trade ban, an official said on June 18.

   The ban has been in effect since late last month when South Korea accused North Korea of causing the March sinking of its warship near their Yellow Sea border. Forty six sailors died in the sinking.

   The trade ban directly affected hundreds of South Korean companies doing business with North Korea. Those companies are seeking rescue funds from their government.

   Unification Ministry spokeswoman Lee Jong-joo said her government has begun to assess the extent of emergency funds that the companies may need after they have been barred from trading with North Korea, where labor costs are much lower.

   "It does not mean that the government will provide the funds. Decisions on what to do will be made after the fact-finding is completed by June 28," she told reporters.

   She added the ministry is also checking the amount of raw materials South Korean companies have procured but are banned from sending to North Korea for reprocessing.

   The companies have been urging the government to allow the materials to be sent to North Korea as planned because they were obtained before the ban was implemented, she said.

   South Korea has said it would allow exceptions after examining the case of each company involved in inter-Korean trade. Lee said her government will examine about 800 companies, but that more than 110 South Korean companies at a joint factory park in the North Korean border town of Kaesong will not be subject to the ongoing probe.

   Inter-Korean trade flourished following a summit between the divided countries in 2000, but hit a snag after the sinking of the Cheonan corvette, which Seoul says a North Korean submarine torpedoed.


N. Korean Workers Increase at Kaesong Complex Despite Tension: Report

SEOUL (Yonhap) -- Despite tension over the sinking of a South Korean warship, the number of North Korean workers at the two countries' joint industrial complex has reached the highest point since it opened in 2004, a government report said on June 23.

   The number stood at 44,000 as of June, 2,000 more than in January this year, the Unification Ministry said in a parliamentary report, adding that 121 South Korean firms are operating in the socialist country's border town of Kaesong near the west coast.

   The report suggests the factory park, considered the last remaining major symbol of reconciliation, is growing despite a series of South Korean measures aimed at punishing the North for the sinking of its Cheonan corvette in March.

   North Korea denies any role in the sinking that left 46 sailors dead. South Korea has banned cross-border trade since late last month when a multinational investigation pinpointed North Korea as the culprit. Seoul has also scaled down the number of South Koreans permitted to stay each day in Kaesong.

   "Unless North Korea first provokes harm (to a South Korean worker), the Kaesong industrial complex will be maintained," Unification Minister Hyun In-taek told a parliamentary hearing on Wednesday.

   The complex opened in 2004 after the leaders of the two sides agreed on the venture in a summit four years earlier. It produces labor-intensive goods such as kitchenware and clothing, and each North Korean worker receives just under US$58 a month.

   Last week, South Korean firms operating in Kaesong said they were seeking rescue funds from the government because their business conditions had deteriorated amid cross-border tensions.


DNA Test Supports N.K. Family's Claim to Family Inheritance in South

SEOUL (Yonhap) -- A DNA test supports claims by North Koreans that they are the children of a deceased father who left behind a sizable inheritance, court officials said on June 23, a finding that may give them the legal right to the fortune in the South.

   Four North Koreans filed a suit in February last year through a foreign relief group, insisting on their rights to the real estate valued at 10 billion won (US$6.6 million) left behind by their late father who came to the South during the 1950-53 Korean War. They said the father, identified only by his last name Yoon, had come to the South with one of their siblings, leaving his first wife and four children.

   Yoon remarried in the South and had four more children.

   The Seoul Family Court had requested Yonsei Severance Hospital to conduct a DNA test, and the result identified the four North Koreans as related with Yoon's children in the South by blood, court officials said.

   The court will look into the test results and decide whether to accept the North Koreans' claim to the property, officials said.