SEOUL, Nov. 27 (Yonhap) -- North Korea recently created a rule to confiscate the assets of South Korean firms operating in the Kaesong Industrial Complex that fail to comply with controversial tax regulations unilaterally adopted in August, a Seoul official said Tuesday.

   "The North has newly added a clause ... allowing forcible confiscation from companies that do not pay their taxes within the deadlines," the official said on condition of anonymity.

   The rule also allows the North to claim collateral for unpaid taxes, with the country free to sell the collateral, according to the official.

   The South's government and South Korean firms in the Kaesong complex protested the moves, saying the tax rules were unilaterally drawn up by the North without consent from Seoul.

   Seoul is in talks with Pyongyang to persuade the country to withdraw the recent tax rules, the official said.

   South-North tensions have risen over the joint industrial zone in the North Korean border city of Kaesong since Pyongyang unilaterally adopted and implemented its revised tax rules last August.

   The revision allows the North to levy abnormally heavy taxes on accounting irregularities by South Korean firms and wield other punitive measures.

   Following the revisions, the North unilaterally levied a total of US$160,000 in taxes on nine of the 123 South Korean firms in the industrial zone designed to strengthen inter-Korean economic cooperation by allowing deep-pocketed South Korean companies to hire cheap North Korean labor.

   pbr@yna.co.kr
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