South Korea’s Unification Ministry said Thursday it will launch a research project that aims to overhaul and upgrade the operational guidelines of the now-suspended Kaesong Industrial Complex.

“It is necessary to draw an expansive management plan of the Kaesong industrial complex by improving its operational guidelines, to prepare for a progress in the inter-Korean relationship,” a Unification Ministry official said Thursday.
 

The joint industrial complex in the border city of Kaesong was shuttered in February 2016, under suspicions that the revenue generated from the business was funding Pyongyang’s nuclear and missile program development.

The current guidelines refer to the Kaesong Industrial Complex law which was unilaterally drafted by North Korea in 2001, under Seoul’s consent. It is considered as one of Pyongyang’s preconditions for its cooperation in the inter-Korean economic project.

However, the framework has drawn public criticism here for what was perceived as an unfair treatment of South Korean companies. In 2012, the reclusive regime imposed stricter penalties against South Korean firms on delayed filing of retrospective taxes and income reports. The guidelines allowed the North Korean authority to late-fine the operators up to 200 times of the unpaid bills.

South Korea has been calling for a new jointly-written law to thwart such extreme measures, while being largely tolerant of the enacted framework.

The Unification Ministry official pointed out that such conflicts could stand in the way of a smooth procedure and Seoul should come up with a more “reasonable” framework before the possible reopening of the complex.

“We are trying to come up with measures to improve the current guidelines since some of the existing contexts are difficult for us to follow,” said the official.

Unification Minister Cho Myoung-gyon said at a forum last week that the revival of the complex, which once housed 124 South Korean firms and 54,000 North Korean laborers, will be a top priority on government agenda once Pyongyang halts provocations and international sanctions are eased.

He added the resumption of the program may gradually start from the on-site management of related facilities and assets that remain in the zone. 

The Moon administration’s decision follows United Nations Security Council’s adoption of economically crippling sanctions which aim to cut off funds to the North’s nuclear and missile program. In line with the sanctions, several US officials and lawmakers have been voicing disagreement over the complex’s revival.

Grace Choi, a spokeswoman for the State Department‘s Bureau of East Asian and Pacific Affairs, told Voice of America earlier this month that the US supports Seoul’s decision to shut down the complex in 2016 “in the face of North Korea’s destabilizing and provocative actions.“

By Jung Min-kyung (mkjung@heraldcorp.com)