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Seoul cautious over U.S.-N.K. Geumgang deal

 S. Korean operator Hyundai Asan heads to resort hoping to resume cross-border tourism

South Korea will take any measure necessary to protect the property rights of its people, but does not feel the need to react immediately to North Korea’s purported deal with a U.S. firm which could hurt Seoul’s exclusive rights to operate tours to a mountain resort in the North, officials said Thursday.

Pyongyang has signed a preliminary deal with a New York-based firm for tours to its Mount Geumgang resort, reports said Thursday, quoting the Korean-American who heads the U.S. company.

According to the businessman Park Il-woo, under the deal, his company Korea Pyongyang Trading U.S.A. would be given the rights on marketing, investor relations and tourist recruitment for the tour of the mountain, once a symbol of reconciliation between the two Koreas. The U.S. company currently imports a North Korean liquor branded Pyongyang Soju.
Hyundai Asan President and CEO Chang Kyung-chak walks through the South Korean immigration office for inter-Korean border crossing in Gosung, Gangwon Province, Thursday, to enter the Mount Geumgang resort. (Yonhap News)
Hyundai Asan President and CEO Chang Kyung-chak walks through the South Korean immigration office for inter-Korean border crossing in Gosung, Gangwon Province, Thursday, to enter the Mount Geumgang resort. (Yonhap News)

Once the memorandum of understanding is developed into a full-scale agreement, the mountain area will be developed into a multi-purpose resort, he said, adding Pyongyang will also select Japanese and Chinese business partners soon.

“We will take all necessary legal and diplomatic measures to protect Mount Geumgang assets of our businessmen, but remain unsure whether the government should react at this point of time,” a Seoul official said on the condition of anonymity. “We are trying to determine whether the reports are true.”

It remains to be seen whether people from countries other than South Korea will find the Mount Geumgang tour appealing, and whether the U.S. and other states will allow the tour despite their diplomatic ties with Seoul, another unnamed official said.

“The U.S., in particular, has slapped economic sanctions against the North. This company will first have to secure approval from the U.S. government to start actual business,” the official said.

The two Koreas had launched the joint tour project at the North’s Mount Geumgang in 1998 as a symbol of reconciliation.

The tour, which had been one of impoverished Pyongyang’s main sources of income, came to a halt on July 11, 2008 after a South Korean female tourist was shot dead by a North Korean soldier when she purportedly strayed into an off-limits military zone.

Some 300 billion won ($280 million) worth of facilities invested in by dozens of South Korean companies ― restaurants, a fire station, a cultural center, a hot spring, hotels and a golf range ― have been out of use for three years.

Seizing the assets in April last year, Pyongyang has been threatening to take legal steps to dispose of them and unilaterally terminated the South Korean operator’s exclusive tourism rights.

Dozens of officials of the tour operator Hyundai Asan went to Mount Geumgang on Thursday to hold a memorial service for their former chairman who jumped to his death in Seoul in 2003. Officials have been holding such a service every year at a monument set up at the resort to honor the deceased chairman Chung Mong-hun’s efforts for inter-Korean relations.

Hyun Jeong-eun, currently chairman of the firm and the wife of the late Chung, said in a separate memorial ceremony in Seoul before entering Mount Geumgang that she remains committed to resuming the stalled cross-border tours.

Hyundai Asan has suffered some 390 billion won in losses and had to lay off some 700 officials during the three-year suspension of the tour, according to data recently released by the company.

Pressed for outside aid and foreign currency, North Korea is most likely to be highlighting its willingness to start joint tours with other countries in a bid to prod Seoul into resuming the tour unconditionally, analysts here say.

While Pyongyang claims to have done enough on its side to address the 2008 shooting incident, Seoul demands that it investigate the case properly and take reliable prevention measures.

The tug-of-war over the Mount Geumgang tour comes as the two Koreas have long suspended dialogue following the communist North’s two deadly attacks against a Seoul warship and a border island last year. Pyongyang continues to deny responsibility for the attacks that killed up to 50 South Koreans.

By Shin Hae-in (
Korea Herald daum