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S. Korea OKs visit to N. Korea by tour operators under asset freeze threat

All Headlines 14:44 March 24, 2010

By Sam Kim

SEOUL, March 24 (Yonhap) -- South Korea issued travel permits Wednesday to businessmen planning to visit North Korea this week after Pyongyang threatened to seize their assets at a mountain resort in anger over Seoul's reluctance to resume the long-suspended cross-border tours.

Last week, North Korea told companies with business interests at the Mount Kumgang resort to gather for an asset inspection, threatening to confiscate their properties if they defy the order. Pyongyang also warned it would seek a new partner to run the tourism project if South Korea refuses to resume the tours.

The tours were suspended immediately after a South Korean tourist was shot to death near the resort in 2008 after entering a restricted area guarded by North Korean soldiers.

South Korea has said that it would let individual firms decide whether to comply with the order, but stressed it won't buckle under Pyongyang's pressure to resume the tours unless the North first agrees to a joint on-site investigation into the 2008 death and fully guarantees tourist safety.

On Wednesday, Unification Ministry spokeswoman Lee Jong-joo said 39 companies with interests in the tour project had planned to send officials to the resort for the purported asset inspection that is set for Thursday, though only nine firms with real estate holdings at the resort were allowed to send delegates to the North.

North Korea has increased pressure on Seoul to resume the tours, a key cash cow for the impoverished nation as its economic troubles worsened in the wake of tough U.N. sanctions imposed for conducting a nuclear test last year and a bungled currency reform.

Nearly 2 million South Koreans traveled to the mountain resort on the North's east coast between 1998 and 2008.

"North Korea will likely argue it is also losing money as its own resort facilities dawdle," Koh Yu-hwan, a North Korea scholar at Seoul's Dongguk University, said.

Koh added the North may be clearing the way for Chinese tour operators to earn business rights over the mountain.

The state-run Korea Tourism Organization (KTO) was to send three officials to the North later Wednesday, while 16 officials from the eight other firms, including Hyundai Asan Corp. and Emerson Pacific Group, plan to visit the resort on Thursday.

The KTO officials intend to conduct their own inspection of facilities before the survey takes place, ministry spokeswoman Lee said, adding the government has no plans to meet with the officials before the trip.

"We have no plans to ask the visitors to relay our position to the North," she said. No South Korean government officials will accompany the business group.

Dozens of South Korean firms possess 360 billion won (US$31 million) worth of land and buildings in the tourist zone, including Hyundai Asan's two hotels, Emerson Pacific Group's golf course, and other facilities, according to government data.

The Seoul government also poured more than 60 billion won into the construction of a family reunion center there, but Lee said the center is technically ruled out as an asset subject to confiscation.

The North says that safety measures were promised when its leader Kim Jong-il met with the chairwoman of Hyundai Asan last year and that its own probe shed enough light on the shooting.

A similar joint tour project to the ancient city of Kaesong near the west coast has also been halted since 2008. Both tour programs were considered a rare source of hard currency for the North.

samkim@yna.co.kr
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