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N. Korea freezes S. Korean assets at mountain resort

All Headlines 12:00 April 13, 2010

SEOUL, April 13 (Yonhap) -- North Korea carried out a threat to freeze South Korean facilities at a mountain resort Tuesday, increasing pressure on Seoul to resume a joint tourism program that had been an important source of foreign money for the impoverished nation.

It is unclear what exactly the North meant by freezing. If it refers to sealing off or shutting the facilities, the actual impact is likely to be minimal as the facilities have hardly been in use since the cross-border tours to Mount Kumgang were suspended in 2008.

Still, the measure symbolizes Pyongyang's anger over Seoul's refusal to resume the lucrative project that had earned the regime millions of dollars a year. It also suggest that stronger steps, such as asset confiscation, could come if the South keeps refusing.

On Tuesday morning, North Korean officials began carrying out the measure, a source said without giving any specifics.

"We will respond after watching what the freezing measure would be," an official in Seoul said.

The tours, which began in 1998, had been a prominent symbol of reconciliation between the rival states that are still technically at war after the 1950-53 Korean War ended in a ceasefire, not a peace treaty. Nearly two million South Koreans had visited the scenic mountain.

South Korea suspended the program in 2008 after one of its citizens was shot dead by a North Korean guard after entering a restricted area near the resort. Seoul has demanded a state-to-state guarantee of tourist safety as well as a joint on-site probe into the death before the tours can resume.

North Korea says it did everything to assure tourist safety in a deal that leader Kim Jong-il struck with the head of the tour's main South Korean organizer, Hyundai Asan, last year.

South Korea has protested the North's decision to freeze the five facilities, which were built and run either by the government in Seoul or a state tourism agency, such as a family reunion center, a fire station and a duty free shop.

Despite threats from the North, the government of South Korean President Lee Myung-bak has shown no signs of backing down. It also rejected the North's demand that Seoul officials come to the resort to attend the asset freeze, and warned it would hold the North responsible if it causes any damage to resort facilities.

Since taking office in early 2008, Lee halted unconditional aid to the North, linking its resumption to progress North Korea makes in ending its nuclear weapons programs.

Amid the lack of aid from the South, North Korea's economic troubles have deepened in the wake of fresh U.N. sanctions imposed after Pyongyang's nuclear test last year, and the regime's failed currency reform that worsened inflation and food shortages.

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