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(2nd LD) S. Korea proposes holding talks with N. Korea over seized assets

All Headlines 17:10 July 08, 2011

(ATTN: RECASTS throughout with South Korea proposing talks with North Korea; CHANGES headline; TRIMS)

SEOUL, July 8 (Yonhap) -- South Korea has proposed holding talks with North Korea next week to try to resolve a looming dispute over South Korean assets that were seized at a scenic mountain resort used for stalled joint tours in the North, an official said Friday.

South Korea suggested the two sides meet either in the South on Wednesday or any date and location favored by the North to discuss the matter, Unification Ministry spokesman Chun Hae-sung said.

The offer, delivered to the North via a key South Korean tour operator at Mount Kumgang, came ahead of Wednesday's deadline set by the North for final discussions.

A delegation of South Korean government officials and businessmen failed to hold any substantial meetings with North Korea at the resort in late June due to procedural differences.

The North has since issued an ultimatum that it will take unspecified legal steps to dispose of the assets unless South Korean company officials visit the resort by July 13 with plans on how to handle their assets, which are estimated to be worth about 300 billion won (US$278 million).

It was not immediately clear whether the North would accept the offer or not.

South Korea has vowed to explore diplomatic and other possible means to safeguard the interests of its tour operators.

Seoul also indicated it could raise the issue at the General Assembly of the U.N. World Tourism Organization that will be held in the southeastern city of Gyeongju in October, in case Pyongyang takes unilateral action.

The North has stepped up pressure on South Korea over the joint tour project in recent years in what analysts say could be aimed at resuming the tour program that once served as a key cash cow for the North.

The two Koreas launched the joint program in 1998 as part of reconciliation efforts. But Seoul suspended it following the shooting death of a South Korean female tourist near the resort in 2008.

Last year, the North seized or froze several South Korean assets at the resort in anger over the stalled project. The North has recently announced a law designed to develop the resort as a special zone for international tours.

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