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Kaesong firms to receive 280.9 bln won in insurance payment

All Headlines 15:24 August 07, 2013

SEOUL, Aug. 7 (Yonhap) -- The government said Wednesday that it has authorized 280.9 billion won (US$251.2 million) in insurance payments to South Korean companies that either have factories at the inter-Korean industrial complex in Kaesong or provided services to such firms four months after all operations there were halted.

The decision to pay the insurance money to the 109 companies comes four months after all operations at the Kaesong Industrial Complex came to a screeching halt in early April amid heightened tensions on the Korean Peninsula. Six rounds of talks in July failed to make headway over how to set safeguards to prevent another work stoppage.

Seoul's Ministry of Unification said the 18-person South and North Exchange and Cooperation Promotion Council that had been checking claims made by the companies authorized the payment from the inter-Korean insurance policy.

"Payment will start Thursday," said ministry spokesman Kim Hyung-suk, adding that if other companies that have not asked for compensation make claims, it will be processed accordingly.

Under the rules governing payments of the special insurance policy, each company can be compensated for up to 90 percent of their investment losses, with a maximum limit set at 7 billion won.

The state-run Export-Import Bank of Korea is expected to complete payment in the near future with the South Korean government acquiring subrogation rights of a creditor to the factories and other assets in the North Korean border town.

Speculations have emerged that once ownership of assets goes to the government, it will start taking "grave" steps that can eventually lead to a more permanent closure of the complex.


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