The South Korean government will designate local and regional government as entities that can provide aid to North Korea. This means that heads of regional and local governments will have more room to do their own inter-Korean projects from now on without involvement from the central government.
Minister of Unification Lee In-young announced that the ministry will submit an amendment to the regulations on humanitarian aid and cooperation projects with North Korea. The new regulation will designate every regional government as a beneficiary of the inter-Korean cooperation fund, the Seoul Economy newspaper reported on August 24. Previous regulations specified those eligible for the inter-Korean projects as “corporations” or “entities.” However, it expanded the latter to “an entity or local government.”
Currently, local governments need to get approval to become an entity that can conduct projects on North Korean humanitarian issues and require approval for shipping goods out of South Korea to North Korea. However, the new regulation will exempt them from applying for entity approval. They can now just receive approval for their shipping items. The bill will be proposed on September 13 and is expected to go into effect as early as late September after it’s been reviewed.
“Local governments strongly want to do business with North Korea, including humanitarian aid and cooperation in development,” said Lee. “We are amending the regulation to help their activities and maximize the effectiveness of their businesses.”
One of the problems with the new regulation is that regional governments’ inter-Korean projects could be at odds with the central government’s North Korea policies.
“The only reason that our country was able to come this far was because we had a sense of unity in our policies,” Kim Tae-woo, former head of the Korea Institute for National Unification, told the New Daily, an online news media outlet. “However, if this regulation goes into effect, the whole country will be broken to pieces.”
“In some places, their policies will change every time they elect a new head of their regional government, and areas that have a strong sense of regionalism will try to communicate with North Korea independently from the central government’s policies. We are likely to see such regions becoming different countries from ours.”
A lawmaker from the main opposition People Power Party (PPP), speaking anonymously, told the New Daily that this new regulation is to help entities such as the Foundation of Inter-Korea Cooperation, led by Im Jong-seok, former chief of staff to South Korean President Moon Jae-in.
According to the Monthly Chosun magazine’s latest report, the foundation led by Im has collected 3.1 billion won ($2.65 million) worth of royalties from South Korean companies using copyrighted North Korean materials from 2005 to 2020. The foundation collects the royalties on behalf of the North Korean state television service KCTV and other copyrighted publications. Lim served as the chairman of the foundation from 2005 to 2017 and resigned after he was appointed as the chief of staff to Moon. After he left the presidential Blue House he announced that he will return to the foundation in November 2019.
The foundation sent 790 million won ($676,659) collected from royalties to North Korea from 2005 and 2008. The foundation has been barred from transferring money to North Korea since 2008. In that year, Seoul imposed a new set of sanctions after a North Korean soldier shot and killed a 53-year-old tourist at the Mount Kumgang resort. From May 2009 to the end of last year, the foundation deposited about 2.3 billion won ($1.97 million) under the management of the courts.
The court reverts the fund to the national treasury if it is not claimed by the owner within 10 years. Thus, 22.66 million won ($19,357) deposited in 2009 and 207.9 million won ($179,072) deposited in 2019 should have been reverted to the national treasury already, but the foundation found a way to claim the funds before the deadline and deposited them again.
What made the foundation’s funds more suspicious was the Ministry of Unification’s recent decision to not disclose its transactions made with North Korea upon a request from the court. Recently, a South Korean court ordered the foundation to pay two octogenarian former prisoners-of-war (POWs) who escaped from North Korean captivity. This was the first court ruling acknowledging that a South Korean court has jurisdiction over North Korea and Kim Jong-un. The Seoul Central District Court ruled that North Korea was not a country according to the South Korean constitution, which states that the entire Korean peninsula is South Korean territory. The court ruled that sovereign immunity did not apply, and that North Korea’s actions were subject to South Korean jurisprudence.
As a result, the South Korean court seized 192 million won from the Foundation of Inter-Korea Cooperation. It ordered that the damages it awarded the two former POWs should be taken from that amount. “The foundation should not pay the amount of money to Chairman Kim Jong-un,” the court said.
The foundation argued that the royalties were destined for KCTV, not the North Korean government, and that the two Koreas should respect capital or investment in their respective region. This was why the court asked for more details related to the foundation’s transactions with North Korea and tried to find out who received the money from the foundation. However, the Ministry of Unification rejected the request, citing national interests and the foundation’s operational secrets.
The Monthly Chosun reported that all three major entities that Lim’s foundation signed contracts with are technically under the North Korean cabinet’s culture department. In this department, the appointment of personnel and censorship role is handled by the North Korean Worker’s Party’s propaganda department.
