Seoul Prepares Sanctions Over Cheonan Sinking

      May 13, 2010 08:01

      The government has worked out a package of sanctions to take if North Korea is found to have been behind the sinking of the Navy corvette Cheonan on March 26. It will also be kind of counterblow to the North's seizure and freezing of South Korean property in the Mt. Kumgang resort area late last month.

      A senior government official on Wednesday said the sanctions formulated at the initiative of the Unification Ministry include banning sand imports from the North which were worth some US$70 million to the North in 2008. The imports were banned after the North launched a long-range rocket in April last year but were resumed in October.

      South Korean firms that have already paid can proceed but no fresh deals can be struck.

      Another target may be fisheries products. Of the total W1.06 trillion (US$1=W1,142) worth of worth of imports from the North last year, fisheries products were second with W173 billion or 16.3 percent after textiles (W477 billion or 44.8 percent).

      A ministry official said, "Fisheries products are sold by companies under the North Korean military or government that specialize in earning dollars, so a ban would deal a blow to the regime." But the regime does not cream off much from textile exports because South Korean firms depend chiefly on the joint Korean Kaesong Industrial Complex. Most of the money funneled to the North is meant as wages for North Korean workers.

      The downside is that hundreds of importers of North Korean fisheries products would suffer. The government is also worried about skyrocketing prices. North Korean merchant ships could lose their right to pass through the Jeju Strait, granted them under an inter-Korean maritime agreement concluded in 2004.

      A ban would mean higher fuel costs as the ships would have to make a detour through the high seas, a government official said.

      The ministry submitted a report on the sanctions package to Cheong Wa Dae right after the North announced last month it was seizing South Korean property in Mt. Kumgang, but the government at the last moment decided to put it off.

      "It seems that the government will make an announcement about a response to the sinking of the Cheonan and the North's seizure of property in Mt. Kumgang next week, when the findings of the Cheonan investigation are out," the official said.

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