Seoul to compensate firms affected by shuttered inter-Korean complex

New administration may cover all losses, changing in its previous stance to let insurance cover losses

Seoul to compensate firms affected by shuttered inter-Korean complex

Insurance News

By Gabriel Olano

The government of South Korea is looking to provide additional compensation to firms affected by the closure of the inter-Korean industrial complex located in the North Korean border town of Kaesong.

An anonymous member of the unification ministry said the ministry presented the idea at a Friday meeting of the State Affairs Planning Advisory Committee, which is managing the transition process of President Moon Jae-in's administration.

In February 2016, Seoul decided to close the industrial complex in response to Pyongyang’s nuclear and missile tests. The shutdown caused the firms operating in the complex damages estimated at KRW700.5 billion (US$624.7 million).  The South Korean government provided KRW 507.9 billion won (US$453.8 million) to the affected firms

Yonhap News Agency reports that the unification ministry is planning to cover the companies' liquid asset losses, such as their manufactured products, according to the official. So far, 63% of liquid asset losses have been reimbursed.

“Liquid asset damage impacts subcontractors and cooperative firms of the South Korean businesses at the complex,” the official told Yonhap. “The measure can also help small businesses.”

Under the administration of former President Park Geun-hye, the government had refused to cover the full amount of losses, saying that the remainder should be covered by the companies’ insurance policies. However, under a new administration, the government seems to have changed its stance.

“We are reviewing the situation to cover all the damage that has been confirmed,” the official said. “However, we have yet to finalize the details and the scale of the compensation.”

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