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    Feb 12, 2016

    N. Korea cuts hotlines with Seoul amid Kaesong closure


    NORTH Korea yesterday froze South Korean assets in the inter-Korean industrial complex in its border city of Kaesong, closed the factory park and declared it a military off-limit zone in an angry response to Seoul's decision to pull out of it.

    The decision by both Koreas to shut down the 12-year-old complex - a symbol of cross-border reconciliation and cooperation - has sparked concerns that bilateral tensions could spiral out of control and Seoul's efforts to engage Pyongyang may be headed down the drain, The Korea Herald reported.

    It is not immediately known whether all South Koreans left the complex by 5pm local time yesterday, a deadline set by the North, Yonhap news agency reported.

    A total of 124 South Korean firms, most of them small and medium enterprises, have been running factories at the zone, according to The Korea Herald.

    A statement from Pyongyang said only "personal belongings" are allowed to be brought from the complex to the South.

    It also said that two inter-Korean communication hotlines will be cut off.

    In response, Seoul's Unification Ministry said it would put the safe return of South Koreans as its first concern.

    The government also vowed to minimise damages to the affected firms.

    Seoul's decision on Wednesday to shut down the park is aimed at cutting off a source of hard currency that the North could tap for its nuclear and missile development.

    On Sunday, the North launched a long-range rocket carrying a satellite, which the South and the United States view as a cover for a banned test of intercontinental ballistic technology.

    About US$100 million (S$139 million) had been channelled into the North annually, through the complex from the South, in the form of wages to the 55,000 North Koreans working there.

    These payments were delivered to North Korean authorities and around 20 per cent of the funds were returned to the workers, according to sources.

    Earlier in the day, US signalled its own unilateral moves against North Korea, with the Senate unanimously adopting a bill expanding existing sanctions.

    US and its main Asian allies, South Korea and Japan, have led a push for tough United Nations Security Council sanctions over the North's nuclear weapons programme but have met resistance from China.

    Beijing is more concerned at the prospect of the regime of Kim Jong Un being pushed to collapse.