Government Attempts Inter-Korean Barter Trade... Late Hit by North Korea Sanctions (Comprehensive)

Ministry of Unification Promotes Barter Trade of North Korean Alcohol for South Korean Sugar
Kaesong Goryeo Ginseng Trading Company Confirmed as Subject to North Korea Sanctions

Minister of Unification Lee In-young is giving a special lecture for the Advanced Course in Unification Policy at the Korea Institute for National Unification on the 20th at Lotte Hotel Seoul.

The Ministry of Unification's inter-Korean barter trade project, aimed at opening the door to inter-Korean cooperation, has been hampered from the outset by North Korea sanctions. It was belatedly confirmed that the North Korean company Kaesong Goryeo Insam Trading Company is subject to North Korea sanctions, and the Ministry of Unification is reportedly considering excluding the company from the project.

Originally, the Ministry of Unification planned to exchange South Korean sugar for North Korean liquor, but there are criticisms that the project was hastily pushed forward without thoroughly reviewing the sanctions.

According to Kim Byung-gi of the Democratic Party and Ha Tae-kyung of the United Future Party, the ruling and opposition floor leaders of the National Assembly Intelligence Committee, the Ministry of Unification announced during a closed-door briefing on the 24th that it had withdrawn the business plan with North Korea's Kaesong Goryeo Insam Trading Company, which was part of the inter-Korean barter trade project. Seo Ho, the Vice Minister of Unification, attended the briefing.

Minister of Unification Lee In-young has expressed the idea of opening the door to inter-Korean exchange and cooperation through a "small trade" barter system that can avoid violating international sanctions against North Korea. Even before his inauguration, he proposed exchanging North Korea's Geumgangsan water, Baekdusan water, and Daedonggang liquor for South Korea's rice and medicines.

Subsequently, a barter contract was made between a South Korean civic group and North Korea's Kaesong Goryeo Insam Trading Company to exchange North Korean Kaesong Goryeo Insam liquor and Deuljjuk liquor for South Korean sugar, and the Ministry of Unification has been actively reviewing import and export approvals.

However, Kaesong Goryeo Insam Trading Company is presumed to be a foreign currency-earning company under the Workers' Party's Office No. 39 and has been confirmed as a sanctioned entity by the United States and the international community. Representative Ha said, "It seems the Ministry of Unification did not properly verify the target company with the National Intelligence Service," adding, "This project should be considered completely withdrawn."

Concerns that Kaesong Goryeo Insam Trading Company might be included in the North Korea sanctions list and that careful review is necessary have already been raised. Joshua Stanton, a U.S. sanctions expert lawyer, warned on his Twitter earlier this month, "If the trading partner is a subsidiary or shell company of a UN or U.S. sanctioned North Korean entity, it constitutes a sanctions violation," and stressed that the burden of confirming otherwise lies with the South Korean government and companies.

However, the Ministry of Unification maintains that the barter trade project itself is not being scrapped. Only the liquor-sugar exchange project with Kaesong Goryeo Insam Trading Company has been canceled, while the "small trade" concept such as barter remains valid. The Ministry emphasized that it has never used the term "withdrawal."

On the 18th, Harry Harris, the U.S. Ambassador to Korea, spoke during his first meeting with Lee In-young, the Minister of Unification, after his inauguration at the Minister's Office in the Government Seoul Office Building.

After the remarks by the ruling and opposition floor leaders of the Intelligence Committee sparked controversy, the Ministry of Unification issued a separate statement in the afternoon, saying, "The Ministry of Unification has never made a 'withdrawal' statement," and that "it is inappropriate to use the term 'withdrawal' regarding matters still under review."

The Ministry explained, "Kaesong Goryeo Insam Trading Company is one of several North Korean contracting parties," and "considering concerns about the company, the Ministry is in discussions about adjusting contract details with the company that applied for approval of inter-Korean goods import and export."

Meanwhile, during the Intelligence Committee meeting, issues regarding communication between the Ministry of Unification and the National Intelligence Service were also raised. Representative Kim said, "There were concerns that information exchange between the Ministry of Unification and the National Intelligence Service is not very smooth," adding, "The issue related to the unauthorized discharge at Hwanggam Dam is also an example."

This content was produced with the assistance of AI translation services.