A new company is trying to get into the North Korea tourism game. Korea Pyongyang Trading USA, based in New York, is looking to diversify out of its current business – importing Pyongyang Soju from North Korea. Founder Steve Park has his eye on Mount Kumgang, the site of a resort that involved a joint venture between South Korean companies and the North Korean government. It went sour when a South Korean tourist was shot there in 2008.
It seems like an interesting business opportunity, given how interesting the hard-to-reach company is too many travelers. And, since it’s so hard to do business with the regime, competition is unlikely to be stiff. The regulatory red tape, on the other hand, is a different story.
South Korea is saying that Korea Pyongyang Trading USA will need to get permission from the U.S. government in order to get the operation off the ground. The Dong-A Ilbo reports:
A government source in Seoul said, “According to U.S. Executive Order 13570 (effectuated on April 19), all products, services and technologies brought into the U.S. require permission from the U.S. government,” adding, “If a company seeks to engage in the service business of Mount Kumgang tours with North Korea, it should win approval from the U.S. government.”
So far, the application hasn’t been submitted.
There’s a reason South Korea is weighing in on this. Inside Investor Relations explains:
This deal [with Steve Park] follows several years of difficulties over managing Mount Kumgang through an agreement with South Korea’s Hyundai Asan. The resort provided significant cash to North Korea, but the arrangement was terminated in 2008 when a North Korean soldier shot dead a tourist from Seoul. South Korean officials demanded an apology, and its northern neighbors say they will “deprive Hyundai of its exclusive right to the mountain tour project and seize all of its assets in the region.”
Is there an ownership or rights dispute in the works? According to The Dong-A Ilbo, officials in Seoul are struggling to accept that North Korea can yank Hyundai Asan’s “exclusive right to the tours.” Of course, there’s always a shot that the U.S. deal will fall apart (with North Korea, this is always a concern!). The Dong-A Ilbo continues, “The South Korean government understands that the North is taking steps to attract another foreign business other than the American company.”
The odds of this happening, however, seem low.
photo by yeowatzup via Flickr