hankyoreh

By Park Byong-soo, staff reporter
The South Korean government has notified North Korea that it will charge delay penalties for money North Korea owes for food loans.
Ministry of Unification spokesman Kim Hyeong-seok explained on Dec. 7 that the Export-Import Bank of Korea had sent a notice to North Korea's Chosun Trade Bank that day urging it to repay its food loans.
The notice include an announcement that the bank was being charged a delay compensation of 2% per year according to the loan contract, Kim added.
June 7 was the deadline for the first repayment of US$5.83 million from the US$88.36 million owed for the 300,000 tons of rice and 200,000 tons of corn the South Korean government lent to North Korea in 2000.
The government previously made repayment requests on June 8, July 17, and Sept. 27, but received no response from North Korea.
Analysts said the demand appears to have the aim of pressuring Pyongyang after the announcement of its upcoming rocket launch.
Indeed, Kim referenced the launch, saying North Korea was "preparing for a missile launch without repaying its food loans by the deadline, even when its own people are suffering from a food shortage. We hope to see this situation resolved swiftly."
The South Korean government provided a total of 2.4 million tons of rice and 200,000 tons of corn in food loans to North Korea between 2000 and 2007. The total was valued at US$720,040,000, which was to be repaid over 20 years at 1% annual interest, with a 10-year grace period.
The total amount owed by North Korea through 2037 is US$875,320,000.
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