UCLA Pacific Basin Law Journal

The Kaesong Industrial Complex (KIC) in North Korea is the last vestige of inter-Korean cooperation. It contributes to economic modernization of North Korea, peace and stability in East Asia, and international trade and nonproliferation of nuclear weapons. However, flaws in the KIC legislative framework leave businesses and individuals unprotected and threaten the very existence of the KIC. This Article examines the legislative problems facing the KIC and offers proposals for legislative reform. Part I demonstrates that the KIC plays an important role in the domestic, regional, and international contexts. Part II presents a critical analysis of KIC legislation. It identifies three main problems: (1) flaws in the statutory text; (2) questions regarding the effectiveness of KIC laws; and (3) inadequate dispute resolution provisions. It argues that the combined effect of these legislative problems is to give North Korean authorities control over KIC businesses, personnel, and operations. Part III presents proposals for KIC legislative reform. It shows that two approaches are most promising foreign assistance in improving and reforming KIC laws and inter-Korean agreements. The Article concludes that only through legislative reform can the KIC realize its domestic, regional, and international potential by safeguarding its businesses and individuals and by ensuring its stability and sound development.