Kim Jong Un, North Korea’s leader, left, and Moon Jae-in, South Korea’s president, second left, Kim Jung-sook, South Korea’s first lady, right, and Ri Sol Ju, North Korea’s first lady, second right, depart the inter-Korean summit at the village of Panmunjom in the Demilitarized Zone (DMZ) in Paju, South Korea. (Source: Inter-Korean Summit Press Corps/Pool via Bloomberg)

North, South Korea Open Rail Project Despite Sanctions Barrier

(Bloomberg) -- North and South Korean staged a symbolic ground-breaking ceremony to upgrade severed rail links, although UN Security Council approval would be needed to advance the project.

Long-stalled plans to restore rail links severed by the Korean War were revived in historic summits by North Korea leader Kim Jong Un and South Korean President Moon Jae-in earlier this year. While South Korea said the Security Council granted an exemption to United Nations sanctions Tuesday to allow the ceremony to proceed, additional relief would be needed to start construction.

North, South Korea Open Rail Project Despite Sanctions Barrier

“The result of the North and South Korean railway and road project depends on our nation’s mental strength and will. If we are swayed by others’ views, we cannot achieve the unification that our nation wants,” Kim Yun Hyok, North Korea’s vice railway minister, said at the ceremony, according to the YTN TV network.

“Railways will now also play a role of reducing the gap between the hearts of South and North Korea,” South Korean Transport Minister Kim Hyun-mee said.

The rail project was first launched more than 15 years ago, but scuttled by political acrimony and global sanctions imposed on Pyongyang over its pursuit of nuclear weapons. The U.S., which holds a Security Council veto, has refused to ease the economic penalties until North Korea takes steps toward disarmament and talks between the two sides have achieved little progress.

Second Summit

Last week, North Korean state media said removal of the U.S.’s nuclear weapons from the region was a condition of its own disarmament, raising the stakes for President Donald Trump’s efforts to hold a second summit with Kim, after their first meeting in June.

Seoul has said work to modernize North Korean railways and roads before connecting them with its own wouldn’t start until the international sanctions against Pyongyang were lifted, adding construction hinges on North Korea’s denuclearization steps.

North Korean Ri Son Gwon who oversees the North’s exchanges with the South, his South Korean counterpart Cho Myoung-Gyon and transport officials from China, Russia and Mongolia were among the hundreds of people attending the rail event in the North Korean border city of Gaeseong.

Sanctions Pressure

Sanctions enforced by the Security Council and the U.S. prohibit sending fuel or conducting economic activities that could generate cash for Kim’s regime. South Korea said in November it had won exemptions for the rail survey.

The last rail service during the 1950-1953 Korean War came in 1951 when a train carrying wounded soldiers and refugees crossed into South Korea. Links were cut for decades after that.

But a few years after the first summit of leaders on the divided peninsula in 2000, South Korea built roads and restored rail links to the North Korean border region. For a brief period about a decade ago, South Korea ran freight trains into Gaeseong, where South Korea had an industrial park, until political tensions undermined the project.

Moon’s rapprochement toward North Korea included three summits with Kim Jong Un this year, but have been limited by international sanctions and the slowing pace of diplomacy between the two sides.

Pyongyang hasn’t responded to the latest move by Washington to review its policy on humanitarian aid to the North, which was proposed when U.S. nuclear envoy Stephen Biegun was in Seoul last week.

The Chinese ambassador to South Korea, Qiu Guohong, told South Korea’s Kim Hyun-mee during the event Wednesday that he believed the railway project would help denuclearization.

©2018 Bloomberg L.P.