South Korea said on Wednesday that Seoul suspends joint work in industrial park in North Korea after Pyongyang’s recent rocket launch and nuclear tests, so that the funds for the factory park will not be used for nuclear tests.
South Korean Unification Minister Hong Yong-pyo told media that "We have decided to stop all operations at the Kaesong industrial complex so that... our investment in the complex would not be used by the North to fund its nuclear and missile development."
North Korea launched a long-range rocket on Sunday considered by its rivals as a banned missile technology test.
Hong said they gave notification to Pyongyang of their plans to stop joint operation and Seoul will take necessary measures for the safe return of South Korean nationals there.
The industrial park provided 616 billion won ($515 million) to North Korea since it broke ground in 2003, he added.
The park at the North Korean city of Kaesong near the border was the last remaining project of economic cooperation between the two Koreas.
On Wednesday, Russia also warned the US about its deployment of a missile defence system in South Korea, saying it would start an arms race in the region.
The US and South Korea has announced last week that they will start talks on the deployment of the Terminal High Altitude Area Defence System (THAAD) in response to North Korea’s nuclear tests.
The Russian Foreign Ministry said that "The appearance of elements of the US global missile defence system in the region -- which is characterised by a very difficult security situation -- can provoke an arms race in Northeast Asia and complicate the resolution of the nuclear problem on the Korean peninsula."
"On a more global scale, this step can increase the destructive influence of the US global missile defence system on international security and stability," AFP reported.
The foreign ministry also accused Washington of using Pyongyang’s nuclear and missile tests, which "could not but inspire strong condemnation," to expand its missile defence system.
The THAAD can pursue multiple ballistic missiles up to 2,000 km (1,200 miles) away and its effective range would reach deep into Russia and China.
The system, in service since 2008, was established by Lockheed Martin Corp and cost $885.6 million for each unit.
US and South Korea military officials have said the THAAD is needed in South Korea, which is under threat from the North Korean missile programme.
China has also argued that the system would undermine stability in the delicately balanced region.
Pyongyang has said that the deployment of a missile defence system would be a Cold War tactic to "contain" China and Russia.