South Korea says it is suspending operations at the Kaesong Industrial Complex in retaliation for North Korea’s recent rocket launch and nuclear test.

The North’s actions have worried its neighbors, among them Japan, which announced new sanctions on Pyongyang.

“The government has decided to fully halt the Kaeseong industrial park to block its proceeds from being channeled into North Korea’s nuclear and missile development, and our businesses from being sacrificed,” Hong Yong-pyo, the South Korean unification minister, said at a news conference.  

More than 120 South Korean companies operate in the Kaeseong complex, which operates in the North Korean city of the same name and was established more than a decade ago as a symbol of cooperation between the two countries. The facility employs more than 50,000 North Korean workers, has earned Pyongyang about $515 million since it opened in 2004, and provides the North one of its few sources of hard currency. The workers there earn about $100 million annually, of which 30 percent goes to the government. In turn, South Korean companies get access to cheap labor.

“The government has decided to fully halt the Gaeseong industrial park to block its proceeds from being channeled into North Korea’s nuclear and missile development, and our businesses from being sacrificed,” Hong said.

But South Korean business groups called the decision hasty, noting that 184 South Korean citizens were still in the area.

“We request for a reconsideration of the decision,” Chung Ki-sub, head of the business association, said, according to the Korea Herald. “We want to make clear that the businesses’ losses should not be restored in any way.”

Meanwhile in Tokyo, Japan tightened its sanctions on North Korea in response to Sunday’s launch by Pyongyang of what it called a satellite, but Japan and others believe was a long-range ballistic missile. That launch came after the January 6 announcement by Pyongyang that it had tested a hydrogen bomb—a claim about which international experts have expressed skepticism. Still, both acts drew international condemnation and the threat of more sanctions.

On Tuesday in Washington, James Clapper, the director of national intelligence, told a Senate panel North Korea has expanded its Yongbyon enrichment facility and has restarted the plutonium-production reactor. The Communist Party-run country could recover plutonium from spent fuel “within a matter of weeks to months,” Clapper said.