Bartholet Machinenbau (BMF), based in Flums, signed a deal with Pyongyang to provide a cable car system for seven million francs ($7.55 million), German-language newspaper SonntagsZeitung reported.
However, last month the Swiss federal government at the last moment nixed the agreement, saying the ski lift qualified as a luxury item that cannot be exported to North Korea because of United Nations sanctions, the newspaper said.
The affected Swiss company is unhappy with the decision.
North Korea wants to boost tourism as a way to generate revenue and is planning to build a ski resort in the eastern part of the country.
The plans call for a ski area with 110 kilometres of trails, lifts, hotels and a heliport.
BMF was to deliver the parts for the cable car which were to be assembled on site by a Chinese partner of the Swiss company.
“The export would have posed no problem,” company chairman Roland Bartholet told SonntagsZeitung.
But the federal government decided to override the sale on the advice of the state secretariat for the economy (Seco), which classified the lift as a luxury product.
UN sanctions against the regime of Kim Jong-un forbid sales of luxury goods to North Korea.
The UN Security Council approved sanctions in March — following North Korea’s underground nuclear test — that impose penalties on North Korean banking, travel and trade.
Seco said the planned luxury ski resort is being built for “prestige and for propaganda” purposes of Kim’s regime.
According to a spokesman from the secretariat, it was inconceivable to imagine an ordinary North Korean citizen using the resort’s facilities.
Kim was exposed to Swiss ski resorts when he attended a private school as a teenager in Bern.
North Korea’s ambassador in Switzerland reportedly expressed his anger at the blocked sale during a meeting with Seco officials.
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But the federal government’s decision has been supported by foreign observers.
The issue comes to light as South Korea and the US begin a joint military exercise with 80,000 soldiers to test defence capabilities against a possible invasion from North Korea.
The exercise, which has angered North Korea, is the second this year, although it comes as tensions between North Korea and South Korea are starting to ease.
North Korea agreed on Sunday to a South Korean proposal to resume a programme next month that allows families separated by the 1950-53 Korean War to be reunited.