Pyongyang reportedly demanded during last week's inter-Korean talks that Seoul return 12 North Korean restaurant workers who defected to the South from China in 2016 as a condition for the resumption of separated family reunions.
Japan's Kyodo News issued the report on Sunday, quoting multiple sources familiar with North Korea affairs.
According to the report, North Korea claims that the 12 North Koreans were kidnapped by the South and that the Moon Jae-in government is grappling to find a proper solution to the issue.
A Unification Ministry official in Seoul said that Pyongyang raised the issue during the high-level talks and the South Korean delegation explained that the 12 North Koreans defected to the South of their own will.
Last week, North Korea agreed to hold inter-Korean talks on its Olympic participation and military talks, but the issue of inter-Korean family reunions was not included in the final agreement.