Japan warned of retaliatory action should the South Korean court proceed with liquidating assets of Japanese companies to cover the claims for forced wartime labor they refuse to pay, snapping the loose truce between the two nations whose relationship hit the worst over wartime and trade issues throughout last year.

“To protect the interests of Japanese companies, we will put all options on the table,” said Tokyo government spokesman Yoshihide Suga in a press briefing on Thursday.

The Pohang branch of Daegu District Court, in southeastern Korea, on Monday posted public notification addressed to Nippon Steel, formerly Nippon Steel & Sumitomo Metal, to start liquidation of its assets remaining in Korea on Aug. 4 in compliance with a higher court order to seize the assets if the defendant does not pay its dues to plaintiffs.

The assets include Nippon Steel & Sumitomo Metal’s assets in Korea - 194,794 shares, worth about 974 million won ($800,000), in POSCO-Nippon Steel RHF Joint Venture (PNR), a joint venture with South Korea’s Posco.

In 2018, the Korean Supreme Court ordered Nippon Steel to pay compensation to Koreans for their forced labor. Same order went to Mitsubishi Heavy Industries and machinery maker Nachi-Fujikoshi. The companies have refused to comply, backed by Tokyo which maintains that all wartime dues had been settled through the 1965 agreement.

The dispute over the issue led Tokyo to restrict exports of key chip-making materials to Korea and stripping whitelist status that enables fast-tracking in exports to allies. Seoul which has stopped its World Trade Organization complaint over the export curbs has renewed the legal process this week on signs of “little effort” from Tokyo to resolve the issue.

By Ahn Jeong-hoon and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]