Seoul is readying various countermeasures against fresh retaliation from Tokyo as a Korean court is set to liquidate assets of incompliant Japanese companies to compensate Korean victims of wartime forced labor, the Korean foreign ministry said on Monday.

Effective from Tuesday, the Pohang branch of Daegu District Court will be able to act out its June order to seize shares that Nippon Steel Corp. has in a joint venture, PNR, with Korean steelmaker Posco and liquidate to pay damages to four Korean plaintiffs for their forced and underpaid labor at a steel mill during the World War II.

Tokyo and Japanese companies defy the Korean court rulings as they argue all rights to wartime claims were settled completely through the bilateral basic treaty in 1965 when the two governments normalized diplomatic ties.

The local court in June posted online documents ordering the seizure of Nippon Steel assets in Korea and gave a two-month notice until Aug. 4 of the move to the Japanese company.

Now that it “deems” the Japanese company has received the notice, the court is free to sell off the seized shares to compensate Korean victims forced to work at Japanese companies during the 1910-45 colonial period.

According to NHK report, Nippon Steel plans to appeal in an attempt to stall the liquidation process.

The Japanese government has warned several times that it will stand against such a move with retaliatory measures, which could include tariff hikes, remittance discontinuation, stricter visa issuance, financial sanctions, seizure of Korean properties in Japan, and recalling Japanese Ambassador to Korea.

In response to Japan’s warnings for a fresh round of retaliation, the Korean presidential office and related ministries including the foreign ministry, economy and finance ministry, and trade ministry, have been reviewing countermeasures under various scenarios that can be taken by the Japanese government.

In 2018, the Korean Supreme Court made a ruling ordering Nippon Steel & Sumitomo Metal – now Nippon Steel – to pay 100 billion won ($83.6 million) each to four Korean victims of forced labor during World War II. The Japanese company, however, has refused to make the compensation, prompting official procedure to seize assets in Korea. The Japanese government has defended Nippon Steel’s decision, saying that all claims for compensation for Koreans forced to work for the Japanese company during the colonial period were settled under a 1965 treaty that established diplomatic ties between the two countries, as well as a fund set up in 2015.

In July last year, Japan tightened export curbs on high-tech materials crucial in producing semiconductors and displays, Korea’s mainstay export items, and removed Korea from its white list of trusted trading partners. Seoul accused Tokyo of politically retaliating the neighbor against the Korean high court ruling in 2018.

Despite Japan’s denial, the Korean government also kicked out Japan from its own list of most-trusted trading partners. Last month, it also revived a complaint it filed with the World Trade Organization (WTO) last year over Japan’s trade restrictions.

The Korean government reiterates that it will primarily resolve wartime forced labor issues through diplomatic efforts but if the Japanese government steps up with retaliatory measures, it will too make relevant moves.

The Korean foreign ministry said that the government is open to holding discussions on various rational solutions while taking into consideration Korea-Japan relations, realizing rights of victims, and respecting judicial decision. It has been involved in close consultation to look for solution plan with those involved while lending an ear to various opinions of all social standings.

By Pulse

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