This week, Japan’s Ministry of Economy, Trade, and Industry announced new restrictions on exports to South Korea of key materials used in tech manufacturing, a move that ups the ante amidst a period of increased tensions between the two countries.
The core issue is an ongoing debate over South Korean court rulings that have allowed individual Korean citizens to sue Japanese companies for compensation over their use of forced labor during World War II. As far as Japan is concerned, all issues related to wartime conduct were settled in 1965 when the two countries signed agreements establishing diplomatic and economic relations that included some reparations for Japanese actions during the war. However, since then Korean activists have disputed the agreement, saying that it did not sufficiently compensate victims, including comfort women and forced laborers, and did not reflect sincere atonement for the Japanese government’s actions during the war.
Last fall, these groups gained major momentum when South Korea’s Supreme Court officially ruled that the 1965 agreement resolved intergovernmental disputes, but did not bar individuals from suing Japanese companies directly. In two related rulings, the Supreme Court ordered Nippon Steel & Sumitomo Metal Corporation to pay four plaintiffs 100 million won ($88,740) each in compensation, and ordered Mitsubishi Heavy Industries, Ltd. to pay compensation ranging from 80-120 million won to 10 additional plaintiffs. After the two companies repeatedly refused to pay the awarded compensation, local Korean courts approved the seizure of corporate assets held in South Korea in order to fulfill the Supreme Court’s verdict. These rulings have opened the floodgates, much to Japan’s chagrin — according to Japan’s Ministry of Foreign Affairs, there are more than a dozen additional cases pending that could impact more than 70 companies.
Japan-South Korea Spat Threatens to Morph Into Trade War | The Diplomat
