• By The Financial District


Japan-South Korea relations were hanging in the balance as a South Korean court was scheduled to complete proceedings Tuesday to seize the assets of a Japanese company in accordance with the ruling that ordered Japanese companies to pay compensation to former requisitioned workers, Yomiuri Shimbun reported late on August 2, 2020.

If the seized assets were converted to cash, the Japanese government intends to implement countermeasures and bilateral relations are sure to deteriorate even further. Chief Cabinet Secretary Yoshihide Suga indicated Saturday during a program on Yomiuri TV that Japan will take decisive action if the assets are cashed in. “We are considering all possible measures. The direction is clear,” Suga said.

The Japanese government has maintained that the issue of former requisitioned workers was resolved by the 1965 Agreement on the Settlement of Problems concerning Property and Claims and on Economic Cooperation between the two countries.

Several proposals are being considered if the assets are converted to cash, including raising tariffs on South Korea and suspending remittances. In June, a branch of the Daegu District Court in South Korea started the process for “service by publication,” through which the document ordering the seizure of assets will be deemed to have been delivered to Nippon Steel — formerly Nippon Steel & Sumitomo Metal Corp. — which lost the lawsuit. South Korea’s Supreme Court ordered Nippon Steel to pay 100 million won (about ¥8.8 million) to each of the four former requisitioned workers and the ruling was finalized. In January and March 2019, the district court branch ordered the seizure of 194,794 shares in Posco-Nippon Steel RHF Joint Venture Co. (PNR), which was set up by Nippon Steel and a major South Korean steelmaker.