Japan's Deputy Prime Minister Taro Aso attends a press conference in Tokyo on June 4, 2018. (JIJI PRESS / AFP)

TOKYO - Japan would need to respond if South Korea seizes Japanese assets over wartime forced labour disputes, Deputy Prime Minister Taro Aso said on Tuesday, describing such a move as being in breach of international law.

South Korea’s Supreme Court in 2018 ordered Japan’s Nippon Steel Corp to pay 100 million won (US$83,800) each to four South Koreans as compensation for forced labor during World War II, angering Japan which says the issue of compensation was settled under a 1965 treaty and that the ruling violated international law

“It’s clearly against international law; that’s our stance,” Aso, who is also Japan’s finance minister, told reporters at a regular news conference when asked about the issue.

“If (Japan’s) assets were confiscated ... we would have no choice but to respond, so we must avoid that from happening,” he said.

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Kim In-chul, a spokesman for South Korea’s foreign ministry, told reporters on Tuesday he hoped Japan would “more actively and sincerely” respond to ongoing diplomatic efforts to resolve tensions.

South Korea’s Supreme Court in 2018 ordered Japan’s Nippon Steel Corp to pay 100 million won (US$83,800) each to four South Koreans as compensation for forced labor during World War II, angering Japan which says the issue of compensation was settled under a 1965 treaty and that the ruling violated international law.

A subsequent ruling by a South Korean lower court allowed for the seizure of Nippon Steel assets. 

Starting midnight Tuesday, the Pohang branch of the Daegu District Court gained the right to start procedures to auction off some of Nippon Steel’s stake in a joint venture with POSCO, South Korean media reported.

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Nippon Steel said on Tuesday it will appeal the South Korean court ruling that allows for a seizure of its assets.

Japanese Chief Cabinet Secretary Yoshihide Suga also reiterated on Tuesday that the South Korean ruling was a “clear violation of international law”, adding that any asset seizure must be prevented to keep the situation from becoming more serious.

Following the ruling, Japan last year said it would stop preferential treatment for shipments to South Korea of three materials whose production it dominates and which are used by firms such as Samsung Electronics Co Ltd.

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Seoul has filed a complaint to the World Trade Organization (WTO) over the export curbs which remain in place for two of the three materials. The WTO last month set up a panel to rule on the complaint.

Nippon Steel holds 81,075 shares in PNR, a Korea-based joint venture with steelmaker POSCO, which are worth about 400 million won at face value, according to Yonhap news agency.

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Procedurally, it could take several months before a sale is completed, a South Korean official said.

If Japan takes retaliatory steps, South Korea might respond by terminating a bilateral intelligence-sharing pact called the General Security of Military Information Agreement, Chang Ho-jin, a former South Korean presidential secretary on foreign policy, told Reuters.

South Korea had flagged it was going to end the pact last year but in November reversed that decision.

Foreign ministry spokesman Kim said the government could decide to end the pact at any time and a decision would depend on how Japan deals with the issue of the export curbs.