South Korea calls for probe as forced labor feud with Japan deepens

By Joyce Lee and Linda Sieg

SEOUL/TOKYO (Reuters) - South Korea called on Friday for an international investigation of what it said were accusations by Japanese officials that it had passed some high-tech materials imported from Japan on to North Korea in violation of U.N. sanctions.

The call is the latest twist in a dispute between the U.S. allies that could disrupt supplies of chips and displays from South Korea's tech giants Samsung Electronics and SK Hynix, which count Apple Inc and other smartphone makers as customers.

Japan last week tightened restrictions on the export of three materials used in smartphone displays and chips, following frustration over what it sees as South Korea's failure to act in response to a ruling by one of its courts last October ordering Japan's Nippon Steel Corp to compensate former forced laborers.

But a Japanese foreign ministry official said on Friday the curbs on exports of the materials were not retaliation in the feud over compensation for South Koreans forced to work for Japanese firms.

Referring to the export curbs, Japanese officials have cited “inadequate management” of sensitive items exported to South Korea as well as lack of consultations to exchange information on export controls.

Complicating the matter are Japanese media reports that some quantity of one of the materials covered by the export curbs, hydrogen fluoride, was shipped to North Korea after being exported to the South. Hydrogen fluoride can be used in chemical weapons.

Kim You-geun, South Korea's deputy director of national security, said South Korea has fully enforced U.N. sanctions on North Korea and international export control regimes on sensitive materials and dual-use technology.

“We express deep regret that senior Japanese officials have been recently making irresponsible comments without presenting a clear basis for them, suggesting our government was violating export controls and not enforcing sanctions,” Kim told a briefing.

“To halt unnecessary disputes and to determine factual basis of the Japanese government's claims, we suggest a panel of U.N. Security Council experts or an appropriate international organization to conduct a fair investigation into any cases of four major export control violations by South Korea and Japan.”

If an investigation found any wrongdoing by the South Korean government, it would apologize and take corrective measures immediately, Kim said.

But if an investigation concluded that South Korea was not at fault, Japan “not only must apologize to our government but will have to immediately withdraw its retaliatory export restrictions”, Kim said.

'NO LINK'

Japanese officials have declined to comment directly on the media reports that South Korea had shipped some quantity of one of the materials to North Korea.

South Koreas industry ministry said on Wednesday it had found 156 cases of unauthorized exports of strategic goods as of March since 2015, but none involved North Korea.

South Korean and Japanese officials were meeting in Tokyo on Friday.

A Japanese foreign ministry official said the export curbs were not meant as retaliation in the forced-labor feud although trade minister Hiroshige Seko, in announcing the curbs, had referred to that dispute, saying South Korea's lack of sufficient response to resolve it had seriously damaged trust between them.

Japan is also threatening to drop South Korea from a “white list” of countries with minimum trade restrictions.

The Japanese ministry official, speaking to reporters on condition of anonymity, said the export restrictions were “necessary measures related to security”.

The official said the government was not linking the two issues and that “logically speaking” the more stringent controls could be removed if South Korea addressed Japan's concerns about its export control system.

Relations between Washington's two Asian allies have long been plagued by memories of Japan's 1910-45 colonization of the peninsula and the war, including the matter of “comfort women”, a euphemism for girls and women forced to work in Japanese wartime military brothels.

The dispute over wartime forced labor worsened last year after a South Korean court ordered Japanese firms to compensate former conscripted laborers.

Japan says the matter was settled by the 1965 treaty and by demanding compensation, South Korea is violating international law.

Many Japanese resent being urged to atone for wartime deeds of seven decades ago, while many in South Korea doubt the sincerity of Japan's past apologies.