The Japanese government said Monday it is placing new restrictions on technology exports to South Korea, citing "significant damage to the relationship of mutual trust" between the countries as relations sink to the lowest point in years amid a row over wartime labor.
The Ministry of Economy, Trade and Industry said that effective Thursday individual applications will be necessary for exports to South Korea of three materials -- fluorinated polyimide, hydrogen fluoride and resists -- used in the manufacturing process of semiconductors and display screens for smartphones and TVs.
The ministry did not ban such exports outright but said screening of the applications would require about 90 days.
It said there have been cases of inappropriate implementation of export control measures in the past for items shipped to South Korea, but did not elaborate.
The South Korean government condemned the announcement, calling it a violation of international law and vowing to take firm action. Sung Yun Mo, the country's minister of industry and trade, said he would consider taking the matter to the World Trade Organization.
Deputy Chief Cabinet Secretary Yasutoshi Nishimura said the step is being taken due to security concerns, adding that it is "in compliance with WTO rules and not retaliation" against South Korean court orders for Japanese companies to compensate workers for forced labor during Japan's 1910-1945 colonial rule of the Korean Peninsula.
S. Korea eyes taking Japan to WTO over export curbs
The restrictions could bring Japan under scrutiny from the international community, especially as just last week, as chair of the Group of 20 summit in Osaka, it touted the importance of free trade.
It could also deal a blow to the technology industries of both countries, whose supply chains are deeply linked. Japan has a large market share in all three items, including a roughly 90 percent share in resists, which are used to transfer circuit patterns onto silicon wafers when manufacturing semiconductors.
A worker at a Japanese company that exports the material to South Korea bemoaned the time and effort it would take to file individual applications, saying it could lead to a drop in sales.
The industry ministry said it will closely monitor the impact on companies.
But Akio Mimura, the head of the Tokyo Chamber of Commerce and Industry, expressed support for the move, saying, "It's one way of dealing with an issue that has seen no progress." Mimura was previously president of one of the companies implicated in the wartime labor cases, Nippon Steel Corp.
The ministry also said it began Monday the process of removing South Korea from a "white list" of countries that can relatively easily buy Japanese electronic components that can be used for military purposes.
Japan maintains that the issue of compensation for wartime labor has already been settled by a 1965 accord under which it provided South Korea $500 million in financial aid.
Lawyers for the plaintiffs have seized the Japanese firms' assets in South Korea through local courts, and are threatening to sell them if they continue to refuse to engage in compensation talks.
South Korea proposed last month that companies from both countries fund compensation for the plaintiffs, but Japan rebuffed the proposal.
The dispute, as well as an incident where a South Korean destroyer allegedly locked on its fire-control radar to a Japanese patrol plane late last year, has kept bilateral ties frosty.
Prime Minister Shinzo Abe and South Korean President Moon Jae In did not hold one-on-one talks during last week's Group of 20 summit in Osaka.