South Korean Industry Minister Sung Yun-mo on Tuesday said Japan’s claim that its hi-tech materials were routed to North Korea was “completely groundless,” calling on Tokyo to stop making false accusations.

South Korea and Japan will hold bilateral talks on Friday in Tokyo although the details are yet to be finalized, he added during a press conference.

“We have abided by the responsibility of the international community for peace and security by exemplarily controlling our export system,” the minister said.

Sung said South Korea has joined all the four international export control systems and three treaties. No country has raised doubts on the credibility of the country’s export control system.

Sung’s remarks come after Japanese Prime Minister Shinzo Abe said Sunday in a debate hosted by BS Fuji TV that South Korea may not be abiding by UN sanctions on the North because it did not stick to an agreement with Tokyo over the issue of wartime forced labor.

The broadcaster also reported that Koichi Hagiuda, a close confidant of Abe and senior member of Japan’s ruling Liberal Democratic Party, suggested that chemical exports, including hydrogen fluoride which could be diverted for military use, to South Korea could end up in the North.

Sung went on to say the South Korean government has investigated the companies which have recently processed or exported hydrogen fluoride after importing it from Japan. 

“We haven’t found any evidence that hydrogen fluoride was leaked to countries sanctioned by the UN, including North Korea,” he noted.

“If speculation raised (by Japan) has grounds, the responsible stance of Japan, as a party to the UN Security Council resolution, would be to share detailed information and closely work with related parties, including South Korea.”

As for the bilateral talks over Japan’s export restrictions, Sung said it will be held on Friday afternoon in Tokyo without giving further details.

The government said it plans to map out measures to localize chip materials soon. “The government will spare no effort to support the industry. When detailed plans are set, we will tell you the date and contents.”

Prime Minister Lee Nak-yon, meanwhile, said that the government will seek additional funding to foster South Korea’s industrial materials production.

At Tuesday’s Cabinet meeting, Lee stressed the need to develop the industry, referring to the dispute with Japan. 

“(The government) plans to ask the National Assembly (to approve) the additional funding necessary for that in the extra budget this time,” Lee said.

The government proposed a 6.7 trillion-won ($5.6 billion) supplementary budget to cope with the economic slowdown and fine dust air pollution in April. The bill is still pending, with the main opposition Liberty Korea Party opposing much of the proposed spending.

Lee’s comments echo that of President Moon Jae-in, who on Monday called for efforts to restructure the country’s manufacturing industry to reduce its dependence on imports for key materials and equipment.

Moon also stressed the need for the two countries to resolve the issue diplomatically, but also warned that Seoul will be forced to take “necessary measures” if Japan’s move leads to real damages to local companies.

He did not elaborate on the “necessary measures,” but government officials have said that the matter could be taken to the World Trade Organization for dispute settlement.

Moon is also set to meet with leaders of the country’s largest corporations on Wednesday as part of the administration’s efforts to minimize the impact of Japan’s actions on local firms.

By Shin Ji-hye and Choi He-suk
(shinjh@heraldcorp.com) (cheesuk@heraldcorp.com)