This article examines how Japan and South Korea legally settled issues concerning cultural property and individual compensation during the 1965 negotiations.
It clarifies the nature of lump-sum payments requested by the Korean government, Japan’s concessions, and the later controversy over how the funds were used within South Korea.

June 9, 2016

Cultural Property Restitution

For details, see “The Issue of Cultural Properties Removed from the Korean Peninsula.”
Regarding the restitution of cultural properties removed from the Korean Peninsula, a supplementary agreement titled “Agreement between Japan and the Republic of Korea Concerning Cultural Property and Cultural Cooperation” was concluded.
As a result, the issue of cultural property restitution between Japan and South Korea was legally and finally settled.

Japan maintained the position that these items had been acquired through proper procedures, either by purchase or donation, and therefore there was no obligation under international law to return them, but nevertheless transferred approximately 1,321 cultural properties to the Korean side.
Foreign Minister Etsusaburo Shiina explained that “there is absolutely no obligation to return them, but they were handed over as an act of good faith cooperation regarding Korea’s cultural issues.”
Initially, the Korean side insisted on the term “return,” while Japan insisted on the term “donation,” and ultimately both sides agreed on the expression “transfer.”

Individual Compensation

With regard to claims against Japan asserted by South Korea during the negotiations (including unpaid wages and pensions of former Japanese military personnel and civilian employees who became Korean nationals, as well as other seized properties), the Japanese government proposed making individual repayments on the condition that South Korea submit documentation such as lists of conscripted workers.
However, the South Korean government stated that “compensation to individuals will be carried out by the Korean government, so Japan should make a lump-sum payment to the Korean government,” and demanded a total of 2.1 billion U.S. dollars in cash along with the return of various tangible assets.
In subsequent negotiations, Japan agreed to a lump-sum payment to the Korean government but rejected the demand for 2.1 billion dollars and the return of tangible assets, after which South Korea compromised on the amount.
Japan then provided and financed 300 million dollars in grants, 200 million dollars in low-interest loans, and 300 million dollars in private-sector loans, designated as “independence celebration funds” and “development assistance.”

At that time, the South Korean government distributed very little of these funds and loans to the individuals who actually held claims against Japan, instead using them to build its own economic infrastructure.
Currently, movements criticizing this practice have emerged within South Korea.
Furthermore, during the negotiations it became clear that assets worth 5.3 billion dollars left on the Korean Peninsula by Japan during its period of rule had already been confiscated by the United States and the Soviet Union, which occupied the peninsula, and this issue also became one of the points of contention.
During the negotiations, Japan also raised the issue of returning these personal and state-owned assets belonging to Japanese nationals, but ultimately Japan renounced all such claims.

To be continued.