SEOUL, South Korea and Japan have tentatively agreed to create a "future youth fund" to sponsor scholarships for students, as part of a deal on settling the issue of compensation for Korean victims of Japan's wartime forced labor, sources said Sunday.
The fund will be jointly formed by the Federation of Korean Industries, South Korea's big business lobby, and the Japan Business Federation (Keidanren), according to the government sources.
The South Korean foreign ministry is expected to announce the details Monday along with the details of a broader agreement reached between the two countries to settle the issue of compensation for Korean victims of forced labor during World War II, the sources said.
"There's a high chance South Korea and Japan will form a fund under the aim of moving toward the future and not the past," a senior official told Yonhap News Agency.
In 2018, South Korea's Supreme Court ordered Japan's Nippon Steel and Mitsubishi Heavy Industries to pay compensation to Korean forced labor victims who were mobilized during Japan's 1910-45 colonial occupation of Korea.
The two companies are expected to indirectly contribute to the new fund in the form of Keidanren membership fees or donations.
"Discussions are under way between the two countries' business circles and other sectors on how they can contribute to help the young generations, future generations of South Korea and Japan open a new era in bilateral relations and build up potential," National Security Adviser Kim Sung-han told reporters at Incheon International Airport before departing for Washington for a five-day visit.
The fund's creation "should be understood as President Yoon Suk Yeol making a broad-minded decision with a view to the future rather than being caught up in the frame of compensation," another official said.
South Korea earlier proposed compensating the victims through a government foundation using donations from local businesses, not the accused Japanese companies.
The proposal was met with protest from the victims, but is likely to be the final deal announced by the foreign ministry Monday.
Despite repeated requests from South Korea, Japan reportedly refused to make any contribution to the foundation, insisting that all matters of compensation were settled under a 1965 treaty that normalized bilateral ties.
The local businesses contributing to the foundation are expected to be the beneficiaries of the 1965 treaty.
South Korean steelmaker POSCO Holdings Inc., whose predecessor received US$119.4 million, or 24 percent, of the economic cooperation funds offered by Japan under the 1965 treaty, said it has yet to receive a request from the government to donate to the foundation.
"Once we receive a formal request, we will actively consider it," the company said.
As part of the two countries' agreement, Japanese Prime Minister Fumio Kishida is also expected to state his government's intent to inherit a 1998 joint declaration adopted by then President Kim Dae-jung and then Japanese Prime Minister Keizo Obuchi.
In the declaration, the two leaders called for overcoming the past and building new relations, with Obuchi expressing remorse for the "horrendous damage and pain" Japan's colonial rule inflicted on the Korean people.
Yoon is also reportedly considering visiting Japan late this month to hold a summit with Kishida.
Source: Yonhap News Agency