SEOUL, Nov. 20 (UPI) -- South Korea announced Wednesday that it will disband a foundation established under its agreement with Japan to settle "comfort women" issues.
"We decided to disband the foundation after many reviews and discussions in consideration of victims," said Jin Seon-mi, minister of the gender equality and family, in a statement.
The announcement comes amid strained diplomatic relations between South Korea and Japan over another historical issue of forced labor during the 1910-45 Japanese colonial rule of the Korean Peninsula.
South Korea and Japan reached an agreement in 2015 to settle the issue of South Korean victims of Japan's wartime military sexual slavery - euphemistically called "comfort women."
The Japanese government contributed some $9 million (1 billion yen) to set up the Reconciliation and Healing Foundation that oversees compensation to surviving victims and relatives of those who died.
However, South Korean surviving victims have refused to accept the agreement and said the Japanese government is trying to get away with wartime crimes by paying money. Victims and activists have staged protests that demand the government to shut down the foundation.
The Reconciliation and Healing Foundation, launched in 2016, hasn't been functioning for more than a year after some of its directors resigned amid a lack of support and opposition from the victims.
The South Korean government under President Moon Jae-in started reconsidering the 2015 agreement, signed under the previous administration. It also decided not to use the fund from Japan and instead cover it with the South Korean budget.
In September, Moon said in his meeting with Japanese Prime Minister Shinzo Abe that the two countries should seek ways to close the foundation.
Last month, South Korea and Japan discussed the issue again in a meeting attended by vice foreign ministers. South Korea wanted to shut down the foundation while Japan stressed the need to fully implement the 2015 agreement, according to Yonhap News.
Japanese foreign minister Taro Kono called South Korea's decision to annul the agreement "unacceptable," according to Yonhap News.
"We will demand that South Korea implements the agreement," he said to reporters in Tokyo.
Japanese Prime Minister Shinzo Abe decried the decision as well.
"The agreement made three years resolved the issue of 'comfort women' finally and irreversibly," he said.