CHANGE OF STATUS

Court rules Chongryun property not tax-exempt

by Jun Hongo

The Tokyo District Court rejected a lawsuit Friday filed by a limited partnership company operated by and on behalf of the pro-Pyongyang group Chongryun seeking exemption from fixed asset taxes on its headquarters and two other properties in Tokyo.

The court said the headquarters of Chongryun, the General Association of Korean Residents in Japan, in Chiyoda Ward, Tokyo, that is being seized by the same court to pay off the group’s debts, is not an embassy and thus not exempt from the taxes.

Presiding Judge Makoto Jozuka said the properties in Chiyoda Ward are clearly distinct from properties used by official diplomatic delegations, regardless of Chongryun’s job of processing visas for Pyongyang.

“Chongryun cannot be called North Korea’s administrative organization but only a voluntary group,” the court said.

Because there are no formal diplomatic relations with Pyongyang, the Chongryun headquarters in Chiyoda Ward is generally considered North Korea’s de facto embassy, ever since the pro-Pyongyang group began building on properties in Japan in the mid-1960s.

Initially, the Tokyo Metropolitan Government did not ask the pro-Pyongyang group to pay fixed-asset and urban-planning taxes, saying it recognized the properties were being used for a state delegation here and as such were exempt from taxation under the Vienna Convention.

But only 10 months after North Korean leader Kim Jong Il admitted in September 2002 that the country had kidnapped 13 Japanese in the 1970s and 80s, Tokyo Gov. Shintaro Ishihara had about 42 million yen in taxes imposed on the group for the 2003 tax year.

The three properties, including a 10-story office building, were seized by the metro government in September 2003 after the deadline to pay the bill passed.

The properties were then given back to Chongryun in mid-April when Chongryun paid all its taxes — an estimated total of 120 million yen — for the 2003-2006 tax years.

In the suit filed in May 2004, Chongryun representatives said the properties had never been taxed and Ishihara’s decision to change this policy was “discriminatory treatment that has no legitimate reason.”

The court rejected that claim Friday, stating that the metro government had the right to change its decision and it was carried out in an appropriate manner.

Other municipalities where Chongryun holds properties — it has at least 300 local chapters nationwide — have made a range of decisions on how to treat the group. It has been estimated that Chongryun has 50,000 North Korea-affiliated members nationwide.

The Tokyo headquarters has been in the spotlight since the Tokyo District Court in June ordered the pro-Pyongyang group to pay 62.7 billion yen in debts to the government-backed Resolution and Collection Corp. The verdict allowed for the headquarters building and property to be seized and the process has begun for the RCC to sell it.

In a bizarre twist, a former chief of the Public Security Intelligence Agency and two other men were arrested on allegations they tried to cheat Chongryun out of its rights to the Chiyoda Ward property and swindling them out of 484 million yen.