By Susan Heavey
WASHINGTON (Reuters) - An annual U.S. State Department report on Wednesday cited Russia and China among the world's worst offenders in fighting forced labor and sex trafficking, which could lead to U.S. sanctions.
The U.S. designation drops Russia and China, which already often are at odds with Washington, in the same category as North Korea and Iran.
The State Department ranks countries according to the efforts they make to fight human trafficking and Russia, China and Uzbekistan all fell to the lowest level, Tier 3, in the new report.
While the Chinese government has taken some steps to address the problem, such as vowing to work with international organizations and increasing public awareness, it also has continued to perpetuate the problem in hundreds of its own institutions, the State Department report said.
"Despite these modest signs of interest in anti-trafficking reforms, the Chinese government did not demonstrate significant efforts to comprehensively prohibit and punish all forms of trafficking and to prosecute traffickers," U.S. officials wrote.
The report said China's one-child policy and preference for sons has led to fewer women in the country, thus increasing demand for women as brides or prostitutes.
In Russia, the government "had not established any concrete system for the identification or care of trafficking victims, lacking any formal victim identification and referral mechanism," although there were some "ad hoc efforts," the report said.
The citation is likely to further strain the complicated relations between the United States and the two countries, which already have been strained by the handling of the civil war in Syria and cybersecurity, among other issues.
While it was not immediately clear what the Obama administration might do given the downgrade, human rights advocates and some U.S. lawmakers urged strong steps such as imposing sanctions or withholding foreign aid. They also called on the Russian and Chinese governments to take action.
"China has become the sex and labor trafficking capital of the world," said U.S. Representative Chris Smith, a New Jersey Republican. "Without serious and sustained action by Beijing, it is only going to get worse."
Under U.S. law, Tier 3 countries may face sanctions that do not effect trade or humanitarian assistance, such as educational funding or culture programs.
John Sifton, Asia advocacy director for Human Rights Watch, said China and Russia have been given several chances to improve their effort to combat such trafficking and protect victims.
"The question for the White House is whether they're prepared to execute the sanctions," he said. "The question for China, Russia, and Uzbekistan is whether they're prepared to make commitments in the next 90 days to avoid those sanctions."
A GLOBAL PROBLEM
Despite pledges to combat such crimes, countries have failed to identify tens of millions of victims, according to the report, which ranked 188 countries and territories based on their efforts.
Just 40,000 victims of so-called modern slavery were identified last year among the estimated 27 million men, women and children who are held against their will globally, the report said.
"Despite a growing body of knowledge about victims and their needs, finding them remains a tremendous challenge," department officials wrote in their 2013 Trafficking in Persons report.
Among the millions of victims, most are women and girls, although many men and boys are also affected, the report said.
Human trafficking can take many forms - from prostitution to forced labor such as migrant work or domestic servitude - and children also can be victims. Perpetrators are difficult to track and largely circulate in the private economy, although cases can involve rebel groups or national authorities.
Among perpetrators, 7,705 were prosecuted in 2012, leading to 4,746 convictions, a slight increase from the prior year, U.S. officials said. In 2011, there were 7,206 prosecutions and 4,239 convictions.
Overall, there were far more countries downgraded than cited as improving, Sifton said.
"This is a much more negative report than years past," he said. "Russia and China rightly deserve attention but many other countries have very serious trafficking and forced labor problems."
Countries that did show improvement in fighting human trafficking include the Republic of Congo, Iraq and Azerbaijan, Sifton said.
President Barack Obama last year pledged to step up the U.S. effort to target trafficking.
Secretary of State John Kerry said Wednesday's report would guide U.S. action but did not offer details, citing continued "diplomacy and development efforts" as well as work with victim support groups, the private sector and others.
"Every government can do better," Kerry said in a letter accompanying the findings.
(Reporting by Susan Heavey; Editing by Bill Trott)