On 12 July 2001, the US State Department released its first annual trafficking in persons report. The report says that at least 700,000 persons, especially women and children, are trafficked across international borders each year and describes this phenomenon as a modern-day form of slavery.

The report looks at all countries where a "significant number" of victims (one hundred or more) have been trafficked for sexual exploitation, involuntary servitude, debt bondage and slavery.

The report evaluates 82 countries and places them in one of three tiers. The first tier is for countries which fully comply with the minimum standards set out in the Victims of Trafficking and Violence Protection Act, which was passed in the United States in 2000. Minimum standards include prohibiting trafficking, proscribing punishments commensurate with the crime and providing a wide range of protective services for victims.

The second tier is for countries that do not comply with the Act's minimum standards, but are making serious efforts to do so and the third tier is for countries which do not meet the minimum standards and are not making significant efforts to bring themselves into compliance.

A total of 23 countries were placed in the third tier: Albania, Bahrain, Belarus, Bosnia-Herzegovina, Burma, Democratic Republic of Congo, Gabon, Greece, Indonesia, Israel, Kazakhstan, Lebanon, Malaysia, Pakistan, Qatar, Romania, Russia, Saudi Arabia, South Korea, Sudan, Turkey, United Arab Emirates and the Federal Republic of Yugoslavia.

If these or other countries are still in tier three when the 2003 report is issued, they may be subject to certain sanctions. Such sanctions would include the termination of non-humanitarian, non-trade related assistance. The US may also oppose loans from international financial institutions such as the International Monetary Fund and the World Bank. The report states that sanctions could be waived in certain circumstances, such as "a national interest determined by the President".