The US State Department has issued its annual Trafficking in Persons Report. Presented by Secretary of State John Kerry, the report downgraded Myanmar while upgrading Thailand.
The US State Department has placed Myanmar, Uzbekistan, Haiti and Sudan on its list of worst human trafficking offenders on Thursday.
The move drew praise from human rights groups following criticism that last year's Trafficking In Persons (TIP) Report was biased.
The annual report that examined 188 countries' efforts to fight the $150 billiion human trafficking industry was released by Secretary of State John Kerry.
Whilst presenting the report Kerry said, "When we talk about human trafficking, we're talking about slavery – modern-day slavery that still today claims more than 20 million victims…"
Myanmar was downgraded to "tier 3" the lowest tier, which can trigger sanctions, although presidents usually forego such action.
The 2016 State Department report noted that people across Myanmar are subject to exploitation, but stressed that the Rohingya, a stateless Muslim minority, are "particularly vulnerable to sex and labor trafficking in Rakhine State, including forced labor perpetrated by government authorities".
The country's denial of legal status to Rohingya contributed to the group's vulnerability to trafficking.
Rohingya are the world's most persecuted ethnic minority group, according to the UN.
Since 2012, communal violence between ethnic Buddhists and Muslims in Rakhine state has killed approximately 57 Muslims and 31 Buddhists while approximately 100,000 people have been displaced in camps and more than 2,500 houses burned -- most of which belonged to Rohingya.
Tens of thousands of Rohingya have been relegated to squalid displacement camps ever since religious violence erupted in their Buddhist-majority state in 2012.
Scores have fled the troubled region on rickety boats bound for Muslim-majority Malaysia.
Years of poverty and corruption under Myanmar's former military ruler have made the Southeast Asian nation a cesspool of forced labour and sex trafficking.
Democracy activist Aung San Suu Kyi is now leading Myanmar's first civilian government in nearly half a century, a move Washington has been eager to support, consequently lifting a host of financial and trade embargoes last month.
In the TIP report Thailand was upgraded to Tier 2 after spending two years in the lowest category--a move welcomed by the country's military junta but criticised as premature by human rights groups.
An unprecedented Thai crackdown last year saw more than 90 alleged traffickers arrested and has slowed the tide of dangerous sea crossings.
Currently, 27 countries are listed under Tier 3: the bottom tier. President Barack Obama has 90 days to decide whether to impose sanctions on those countries.