WASHINGTON (Reuters) - The United States accused its Arab allies Bahrain, Kuwait, Oman and Qatar on Tuesday of being among the world’s worst offenders in failing to prevent people from being sold into the sex trade and servitude.

An unidentified girl, former sex slave, looks out in a shelter in this November 30, 2006 file picture. The United States accused its Arab allies Bahrain, Kuwait, Oman and Qatar on Tuesday of being among the world's worst offenders in permitting the sale of people into the sex trade and indentured servitude. REUTERS/Bogdan Cristel

In its annual report on human trafficking, the U.S. State Department added the four to its list of 16 countries subject to possible sanctions, including the loss of U.S. aid and U.S. support for World Bank and International Monetary Fund loans.

Algeria, Equatorial Guinea and Malaysia were also added to the bottom -- Tier 3 -- ranking of countries that failed to meet minimum U.S. standards on combating human trafficking or of making significant efforts to improve their record.

The others in this category were Cuba, Iran, Myanmar, North Korea, Saudi Arabia, Sudan, Syria, Uzbekistan and Venezuela.

Under U.S. law, these countries have 90 days to improve their records or face sanctions. The Bush administration can choose not to impose sanctions if it wishes.

In presenting the report, U.S. Ambassador Mark Lagon told reporters it was “especially disappointing” that many of the countries that slid into the lowest ranking were rich Middle Eastern nations that have the money to combat the problem.

He noted that Saudi Arabia is on the bottom rung for the third year in a row.

The annual “Trafficking in Persons Report,” documents cases of girls sold into prostitution, boys compelled to become child soldiers, and adults and children forced to work on fishing boats that stay at sea for years, leaving them unable to escape and vulnerable to disease, starvation and physical abuse.

The United States estimates 800,000 people are trafficked across international borders each year, roughly 80 percent of them women and girls and as many as half of the total minors.

POLITICAL FACTORS?

Rights groups say such U.S. blacklists sometimes appear politically motivated.

Friendly countries with major trafficking problems such as India were not placed in the worst category, where U.S. antagonists like Syria, North Korea, Cuba and Venezuela routinely appear.

The report includes three other categories: Tier 1 for nations that meet minimum U.S. standards; Tier 2 for those that are making significant efforts to do so, and Tier 2 “Special Watch List” for those that deserve special scrutiny.

Rep. Chris Smith, a New Jersey Republican who helped write the law mandating the report, said too many countries -- 32 of them this year -- are being placed on the “Special Watch List” rather than being put in the lowest category.

“We believe it is being misused to park certain countries like India, which the record clearly indicates ought to be on Tier 3,” he said in an interview, saying he was considering amending the law to bar countries from being on the watchlist for more than three years.

Lagon denied any political motivation and noted Zimbabwe, which has a poor relationship with the United States, escaped the Tier 3 ranking. He also noted improvements by Georgia, Hungary and Slovenia, which rose to “Tier 1” this year.

Last year the report for the first time acknowledged that the United States had paid contractors in Iraq who were later found to have abused laborers hired from abroad.

The report criticized Iraq’s government for failing to prosecute any trafficking cases, to protect victims or to take steps to prevent abuses “despite reports of a growing labor trafficking problem among women and foreign nationals.”

Iraq is not ranked in the report because of the turmoil its government faces in trying to quell the insurgency that erupted after the 2003 U.S.-led invasion that toppled Saddam Hussein.