By Jason Szep, Patricia Zengerle and Matt Spetalnick WASHINGTON (Reuters) - The United States is set to remove Cuba from the list of worst offenders in failing to suppress human trafficking and forced labor, U.S. sources said, removing a longstanding irritant between the former Cold War foes at a time of détente. The upgrade would lift Cuba to the so-called "Tier 2 Watch List" in the State Department's annual Trafficking in Persons report from Tier 3, the lowest rank where it has languished for 12 years due to allegations of sex trafficking and forced labor. The upgrade was contained in a draft report that could be modified by the time of publication, expected this month, said a Congressional aide with knowledge of the report. A second source confirmed the upgrade. The sources requested anonymity. It would come at a diplomatically sensitive time, following the July 1 re-establishment of diplomatic relations, including reopening of embassies in each other's capitals, after more than a half-century of estrangement. "Every time this report is published it has been harshly criticized by Cuba," Gustavo Machin, deputy director of U.S. affairs in the Cuban Foreign Ministry, told reporters in Havana on Thursday. "It is based on falsehoods. We think we have exemplary conduct in the care of boys and girls, the youth, and adolescents.” For years, the U.S. State Department has scathingly criticized Cuba's record in human trafficking. Past U.S. reports have cited allegations of children coerced into prostitution and forced labor in Cuban state-backed overseas’ work missions through a program that sends thousands of Cuban doctors and nurses abroad. "If true, this upgrade in Cuba’s status in the annual report is nothing short of appeasement," U.S. Representative Ileana Ros-Lehtinen, a Florida Republican who opposes stronger ties with Cuba, said in a statement. The State Department declined to confirm the upgrade. “Given that the report is not yet finalized, we will not comment on any specific findings,” said State Department spokesman John Kirby. The White House declined to comment. "POLITICAL EXPEDIENCY" The sources attributed the upgrade to better cooperation between Washington and Havana on human trafficking issues and better treatment of victims. But they declined to provide specifics before the report is published, which usually takes place in June but has been delayed this year. In last year’s report, the United States urged Cuba to criminalize all forms of human trafficking, strengthen training of police in protecting victims, adopt new anti-trafficking policies and “ensure no use of coercion in Cuban work-abroad missions”, among other steps. It is unclear how many of those measures Cuba has taken. More than 50,000 Cuban nurses and doctors have been sent to more than 60 countries in Cuban government-backed missions. The jobs generally are well paid by Cuban standards, and some foreign diplomats in Havana say forced labor allegations appear overblown. But some Cubans have defected from their overseas missions, complaining of difficult work conditions. One area of concern to U.S. authorities has been the absence of laws criminalizing prostitution for minors aged 16 to 18, a legal gray area in Cuba where the age of consent is 16 and where prostitution is permitted. Senator Robert Menendez, a Democrat on the Senate Foreign Relations Committee who is the son of Cuban immigrants, said he suspected any upgrade would be politically motivated. “You have to earn your way up the ladder, not just have political expediency be the reason that you get moved from Tier 3," he said in an interview. Menendez and human rights groups were also highly critical of the State Department’s plans, revealed last week by Reuters, to upgrade Malaysia from Tier 3, a move that could smooth the way for an ambitious U.S.-led free-trade deal with the Southeast Asian nation and 11 other countries. The Malaysian upgrade has not been confirmed by the State Department, which says it is still finalizing the ratings. "Malaysia is a very problematic case ... and should not be let off the hook," Mark Lagon, a former ambassador for the Office to Monitor and Combat Trafficking in Persons that produces the report, testified in Congress on Thursday. The report includes four categories: Tier 1 for nations that meet minimum U.S. standards; Tier 2 for those that are making significant efforts to do so; Tier 2 "Watch List" for those that deserve special scrutiny; and Tier 3 for countries that fail to fully comply with the minimum U.S. standards and are not making significant efforts to do so. Last year there were 23 countries on Tier 3, including North Korea, Syria, Iran and Cuba. Tier 3 countries can face some sanctions. The report was first published in 2001, though Cuba made its first appearance in 2003. (Additional reporting by Daniel Trotta in Havana and Idrees Ali in Washington. Editing by Martin Howell and Ken Wills)
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