KUALA LUMPUR: Countries in Tier-3 may be subjected to certain restrictions on foreign assistance, whereby the US President may decide to not provide the country's assistance to Tier-3 countries, as prescribed by the US Trafficking Victims Protection Act (TVPA).
The US President may also instruct the US Executive Director of multilateral development banks and the International Monetary Fund to vote against and use their best efforts to deny loans to a Tier-3 country.
"However, it does seem that these sanctions do not apply to aid or funding for humanitarian, trade-related and certain developments – thus limiting the punitive extent of these measures. "Still, the reputational risk and its possible resulting consequences should be enough of a reason for countries to try and avoid being in Tier-3," HLIB Research said.
HLIB Research said foreign companies, such as multinational corporations, may voluntarily choose not to source their inputs from Tier-3 countries.
This is especially from industries that have been linked to human trafficking, in the case of Malaysia, past Trafficking in Persons (TIP) reports have flagged the palm oil and disposable glove industry.
Alternatively, HLIB Research said the President could also waive these restrictions on Tier-3 countries.
This would apply if the provision of such assistance promotes the purposes of the TVPA, or is in the national interest of the US, or is necessary to avoid significant adverse effects on vulnerable populations, including females and children.