(Adds quote from U.S. diplomat who oversaw writing of report)
By Jonathan Landay
WASHINGTON, June 20 (Reuters) - The U.S. State Department's annual human trafficking report released on Thursday demoted Saudi Arabia and Cuba to countries that failed to meet minimum U.S. anti-trafficking standards.
The report also dropped a warning from the 2018 issue that traffickers prey on children separated from their parents. Policies implemented by the administration of U.S. President Donald Trump resulted in the separation of thousands of migrant children from their families.
Secretary of State Mike Pompeo and Ivanka Trump, a top adviser to her father, released the 2019 Trafficking in Persons report at a State Department ceremony at which Pompeo called human trafficking "a stain ... on all of humanity."
Saudi Arabia and Cuba were downgraded to countries that have failed to make significant anti-trafficking efforts after both were kept on a watchlist for four years, said the report.
In his remarks, Pompeo pointed to Cuba's demotion to Tier 3 - the worst ranking the report can give a country - and noted that it joined Iran, China, North Korea, Venezuela, Syria and Russia.
He did not mention, however, the demotion of oil-rich Saudi Arabia, a major U.S. ally and arms buyer.
Some lawmakers and human rights advocates have already questioned the report's objectivity after Reuters disclosed on Tuesday that Pompeo declined to place Saudi Arabia on a list of countries that recruit child soldiers, dismissing his own experts' findings that a Saudi-led coalition uses under-aged fighters in Yemen.
John Cotton Richmond, the ambassador-at-large who oversaw the writing of the report and whose office recommended the kingdom be placed on the child soldiers list, told reporters on Thursday afternoon that Pompeo determined that Saudi Arabia "did not rise to the level to warrant a listing."
Yet the trafficking report's section on Saudi Arabia cited numerous reports of the Saudi-led coalition recruiting Sudanese and Yemeni children to fight Houthi rebels. The coalition denies using child soldiers.
Inclusion on Tier 3 can bring restrictions on U.S. non-humanitarian, non-trade-related assistance, a decision made by the president, who limited aid to 22 countries listed in that category last year. But it is unlikely that Trump will act against Saudi Arabia amid rising tensions between the United States and the kingdom's regional rival, Iran.
The United States provides no aid to Cuba's Communist government. Its placement in Tier 3 comes as the Trump administration rolls back the detente that occurred under former President Barack Obama.
The 2019 report also dropped a section included in last year's document that warned against removing children from their families because they can become vulnerable to trafficking.
"The physical and psychological effects of staying in residential institutions, combined with societal isolation and often subpar regulatory oversight by governments, place these children in situations of heightened vulnerability to human trafficking," the 2018 report said.
The U.S. section of this year's report made no mention of the separation of more than 2,700 children from migrant families who illegally crossed the U.S.-Mexico border, and the children's placement in government custody.
The separations, which occurred during the period covered by the report, were implemented under a "zero tolerance" policy on illegal immigration that subjected parents to criminal charges.
Trump rescinded the separation policy in June 2018 amid international outcry.
Judith Kelley, dean of Duke University's Sanford School of Public Policy and author of a book on the trafficking report's impact, said Trump's child separation policy should have been cited.
But its exclusion should not diminish the extent of U.S. anti-trafficking efforts or the impetus the report gives other countries to improve their ratings, she added.
(Reporting by Jonathan Landay; Editing by Lisa Shumaker)
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