In the TIP Report, the Department of State places each country onto one of three tiers based on the extent of their governments’ efforts to comply with the "minimum standards for the elimination of trafficking" found in Section 108 of the TVPA. While Tier 1 is the highest ranking, it does not mean that a country has no human trafficking problem. On the contrary, a Tier 1 ranking indicates that a government has acknowledged the existence of human trafficking, made efforts to address the problem, and complies with the TVPA’s minimum standards. Each year, governments need to demonstrate appreciable progress in combating trafficking to maintain a Tier 1 ranking.
More information about the report is available in this briefing. Previous editions are available via my Researching Forced Migration wiki.