Coca-Cola at a crossroads with new CEO in chargeAs new CEO James.docx

Coca-Cola at a crossroads with new CEO in charge
As new CEO James Quincey takes over from the outgoing
Muhtar Kent, he faces challenges that have turned Buffett's
aphorism into a painful reminder of better days.
By Russell Grantham Atlanta Journal-Constitution
May 7, 2017
ATLANTA – Legendary investor Warren Buffett once was
quoted as saying Coca-Cola was such a strong company that a
ham sandwich could run it.
As new CEO James Quincey takes over from the outgoing
Muhtar Kent, he faces challenges that have turned Buffett’s
aphorism into a painful reminder of better days.
The Atlanta company is still hugely profitable, but increasingly
under pressure. Soda sales stalled, and its core Coke brand
slipped in the U.S. market as people cut back on sweet,
fattening drinks in recent years. The beverage market is more
fragmented, with new choices constantly materializing. Coke is
pushing to broaden its lineup with non-fizzy brands, but its
lifeblood remains soda.
Behind its perpetually sunny marketing facade, Coke in recent
years has spent enormous corporate energy rearranging
internally and retooling operations to deal with new
marketplace realities.
Onto the stage now steps Quincey, a British-born, 21-year Coke
veteran who is expected to bring new ideas and vitality.
His tenure didn’t start quietly. On Tuesday, in what was
essentially his first act as CEO, Quincey used an earnings call
with financial analysts to announce job cuts that will hit the
headquarters staff in Atlanta hard.
The company plans to eliminate 1,200 jobs later this year from
a pool of 5,500 corporate positions. The cuts are part of a plan
to save about $800 million through 2019.
Quincey said the cuts are “clearly a painful process,” but

necessary. He said job decisions will be made “as fairly as
possible,” but also with “speed.”
“People don’t want this to linger on,” he said in an interview.
Quincey said the plan is to use about half of the savings to
speed investment in new products and marketing, and to restore
Coke’s revenue and profit growth to 4 to 6 percent per year.
“There’s an acceleration we’d like to see,” Quincey said. “I
don’t think we’re broken, but I don’t think we’re where we need
to be.”
While soda sales are an obvious sore spot, they aren’t Coke’s
only issue. Assessing the company’s fortunes from the outside
has been complicated in recent years by an overhaul of bottling
operations.
In 2010 Coke bought North American bottling operations from
partner Coca-Cola Enterprises. It did the same with hundreds of
bottlers around the world. Coke for a time took control of the
operations, significantly enlarging the company. Now it’s
spinning them back out to new partners.
Coke’s revenue has slipped for the past four years — from $48
billion in 2012 to $41.9 billion last year — in part because of
the accordion effect of the bottling overhaul.
The 130-year-old company’s star has also faded a bit in other
ways.
In 2007, Coca-Cola was the most valuable brand in the world,
according to London consulting firm Brand Finance, which
ranks brand values annually, based on its own calculations. Now
it’s 16th in the U.S. and 27th in the world, according to the
firm’s latest list, well behind companies like Google, Apple and
Amazon.com.
Born in London, Quincey spent part of his youth in Hanover,
N.H., where his father lectured at Dartmouth.
Quincey earned his degree from the University of Liverpool but
decided he was better at business than engineering. He joined
giant consulting firm Bain, which eventually led to a job at
Coke.
Quincey, who is fluent in Spanish, spent much of his Coke

career in Europe and Latin America.
The biggest of the company’s problems is that people are simply
less likely to reach for a soda than in the past, and there’s little
indication that the trend is fleeting.
Coca-Cola’s “megabrand” sales volume — Coke and its variants
— fell almost 5 percent over the past three years in the U.S. and
were down almost 1 percent worldwide, according to company
filings to the U.S. Securities and Exchange Commission. Those
core brands account for nearly half of sales volume.
The decline is partly due to health concerns that sugary drinks
contribute to obesity and diabetes.
But more than soda politics are at work. Consumer tastes are
shifting toward new products, experts say. They are being
supplied by competitors popping up all over, they say, because
it’s getting easier for small companies to launch new drinks and
get them into markets.
This more fragmented market is requiring Coke to shift from its
“have a Coke” mind-set to a fast-moving, portfolio approach to
the market.
Gold Peak tea, launched about a decade ago by Coke, passed $1
billion in annual revenue about four years ago, and is now the
No. 3 tea brand in the U.S. Another, Smartwater, is the result of
Coke’s $4 billion-plus Glaceau acquisition in 2007, while
Dunkin’ Donuts Iced Coffee is a recent rollout from a joint deal
with that company.
One dud: an ill-fated 2015 venture with Keurig to market a
single-serve soda dispenser called Keurig Kold. Kent called it a
“game-changer,” but the machine bombed and was discontinued
within months.
Quincey expects that by 2019 the fruits of Coke’s rejuvenation
efforts will be more obvious.
“Those that are willing to crunch the numbers can see it now,”
he said.
2
Case Study

Students will read chapter 6 of the Edward Alden text, The
Closing of the American Border.
Upon completion of the weekly Alden chapter reading
assignment, students will then submit a one-page summation,
outlining the chapter. The summations should concentrate on
thepolitical, cultural, ethnic and religious implications of this
effort. The summation should also cover the student's personal
observations of successes and/or failures of America's efforts to
secure its border pre & post 9/11.
The weekly summation will not require formatting or
references, but points will be taken off for lack of content,
grammatical errors and/or for a late submission. The weekly
chapter summation will be worth 25 points each week, for a
total of 175 points (the final chapter of the Alden book will be
included in the final exam). Note that on week 8 of the course,
students will use information from their submissions from The
Closing of the American Border case studies as building
points for their final exam.
CHAPTER 6 READING
Chapter Six
For the purpose of this chapter, students need to understand the
following definitions:
Contraband is all commerce that is carried on contrary to the
laws of the state. If the country you live in has a manufacturing

base then protecting those industries by limiting competition
becomes important from both economic and political
perspectives. Competing products or lower quality products
produced at a lower price will undercut the foundation of the
economic base as people will naturally tend to buy the less
expensive item. This will reduce the demand for your existing
production and subsequently reduce manufacturing output.
Smuggling is the criminal offense of bringing into, or removing
from, a country those items that are prohibited or upon which
customs or excise duties have not been paid. When a person,
intentionally or unintentionally has in their possession goods
the state has determined to be prohibited they can be convicted
of smuggling. Any person who is guilty of knowingly
smuggling any goods that are prohibited by law can be charged
with smuggling and be assessed civil penalties. Not only can the
government seize the merchandise, any vessel or vehicle used to
transport the contraband can also be taken under forfeiture
proceedings. To circumvent the prohibitions against importing
contraband into a country the smuggler has traditionally used
two methods. One is to simply avoid entering a country at a
regular border crossing. The other is to conceal the contraband
in a conveyance and hope it remains undetected when passing
through a regulated port of entry.
Antidumping (AD) and Counterfailing (CVD)duties are
additional duties that may be assessed on imported goods
intended for sale in the United States at abnormally low prices.
These low prices are the result of unfair foreign trade practices
that give some imports an unearned advantage over competing
U.S. goods.
Those who willfully worked to circumvent the high duties and
taxes levied on imports and exports reap not only high profits,
but also the respect and admiration of their fellow smugglers
and the communities that benefited from the trade. During the
pre-drug smuggling and human trafficking days the purpose of
smuggling was to circumvent the established trade policies of
governments. Smuggling is simply an illegal form of the

import/export business. Smuggling is not a Western
phenomenon, but has a truly global flavor.
In the west, the islands of Great Britain saw much smuggling to
and from mainland Europe between 1300 CE and the twentieth
century. The 18th century saw a remarkable increase in the
amount of smuggling across England’s coasts, growing into a
sizable industry that siphoned money abroad and channeled
huge volumes of contraband into southern England. The
increase in smuggling activities in Great Britain during the 18th
and 19th centuries was the direct result of punitive taxation
implemented to pay for a series of costly wars on the Continent
and in the Americas.
In North America there was also an ongoing smuggling venture.
The Treaty of Utrecht in 1713 supposedly settled the
boundaries of France and Great Britain. Unfortunately, the
Treaty failed to address several issues of boundaries with Spain.
The result was while, by treaty, the British were allowed to
supply Spain’s American empire with slaves and one annual
shipload of goods, the British South Seas Company shamefully
abused the privilege by constantly restocking its vessel with
fresh goods and sending it back to Spain’s new world
possessions (Encyclopedia Britannic, 2016).
After American independence in 1783, smuggling developed at
the edges of the United States at places like Passamaquoddy
Bay, St. Mary’s in Georgia, Lake Champlain, and Louisiana.
During Thomas Jefferson’s embargo of 1807–1809, these same
places became the primary locations where goods were
smuggled out of the nation in defiance of the law. The
Prohibition Era saw a revival in smuggling and following the
repeal of the Eighteenth Amendment to the Constitution by the
Twenty-first Amendment, smugglers turned to drug smuggling,
which developed into a major issue for the U.S. by 1970.
Anytime a restriction is placed on import or export of goods to
or from a certain country, smugglers will take advantage of the
situation.
Similarly, as sanctions were placed on Iran in an attempt to

drive the country into a situation where it would give up a
perceived quest for nuclear weapons, a massive trucking
industry rose in Iraq, shipping oil and gasoline into Iran.
In modern times, as many first-world countries have struggled
to contain a rising influx of immigrants, the smuggling of
people across national borders has become a lucrative extra-
legal activity. The dark side, human-trafficking, has become
concerning for the world community, especially the trafficking
of women who may be enslaved, typically as prostitutes.
Countries have established a large number of regulatory
agencies to address virtually every type of commodity. The
same system is instituted for exported items. In order to import
into the United States a Guide for Commercial Importers
provides a reference of materials and conventions that importers
have to comply with should they desire to bring items to the
U.S. When consulting this list it becomes obvious why some
people simply choose not to go through the paperwork
necessary to legally import their products. For many
manufacturers it would be less costly to lose a load of product
(while trying to smuggle it in) than to comply with the legal
requirements for importation (CBP, 2006).
The Guide also provides a list and contact information of thirty-
seven federal agencies and sub-agencies with regulatory or
criminal jurisdiction over the various imports that are restricted
or prohibited. If the product being imported comes from a
country that is part of an international trade organization,
convention, or free trade agreement, then each of the various
regulations and statutes associated with the product being
imported must also comply with the mandates of those
agreements and treaties. A short list of free trade agreements
are listed in the 2006 CBP publication Importing to the United
States: A Guide for Commercial Importers (CBP, 2006).
While the laws on importation and exportation may be exacting,
once an importer or exporter establishes a system to comply
with the various regulations, the system does tend to function in
a relatively smooth manner. The primary concern of customs

inspectors then becomes the issue of contraband items
(narcotics, insects and other biological threats to agriculture,
weapons of mass destruction, trafficked humans, and the
dumping of regulated merchandise) being secreted within an
otherwise legal shipment.
Dumping and Anti-Dumping-dumping is the practice of selling
products in the United States at lower prices than those same
products would bring in the producer’s home market or at a
price lower than it cost to manufacture that item. "Subsidizing"
is the practice by some governments of providing financial
assistance to reduce manufacturers’ costs in producing
particular commodities.
Countervailing duties (duty meaning an additional tax on
certain items) may be assessed to “level the playing field”
between domestic and subsidized imported goods. However, to
meet the criteria for assessing antidumping or countervailing
duties, the imported merchandise must, in addition to being
subsidized or sold at less than fair value, also injure a U.S.
industry.
The Department of Commerce, the International Trade
Commission (ITC), and U.S. Customs and Border Protection
each have a role in administering and enforcing antidumping
and countervailing duty laws. The Commerce Department is
responsible for the general administration of these laws.
Commerce determines whether the merchandise is being sold at
less than fair value, whether it has been subsidized, and what
percentage rate of duty will be assessed. The ITC determines
whether the product poses an injury to a particular U.S.
industry. The CBP assesses the actual duties—the amount—
based upon the rate set by the Commerce Department once the
ITC has determined the import injures a particular industry.
In general, the following processes must be completed before
antidumping or countervailing duties are
established:Antidumping and countervailing duty investigations
are initiated by the Commerce Department. A domestic industry
petitions the department, although occasionally the Commerce

Department may also initiate an investigation. If the party
seeking the investigation also wants the ITC to test for injury,
that party must simultaneously file the petition with both the
Commerce Department and with the ITC.If the petition contains
the necessary elements, the Commerce Department and the ITC
will initiate separate investigations that yield preliminary and
final determinations. If appropriate, the Department of
Commerce issues either an antidumping or countervailing duty
order and assesses whatever antidumping or countervailing
duties the investigation determines are appropriate.If a test is
required for injury to a domestic industry, the ITC makes the
determination concerning the likelihood of injury. If that
determination is negative, there will be no further action by the
ITC. If it is affirmative, the Commerce Department issues its
preliminary determination regarding sales (antidumping) or
subsidy (countervailing duties) issues.After additional review
by the Commerce Department issues its final duty
determinations. If either determination (antidumping or
countervailing duties) is affirmative, Commerce directs CBP to
suspend liquidation of entries for the merchandise subject to the
investigation and to require cash deposits or bonds equal to the
amount of the estimated dumping margin (the differential
between the fair market value and the U.S. price) or the net
subsidy.The ITC follows with its final injury determination. If
this determination is also affirmative, Commerce issues an
antidumping or countervailing duty order. At that time,
Commerce directs CBP to collect cash deposits of estimated
duties.A negative final determination either by Commerce or the
ITC would terminate the investigations and that termination
would remain final for this particular inquiry. Both agencies
announce their determinations, including orders and the results
of the administration reviews in the Federal Register.
Throughout history one problem with measuring smuggling has
been the only accurate numbers governments have to work with
are the people who are caught. Smuggling is big business and
the profits are considerable. There is one major change being

experienced in the smuggling of contraband that has become
problematic in the U.S. Illegal migrants are now being coerced
by the Mexican drug cartels into being "drug mules" (humans
carrying drugs across the border) in partial payment for being
allowed to cross certain areas of Mexico, or for coyotes (human
smugglers that cross migrants over the U.S. border) to guide
them across remote areas of the Southwest. This creates a
situation where the illegal migrant is now no longer considered
a person returnable to their country of origin, but drug
traffickers subject to long prison sentences if caught. As
always, smugglers will shift their efforts from one location to
another based on the interdiction efforts of the violated country.
The products CBP officers work to prevent from entering the
United States are those that would injure community health,
public safety, American workers, children, or domestic plant
and animal life, or those that would defeat national interests.
Sometimes the products that cause injury may seem fairly
innocent. But, as is identified in the descriptive information on
the CBP website, appearances can be deceiving.
On an international scale there are other major smuggling
concerns. The trafficking of endangered species is of particular
importance, particularly elephant ivory and rhinoceros horn.
Traditional Chinese medicine touts rhinoceros horn as a cure
for fevers and seizures. This has created a situation where
poachers kill rhinos for their horns. Another animal nearly
driven to extinction is the African Elephant. Elephant tusks are
ivory and are highly prized as decorative pieces. The primary
demand is in China, where artisans create some of the most
beautiful carved works. The demand for these carved works has
resulted in an increase of elephant poaching, which has
decimated many of the herds throughout Africa.
Smuggling is also a major concern for the countries of the
European Union. In the economic downturn from 2008 to 2012
there was a significant increase in the smuggling of cigarettes
and other tobacco products into the EU. In Slovakia the police
discovered a 2,300-foot long underground tunnel under the

border with neighboring Ukraine. The tunnel had its own rail
system and was quite sophisticated in construction. The tunnel
contributed to the loss of upwards of 50 million euros ($60
million) in tobacco taxes.
High taxation is the fundamental issue driving smuggling into
the European Union. Member countries are required to tax
certain products at rates so high that purchasing the same
product in a non-member country offers not only a cost savings
to the purchaser, but the opportunity to sell that product in the
EU country for a considerable profit as part of the underground
economy or “black market.” A clear example is the issue of
gasoline smuggling in the EU countries of Latvia and Estonia,
which border Russia. Around 12 million liters of cheap Russian
gasoline is smuggled into Estonia every year, resulting in a loss
of 5.8 million euros in tax revenue annually (Newsdesk, 2012).
Another modern smuggling issue is the one of guns into
Mexico. The Mexican government requested United States
Bureau of Alcohol, Tobacco, Firearms, and Explosives
(BATFE) traces on 99,691 firearms between January 1, 2007,
and December 31, 2011. Of those that could be traced, about
68% originate in the U.S. Interestingly, between January 2007
and December 2011, only 27,825 (27.9%) of the requested
traces could be traced to private sales in the U.S (Winter, 2012).
The rest came from unknown sources or other countries. The
majority of the firearms they acquire are “diverted” from
official shipments to the Mexican government by corrupt
officials and cartel members (UNODC, 2010). It was these
earlier tracing efforts that led to the Fast and Furious program
by the BATFE to allow the sale of firearms to persons
prohibited from owning firearms in an attempt to trace the guns
to the cartel leadership. Not only was Fast and Furious a
failure, not a single cartel leader has ever been tied to one of
the sold firearms, but several of the firearms have shown up on
crime scenes where U.S. federal law enforcement agents were
killed. Part of the fallout over Fast and Furious was the U.S.
House of Representatives holding U.S. Attorney General Eric

Holder in contempt of Congress, for his failure to turn over
documents requested by a Congressional committee. This was
the first ever move by Congress against a sitting Cabinet
official.
Narcotics smuggling is another highly profitable enterprise.
Drug smuggling has an impact on every country involved, from
point of origin to the end consumer. The UNODC reported in
2008 the worldwide consumption of heroin reached 340 tons
(UNODC, 2008). Another major issue associated with
smuggling is the trafficking of humans. Worldwide humans are
trafficked for labor, as forced brides, and for sex. The
traffickers do not discriminate by age, gender, or race and
virtually every country has some form of modern slavery.
Smuggling has been occurring since humans established import
and export restrictions or taxed goods sold in any city or state.
Smugglers take advantage of the profit potential that results
when countries try to restrict the free exchange of commodities
based on market values. Laws and other regulations are
instituted to protect domestic manufacturing interests, safety of
the population, and for reasons of political policy to help or
hinder economics in other countries. Much of the worldwide
smuggling effort is tied to attempts to circumvent high taxes on
certain commodities or to supply a demand for illicit products,
such as narcotics. Anything of value can be declared
contraband by a country for any number of reasons. We really
do not know the extent of smuggling of any given product
anywhere in the world. It is only possible to estimate the
quantities of smuggled goods and persons based on what is
actually seized in transit and the corresponding changes in price
for the goods that do get through the gauntlet of agencies
working to prevent smuggling.
Chapter Seven
The Trafficking Victims Protection Act (2000) defines “severe
forms of trafficking in persons” as:Sex trafficking in which a
commercial sex act is induced by force, fraud, or coercion; or in
which the person induced to perform such an act has not

attained 18 years of age; or,The recruitment, harboring,
transportation, provision, or obtaining of a person for labor or
services, through the use of force, fraud, or coercion for the
purpose of subjection to involuntary servitude, peonage, debt
bondage, or slavery. A victim need not be physically
transported from one location to another in order for the crime
to fall within these definitions (106th Congress, 2000).
The root causes of human trafficking include poverty, lack of
employment, and an inefficient system of labor migration. The
United Nations report on trafficking in persons (2006) notes
most trafficking cases follow a similar pattern: people are
abducted or recruited in their home country of origin and then
transferred either voluntarily or involuntarily through various
intermediate countries to the destination country. At the global
level, human trafficking for sexual exploitation is reported more
frequently than trafficking for forced labor. The primary
discussion around human trafficking has concerned itself with
the issue of trafficking for sexual exploitation. In most cases,
the issue of trafficking for labor has simply not been viewed as
a significant issue in many countries (UNODC, 2006).
The full extent of the global trafficking problems is complex
and difficult to describe. The 2012 U.S. State Department
Report, Trafficking in Persons, reveals over 120 of the world’s
countries have embarked to legislate human rights issues to
control trafficking. To this point the efforts to control it have
been relatively ineffective and inefficient (US Department of
State, 2012).
Laws-there are several types of legislation that specifically
refer to human trafficking. These include:the Trafficking
Victims Protection Act (TVPA) of 2000, 2003, 2005, 2007, and
2013 (U.S. law),the Child Soldiers Prevention Act (CSPA) of
2008 (U.S. law),and the Protocol to Prevent, Suppress and
Punish Trafficking in Persons, Especially Women and Children
(also referred to as the Trafficking Protocol, the Palermo
Protocol, or the UN TIP Protocol, adopted by the United
Nations in Palermo, Italy, in 2000).the Palermo protocols are

protocols that were adopted by the U.N. to supplement the
2000 Convention against Transnational Organized Crime. The
protocols include:the Protocol to Prevent, Suppress and Punish
Trafficking in Persons, especially Women and Children;
andthe Protocol against the Smuggling of Migrants by Land, Sea
and Air.the Protocol against the Illicit Manufacturing and
Trafficking in Firearms, Their Parts and Components and
Ammunition
The 2011 Trafficking in Persons (TIP) Report notes
globalization has impacted not only economics transnationally,
but also human trafficking. The end of the Cold War resulted in
a rise in the number of refugees, including many who became
victims of trafficking. An umbrella term, trafficking in persons
implies activities involved when one person obtains or holds
another person in compelled service. The “compelled service”
can be defined in several ways, including involuntary servitude,
slavery, debt bondage and forced labor.
Forced Labor-also known as involuntary servitude, results when
unscrupulous employers exploit workers made more vulnerable
by high rates of unemployment, poverty, crime, discrimination,
corruption, political conflict, or cultural acceptance of the
practice. Immigrants are particularly vulnerable, but
individuals also may be forced into labor in their own countries.
Female victims of forced labor, especially women and girls in
domestic servitude, are often sexually exploited as well.
Sex Trafficking-when an adult is coerced, forced, or deceived
into prostitution that person is a victim of trafficking. All of
those involved in recruiting, transporting, harboring, receiving
or obtaining the person for that purpose are committing a
trafficking crime. This includes those who purchase the
“services” of the victim. Sex trafficking can occur within debt
bondage, as females are forced to continue in prostitution
through the use of unlawful “debt” purportedly incurred through
their transportation, recruitment, or even their crude “sale”
which exploiters insist they must pay off before they can be
free. It is critical to understand a person’s initial consent to

participate in prostitution is not legally determinative. If
thereafter they are held in service through psychological
manipulation or physical force, they are trafficking victims and
should receive benefits outlined in the Palermo Protocol and
applicable domestic laws.
Debt Bondage-often referred to as “bonded labor” or “debt
bondage,” the practice has long been prohibited under United
States law by the term peonage and the Palermo Protocol
requires its criminalization as a form of trafficking in persons.
Debt Bondage Among Migrant Laborers-abuses of contracts and
hazardous conditions of employment for migrant laborers do not
necessarily constitute human trafficking. However, the
imposition of illegal costs and debts on these laborers in the
source country can contribute to a situation of debt bondage.
Domestic Servitude-a unique form of forced labor is the
involuntary servitude of domestic workers, whose workplaces
are informal, connected to their off-duty living quarters and not
often shared with other workers. The problem of forced
domestic servitude, a form of modern slavery, is an issue even
within the United States.
Forced Child Labor-a child can be a victim of human trafficking
regardless of the location of that nonconsensual exploitation.
Indicators of possible forced labor of a child include situations
in which the child appears to be in the custody of a non-family
member who has the child perform work that financially
benefits someone outside the child’s family and does not offer
the child the option of leaving. The Fair Labor Standards Act
(FLSA) sets a minimum age of 14 for most employment in non-
hazardous, non-agricultural industries, but it limits the times of
day and the number of hours 14 and 15-year-olds may work and
the tasks they may perform. The FLSA establishes an 18-year
minimum age for non-agricultural occupations the Secretary of
Labor declares to be particularly hazardous or detrimental to
children’s health or well-being. The Bureau of Labor, Wage
and Health Division (WHD), carries out investigations of the
FLSA’s child labor provisions. Complaints from the public

about child labor are given the highest priority within the
agency (U.S. Department of Labor, 2014).
Child Soldiers-child soldiering is a manifestation of human
trafficking when it involves the forced and unlawful recruitment
or use of children as combatants or for labor or sexual
exploitation by armed forces. Perpetrators may be government
forces, paramilitary organizations, or rebel groups. Many
children are forcibly abducted to be used as combatants. Others
are unlawfully made to work as porters, cooks, guards, servants,
messengers, or spies. Young girls can be forced to marry or
have sex with male combatants.
Child Sex Trafficking-UNICEF reports as many as two million
children each year are subjected to prostitution in the global
commercial sex trade (The United Nations Children's
Emergency Fund, 2006). Sex trafficking has devastating
consequences for minors, including long-lasting physical and
psychological trauma, disease, drug addiction, unwanted
pregnancy, malnutrition, social ostracism, and death. Experts,
prosecutors and academics all say the same thing: that the crime
is difficult to detect, and even more difficult to measure
accurately. Kevin Bales, author of the book Disposable People:
New Slavery in the Global Economy, says there are important
things that distinguish it from a traditional means of slavery:
there is no paperwork to prove ownership of the slave; there is a
low cost of acquisitions relative to a high rate of returns; and a
constant turnover of victims (Beall, 2015).
Human Trafficking Tier Placement-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 (United States Department of
State, 2012).
Tier 1-Tier 1 countries are those whose governments fully
comply with the TVPA’s minimum standards for the elimination
of human trafficking. A country with a Tier 1 ranking
acknowledges a human trafficking problem exists within its

borders, and is currently working toward improving the
problem. The United States is a country with a Tier 1 ranking.
Tier 2-Tier 2 countries are those whose governments do not
fully comply with the TVPA’s minimum standards but are
making significant efforts to bring themselves into compliance
with those standards. Tier 2 includes a watch list and includes
countries whose governments who do not fully comply with the
TVPA’s minimum standards, but are making significant efforts
to bring themselves into compliance with those standards
and:The absolute number of victims of severe forms of
trafficking is very significant or is significantly
increasing;There is a failure to provide evidence of increasing
efforts to combat severe forms of trafficking in persons from
the previous year, including increased investigations,
prosecutions, and convictions of trafficking crimes, increased
assistance to victims, and decreasing evidence of complicity in
severe forms of trafficking by government officials, orThe
determination a country is making significant efforts to bring
itself into compliance with minimum standards was based on
commitments by the country to take additional steps over the
next year.
Tier 3-Countries whose governments do not fully comply with
the minimum standards and are not making significant efforts to
do so. For Tier 3 countries there are penalties. Pursuant to the
TVPA, Tier 3 countries may be subject to certain sanctions,
whereby the United States government may withhold or
withdraw non-humanitarian, non-trade-related foreign
assistance. In addition, Tier 3 countries may not receive
funding for government employees’ participation in educational
and cultural exchange programs. Consistent with the TVPA,
governments subject to sanctions would also face U.S.
opposition to assistance from international financial institutions
such as the International Monetary Fund (IMF) and the World
Bank.
Trafficking in Europe-European countries are examples of
places that have many more jobs than workers, while the

economies of other countries cannot function without slave
labor. Unique social and political as well as economic systems
in Europe actually contribute to the trafficking and migration
problem. Human trafficking proliferated in the final years of
the Soviet period. At first, trafficking victims were primarily
women, but after the dissolution of the USSR, diverse forms of
trafficking developed, facilitated by the rise of organized crime,
the decline of borders, high levels of corruption and the
incapacity of the transitional states to protect their citizens.
Trafficking in Asia-as of 2005 there were 12.3 million victims
of forced labor and of those 9.5 million were in the region of
Asia (ILO, 2005). Both large and small Asian crime
organizations specialize in human trafficking, as opposed to
their counterparts in other regions of the world, which profit
more significantly from drug trafficking. It is difficult, if not
completely impossible, for human trafficking to thrive in a
region without either the covert or overt support of local
officials. All types of human trafficking exist in Asia. Sexual
and labor trafficking predominate, and debt bondage is
pervasive, as well. Not all the children are used for sex; some
are trafficked to other areas of Asia as child soldiers.
Trafficking in the United States- the United States is a major
source country for sex trafficking victims. In addition, many
other forms of trafficking occur among the massive illegal
migrant population. Despite the absence of widespread
corruption and close links between traffickers and state
officials, patterns of American trafficking more closely
resemble those of a developing than a developed country.
Human trafficking is modern-day slavery and a crime against
humanity. Whether voluntarily or involuntarily, people are
being taken advantage of, in heinous ways. The pain and
suffering enacted on these people is simply incalculable and
takes place within the boundaries of every nation on earth.
Only the amount of suffering of each victim differs and the
rationalizations for the abuse on the part of those taking
advantage of the ones being trafficked.

References
106th Congress (2000). The Trafficking Victims Protection Act.
Retrieved from: http://www.state.gov/j/tip/laws/61124.htm
Beall, Jo (2015). Disposable People: New Slavery in the Global
Economy. Kevin Bales. Retrieved
from: http://scholarworks.wmich.edu/cgi/viewcontent.cgi?articl
e=2673&context=jssw
Customs and Border Protection (CBP) (2006). Importing into
the United States A Guide for Commercial Importers. Retrieved
from:
https://www.cbp.gov/sites/default/files/documents/Importing%2
0into%20the%20U.S.pdf
Encyclopedia Britannic (2016). Treaties of Utrecht. Retrieved
from:https://www.britannica.com/topic/treaties-of-Utrecht
International Labor Office (2005). ILO Minimum Estimate of
Forced Labor in the World. Retrieved from:
http://www.ilo.org/wcmsp5/groups/public/@ed_norm/@declarat
ion/documents/publication/wcms_081913.pdf
Newsdesk, Naharnet (2012). Estonia's Petrol Smuggling
Crackdown Slashes Border Traffic. Retrieved from:
http://www.naharnet.com/stories/en/47299
The United Nations Children's Emergency Fund (2006).
Children Out of Sight, Out of Mind, Out of Reach.Retrieved
from: http://www.unicef.org/sowc06/press/release.php
United Nations Office on Drugs and Crime (UNODC) (2010).
Transnational Organized Crime Threat Assessment. Chapter six.
Retrieved from: https://www.unodc.org/documents/data-and-
analysis/tocta/TOCTA_Report_2010_low_res.pdf
Heroin. Chapter five. Retrieved
from: https://www.unodc.org/documents/data-and-
analysis/tocta/5.Heroin.pdf

The United Nations report on trafficking in persons. Retrieved
from:http://www.unodc.org/pdf/traffickinginpersons_report_200
6ver2.pdf
United States Department of Labor (2014). Handy Reference
Guide to the Fair Labor Standards Act. Retrieved from:
https://www.dol.gov/whd/regs/compliance/wh1282.pdf
United States Department of State (2012). Trafficking in
Persons Report. Retrieved from:
http://www.state.gov/documents/organization/192587.pdf
Winter, Michael (2012). ATF says 68K guns recovered in
Mexico traced back to USA. Retrieved from:
http://content.usatoday.com/communities/ondeadline/post/2012/
04/atf-says-68k-guns-recovered-in-mexico-traced-back-to-
usa/1#.V7XUeZgrI2w

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