In its annual report released Wednesday, the U.S. State Department has ranked South Korea as a government complying fully with U.S. laws against human trafficking.

The 2003 "Human Trafficking Report" placed South Korea in Tier 1 as a country making significant efforts against the practice of human trafficking, but placed North Korea in Tier 3 as a nation not complying with the minimum standards and making no efforts to do so.

However, the report also said that South Korea is a source, transit and destination country for women trafficked for sexual exploitation.

According to the report, victims come from Southeast Asia, often entering South Korea on "entertainer" visas but forced into prostitution in bars and private clubs, and South Korean women are trafficked abroad to Japan and the United States.

It said, however, the Seoul government recognizes trafficking as a national problem and has made comprehensive efforts to prevent it, protect the victims and persecute traffickers.

The South Korean government's decision to apply stricter standards in the issuance of 'entertainer' visas is seen as a positive move, and will require further monitoring.