The report, which covers the period April 2004 and March 2005, lists Croatia among the countries which have intensified efforts in combating trafficking, as opposed to last year's report, which listed it among those under special observation.
"During the reporting period, Croatia began to intensify efforts to combat trafficking in persons and took nascent steps to improve its response to trafficking," the State Department said in its fifth annual report evaluating how the authorities of 150 countries combat trafficking in humans.
"Croatia expresses satisfaction with the fact that the United States has recognised everything the... Government has done over the past year in combating trafficking in humans," said Tomislav Vidosevic, Assistant Croatian Foreign Affairs and European Integration Minister, who is in Washington.
The report said the government "adopted a national action plan, appointed an anti-trafficking coordinator, and provided direct funds to implement the plan".
"The government implemented targeted law enforcement training and increased its capacity to identify and assist victims," said the report.
"In October 2004, the Government of Croatia enacted legislation that specifically prohibits and punishes trafficking in persons offenses, providing for penalties from one to ten years" imprisonment," the report said, adding "the government reported 17 investigations and four convictions in 2004".
Vidosevic said that Croatia would continue with intensive cooperation with the countries in Southeast Europe, the European Union and notably the US.
The report divides countries into three tiers. The first includes countries fully meeting the minimum US standards.
Croatia is in the second and largest tier, which comprises countries which do not fully meet the standards, but invest considerable effort to achieve them.
The third tier comprises countries which do not meet the minimum standards and make no effort to achieve them.