The new report, obtained by the UK’s Financial Times, says despite "considerable progress" in reducing financing for such groups, businesses and charities with links to al-Qaida continue to operate around the world.

"Al-Qaida, the Taliban, and those associated with the network are still able to obtain, solicit, collect, transfer and distribute considerable sums," the report was quoted as saying on Friday.

The UN official in New York responsible for the study was not immediately available for comment.

The news will come as a blow to US-led efforts to cut off financial support for the main target in the Bush administration’s so-called war on terror.

However, security analysts told Aljazeera.net they were unsurprised by the study’s findings. A Middle East analyst at Jane’s Sentinel Security Assessments in London, Jeremy Binney, said trying to stem the flow of illegal funds was practically impossible.

“Look at organised crime in the West,” said Binney, “it’s virtually impossible to do. If you block off one avenue, another one will spring up.”

'Terrorist financiers' at large

The report highlights the activities of Yusuf Nada and Idris Nasir al-Din, directors of financial group al-Taqwa. The US says the group has been al-Qaida’s most important fund-raising source.

Al-Qaida attack in Saudi Arabia
on 8 November left 17 dead

The UN report is quoted as saying the two men continue to hold business interests and property in Italy and Switzerland, even though they have been labelled as “terrorist financiers”.

Nada managed to defy a UN travel ban when he visited Liechtenstein in January, the paper reported.

Cases such as that of the al-Taqwa directors "reflect continued serious weaknesses regarding the control of business activities and assets other than bank accounts," the report says.

The directors have previously dismissed the allegations against them as “nonsense”.

In addition, the arms embargo against al-Qaida often appeared "totally ineffective" and needed to be "completely revamped".

Lack of cooperation

Countries are supposed to give names of individuals and organisations linked to al-Qaida and the Taliban to a special UN committee, which adds them to a list of names subject to a travel ban, an asset freeze and an arms embargo.

But the chairman of the UN committee warned this week only 84 UN countries had shown cooperation in enforcing the sanctions.

Heraldo Munoz complained only 372 names had been put on the list. Yet, more than ten times that number have been arrested in 102 countries on suspicion of having links al-Qaida.

Binney told Aljazeera.net some countries were reluctant to release details of their investigations and arrests to protect the nature of their own intelligence. “Information is power,” he said.

The report adds that operations by charities suspected of financing al-Qaida are difficult to control because of the organisations’ involvement in genuine humanitarian work.