Washington, Nov. 11: Two former U. S. Treasury Department officials have come out with a report that suggests that the international system for tracking and cutting off terrorist financing has achieved major successes, but warn that in recent times, a laxity in this endeavour is creeping in.

According to Matthew Levitt and Michael Jacobson, authors of "The Money Trail," U. N. countries have frozen the assets of some 300 al-Qaida and Taliban members after
9/11, and added that by early 2004, 112 countries had ratified an international effort to suppress terrorist financing.

"Few assets are now being frozen and, in fact, many countries still have not put in place the legal framework necessary to take action," the report states, adding that the arms embargo and travel ban against those on the list have not been enforced.

Fox News quotes Levitt and Jacobson as saying in their report that donors from Saudi Arabia are the chief sources of support for al-Qaida extremist groups, while the Iranian government keeps finance Hezbollah, Hamas and other terrorist groups.

The research is intended as a road map for the incoming Obama administration to tighten the system and crack down on evolving terrorist financing schemes.

Levitt and Jacobson are presenting their findings to government agencies, as well as international organizations and think tanks.

Leavitt was a Deputy Assistant Secretary for Intelligence and Analysis in the US Department of Treasury from 2005 to early 2007, while Jacobson worked in the department''s Office of Terrorism and Financial Intelligence.

Both are now at the Washington Institute for Near East Policy. They spent 18 months interviewing government and financial executives around the world before compiling their report.

Foreign governments and banks, the report says, believe their responsibility ends with adhering to the 40 rules and nine recommended practices established by an international finance group after September 11.

Much terrorist cash is funneled through traditional and generally unregulated cash couriers. Carrying vast amounts of cash in and out of Persian Gulf countries is common, and the governments in the region are reluctant to crack down on it, even if they were capable of doing so.

Even the U. S. has been unable to shut down the traditional cash transfer networks, known as hawalas, on its own soil. It is now a criminal offense to operate an unlicensed money remitter in the United States, but just 20 percent of the country''s money services bureaus have registered, according to State Department report from March.

One emerging problem is stored value cards, which are similar to debit cards but can be issued anonymously. Current U. S. law does not regulate how much money can be stored on a card, so hundreds of thousands of dollars can be taken out of the country without any declaration.

The report also finds terrorist cells have turned to crime to raise funds. (ANI)