Since Sept. 11, 2001, the United States and several other countries have touted their success in identifying terrorist cells and cutting off terrorism financing. The Bush administration regularly asserts that al Qaeda is financially weakened and forced to cut expenditures. There is now reason to question these assumptions. The pace of terrorist recruitment and activities appears to be accelerating, not decreasing, and the number of terrorist attacks continues to grow. And evidence is mounting that large sums are still being raised and transferred to al Qaeda terrorists, including the insurgents in Iraq and Afghanistan.

While the fight against terrorism has benefited from increased intelligence, this effort has not been enough to cut off al Qaeda's financing or to put its financial supporters out of business. Turning intelligence into actionable evidence for civil designation or criminal prosecutions, has proved exceedingly difficult. There are heavy constraints on sharing intelligence and, even when it is shared with investigators, special efforts are required to come up with open-source evidence that can confirm the intelligence and stand up in court. This is why the Swiss had to drop its criminal case against Youssef Nada and al Taqwa and why even the successful terrorism funding investigations usually end up with plea bargains on lesser charges.

We need to find a better way to bridge this intelligence-evidence gap.

While most countries have laws authorizing them to freeze assets belonging to persons or entities designated by the Security Council as supporters of terrorism, little action has been taken beyond freezing bank accounts. This has left tangible assets, including businesses and other income-producing property, in the hands of many identified al Qaeda supporters. U.N.-designated al Qaeda financiers such as Nada and Ahmed Idris Nasreddin continue to run their business networks from their headquarters in Campione d'Italia and Rabat, Morocco. Yassin Qadi, a Saudi millionaire who has been listed by the United Nations as a supporter of terrorism, continues to direct his international business empire from Switzerland and Saudi Arabia.

Several large Islamic charities, despite their designation by the United States and the United Nations as sources of terrorism funding, also continue in operation. The Saudi government pledged to close the al Haramain Islamic Foundation and its branches around the world, and to more closely monitor the outward flow of charitable funds, but there are few indications that it has actually done so. Al Haramain branches remain operational in several countries, while other branches have merely changed their names. And little has been done to prosecute the individuals in these charities responsible for funding terrorism. Charities in Saudi Arabia and other Gulf countries are still being used to raise money for the Iraqi insurgency.

The United States has put great effort into tracking terrorist funds. A major part of this effort involves regulating and monitoring domestic banking activities and overseas transactions. And it has done a good job of driving terrorism financing away from U.S. shores. Other countries also have financial intelligence units similar to the Treasury Department's Financial Crimes Enforcement Network. But few, if any, are as active. Most countries rely on their banking and financial communities to police themselves. And few nations other than the United States impose penalties on banks for failing to meet due-diligence requirements. Getting them to strengthen this process remains one of our most difficult challenges.

The U.S. government is considering expanding domestic reporting requirements to cover the millions of international transactions that flow through U.S. banking facilities each year. But the U.S. banking industry is resisting these moves. Its members already feel overburdened by reporting requirements. Greater emphasis, they maintain, must be placed on getting other countries to better shoulder their responsibilities to cut off al Qaeda's money sources and other terrorist funding.

It's time for the United States and all countries committed to winning the war on terrorism to tighten the slack on terrorism financing. We must insist that all identified terrorist financiers be put out of business. Only by making the penalties for terrorism financing clear and severe will other well-heeled supporters of terrorist groups be persuaded to stop funding them. We must also hold those responsible for administering charitable funds to the highest standards of accountability. There can be no impunity for permitting charitable funds to flow into the hands of terrorists. The Patriot Act and the Bank Secrecy Act provide considerable leverage to press financial institutions in other countries to fully implement high standards of due diligence and "know your customer" requirements. Getting them to do so would lessen the burden on our banks and facilitate the tracing of money flows through the international banking system. These were the goals laid out at the 2003 Evian G-8 summit and reconfirmed at the 2004 Sea Island summit. We must begin to realize them.

The writer, a former State Department official and member of the U.N. al Qaeda monitoring group, is an attorney and consultant on terrorism financing.