Countries around the world must do their part to keep money and weapons out of the hands of terrorists, Treasury Secretary Henry Paulson said Thursday.

Although important efforts have been made on this front, especially since the Sept. 11, 2001, terror attacks against the United States, Paulson underscored the need for more international progress.

Paulson said several of the United States' "key allies" — which were not named— have yet to take such basic steps as adequately criminalizing money laundering and terrorist financing.

An even greater number of countries have failed to develop national authorities, or powers, to apply targeted financial measures to terrorist groups other than Al Qaeda and the Taliban in Afghanistan, Paulson added.

"We have a shared responsibility for our mutual security, and our allies, who confront risks at least as great as those confronting the United States, must find the political will to enact the authorities they need to join in effective multilateral action," Paulson said in a speech before the Council on Foreign Relations in New York.

A copy of his remarks was made available in Washington.

Securing the power to use targeted financial measures "may not deal a knockout punch, but they can and will produce results and change behavior," Paulson predicted.

The United States' use of targeted financial measures to freeze assets of specific companies or people and bar Americans from doing business with them are proving to be quite effective, Paulson said.

Broad economic sanctions against a country can sometimes be perceived as political statements and thus it can be difficult to persuade other governments and companies in other countries to support such sanctions, he said. But the dynamic is different when the case for acting against a specific company, person or group is carefully laid out.

The United States is now using targeted financial measures, for instance, against North Korea and Iran — countries where there also are broad countrywide sanctions in place. Companies outside the United States have voluntarily cut off business with U.S.-designated entities in those countries as a result of the targeted measures by the U.S., Paulson said.

"Most of the world's top financial institutions have now dramatically reduced their Iranian business or stopped it altogether," he said.

Iran's nuclear ambitions have drawn international rebuke; there have been moves by the U.N. Security Council to discuss a third set of sanctions against Iran.

The United States has alleged that Iran has engaged in deceptive financial conduct. It has used front companies and other mechanisms that make it difficult, if not impossible, for companies dealing with Iran to know their actual customer, Paulson alleged. State-owned Iranian banks, including the Central Bank of Iran, repeatedly asked other financial institutions to remove their names from global transactions, Paulson said.