Updated

The Al Qaeda (search) terror network is determined to use chemical and biological weapons and is restrained only by the technical difficulties of doing so, a U.N. expert panel said in a confidential report.

Sanctions on supporters of Al Qaeda and Afghanistan's former Taliban (search) rulers appear to be too limited to prevent them from obtaining weapons and explosives, said the report, obtained Friday by The Associated Press.

"The risk of Al Qaida acquiring and using weapons of mass destruction also continues to grow," the experts said. "Undoubtedly Al Qaeda is still considering the use of chemical or bio-weapons to perpetrate its terrorist actions."

The only thing holding Al Qaeda back from using chemical and biological weapons "is the technical complexity to operate them properly and effectively," the report said.

The five-member expert group led by Michael Chandler of Britain said it believes this is the main reason why Al Qaeda is still trying to develop new conventional explosive devices, such as bombs that can evade scanning machines.

The report is the second by the expert group established in January by the U.N. Security Council (search) to monitor implementation of sanctions against 272 individuals and entities linked to Al Qaeda and Afghanistan's ousted Taliban regime. The sanctions include freezing assets, a travel ban, and an arms embargo.

The experts said the bans were failing to stop Usama bin Laden's supporters, primarily because governments weren't enforcing sanctions and Al Qaeda and the Taliban had found ways to circumvent them.

Egypt, Jordan, Kuwait, Lebanon, Morocco, Pakistan, Saudi Arabia, Syria and Yemen reported the arrest of individuals linked to Al Qaeda and the Taliban, yet in most cases they didn't submit the names to be put on the sanctions list, the report said.

The report cited an investigation of two men on the U.N. list of terrorist financiers, Ahmed Idris Nasreddin (search) and Youssef Nada (search), whose bank accounts have been frozen but whose other assets including residential or commercial property in Campione d'Italia and Lugano, Switzerland, and Milan, Italy, have not been touched.

On Jan. 28, it said, Nada traveled from Campione d'Italia to Vaduz, Liechtenstein, in violation of the travel ban and applied to change the name of two of his companies that were on the sanctions list.

While "important progress has been made toward cutting off Al Qaeda financing," the report said serious loopholes remain that enable the terrorist network to funnel money to operatives.

"Al Qaeda continues to receive funds it needs from charities, deep pocket donors, and business and criminal activities, including the drug trade," it said.

It said Al Qaeda has shifted much of its financial activities to areas in Africa, the Middle East and Southeast Asia that lack the resources or the resolve to closely regulate such activity."

The experts said they participated in a series of international and European discussions on efforts to curb trafficking in weapons of mass destruction.