A UN panel said Liberia's US-based shipping registry needed to open its books to avoid the perception it had something to hide, even though it was not responsible for an illegal diversion of funds.

The expert panel, commissioned by the UN Security Council, released an addendum over the weekend to an earlier, longer report on violations of UN sanctions imposed on Liberia for fomenting warfare in the region.

The shipping registry, by which some 1,900 vessels use Liberia's flag of convenience, had made four payments that ended up in private bank accounts and were probably used to buy weapons in violation of a UN arms embargo, the panel reported last year.

In the new addendum, the panel said it had not found any evidence "that would suggest culpability" by the Liberian International Shipping and Corporate Registry, based in Vienna, Virginia, the operating agent for the Liberian government.

But it said suspicions of wrongdoing were "not entirely undeserved". It made a number of recommendations, including that LISCR, a private company, disclose the identity of its shareholders "in order to avoid the possible perception of a conflict of interest".

"Current registration in the State of Delaware that grants shareholders extensive secrecy and protection from legal claims may be an inadvertent but unseemly arrangement in light of the importance the registries have for Liberia's economy," the panel said.

Earlier reports from the panel charged that about $5 million had been diverted into bank accounts or real estate ventures controlled by former Liberian President Charles Taylor, now in exile in Nigeria. Officials of LISCR previously said they had no idea the funds were being used to buy arms.

Liberia earns at least $18 million a year from the registry but the panel said "true figures are unknown".

"The financial transactions are a closely guarded secret and even Liberia's maritime affairs commissioner, Benoni W. Urey, has admitted he does not know the registry's real value," the panel's report said.