The Bush Administration has said it is taking seriously a Human Rights Watch report, which documents the LTTE's fund-raising outside Sri Lanka as also methods involved in the "collection".
"We have designated the LTTE a long time ago as a foreign terrorist organisation and this was in part because of its activities outside of Sri Lanka raising funds," a senior US administration said.
Washington is concerned about the report, released by the New York-based group on Wednesday, especially as it pertains to fund-raising among the community in the US.
"US law prohibits the LTTE from collecting money in the United States and it is illegal for American citizens to provide money to the LTTE," the official said.
"Our law enforcement agencies are aware of this and are on the lookout for these kinds of activity."
According to the official, the US has called upon the LTTE to renounce "terrorist methods" in word and deed and stop practices such as recruiting child soldiers.
"We urge it to participate sincerely in the peace process," the official added.