US ANTI-DRUG LEGISLATION INVITES ABUSE, CARRIER SAYS

Transportacion Maritima Mexicana is worried about U.S. legislation to crack
down on drug traffickers. And TMM says everyone in the maritime industry
should be, too.

The legislation, the Foreign Narcotics Kingpin Designation Act, is part of
a classified bill authorizing U.S. intelligence programs for fiscal year
2000. It includes a provision allowing the government to seize assets of
companies linked to drug trafficking.

The measure cleared a House-Senate conference committee last week and won
House approval Tuesday. The Senate was expected to approve the legislation
this week, but because a single senator can put a "hold" on a bill, there
was the chance of a new delay.

TMM, the Mexican transportation conglomerate, has vigorously opposed the
bill. The company hired the Washington lobbying firm Verner, Liipfert,
Bernhard and Hand, which employs two former Senate majority leaders - Bob
Dole, R-Kan., and George Mitchell, D-Maine - to try to kill or amend it.

TMM has fought to clear its name since news accounts quoted U.S.
intelligence reports tying the company to the drug trade. Executives of TMM
officials say their company has no ties to drug traffickers, and that TMM
has cooperated with U.S. Customs efforts to curb drug smuggling.

The congressional bill calls for the administration to compile an annual
list of narcotics traffickers and related companies.

Although TMM said it is not worried that it would be included on the list,
the pending legislation could allow the U.S. government to seize a
company's assets based on unfounded accusations.

"All that we're asking for is a safeguard to establish a defense,"
explained Luis Calvillo, a TMM spokesman in Mexico City.

Such protections were not included in the conference report, which cannot
be amended by the House or Senate. Instead, the bill sets up an independent
commission to evaluate the new law's effects after a year.

A congressional staffer who has worked on the legislation said TMM
lobbyists have succeeding in blocking the legislation since July, and that
TMM is the only transportation company that has fought the measure.

"Other companies have not given the issue the high profile that we have,"
Calvillo said. "We are not afraid of doing things openly."

MUCH ADO ABOUT SOMETHING

TMM has a lot at stake. The company's operations touch much of what moves
in international supply chains in Mexico. TMM co-owns the country's main
north-south railroad, has a joint venture with U.S. trucking giant J.B.
Hunt Transport, and operates a container terminal in Manzanillo and a car
terminal in Acapulco.

TMM is sharply expanding its logistics presence in Mexico, especially for
automakers, who use the company for materials management, parts
distribution and for hauling finished vehicles and parts by rail and sea.

"They have a lot to lose, because they are not just in the transport side
of the industry," said a high-level U.S. Customs official.

On the international front, TMM is a partner of Americana Ships, a Tampa,
Fla., joint venture with CP Ships.

COLOMBIAN LINK NOTED

Among the reasons for greater scrutiny and concern in Washington is TMM's
ownership of Colombia's principal ship line, Transportacion Maritima
Grancolombiana. Colombia is the world's leading cocaine producer and
Mexico is the main conduit into the United States.

The pending legislation raises potential problems for shippers, who could
face the possibility of their goods being seized along with ships or other
equipment of a carrier that makes the drug-trafficking list.

And any ship line that did not participate in Customs anti-smuggling
efforts and other corporate anti-drug efforts could potentially find itself
on the list.

TMM has long complained that it is being singled out, and that drugs are
routinely found on other carriers' vessels. Just last week, more than 7,000
pounds of marijuana were found at Miami on a Seaboard Marine vessel
arriving from Jamaica.

EFFORT TO PREVENT PROBLEMS

TMM earlier this year took the unprecedented step of agreeing to work with
U.S. Customs on internal security measures in all its transport operations.

Hoping to win breathing room on the legislation, it also agreed to become
the first Mexican participant in the Business Anti-Smuggling Coalition, a
Customs program that tries to reduce drug-smuggling by analyzing risk from
the factory to the customer's doorstep.