PLAN TO PUNISH TRAFFICKERS GAINS GROUND

WASHINGTON -- Congress is close to forcing a major expansion of economic
sanctions against international narcotics traffickers and the businesses
that work with them.

Legislation to impose such sanctions on drug criminals throughout the world
passed the Senate easily late last month. After initially opposing the
measures on both practical and foreign policy grounds, Clinton
administration officials have now begun to work with legislators to fashion
a bill that both the House of Representatives and the president could support.

But while such measures have some support among business executives and
government officials in Colombia -- the only country where the United States
has used them -- they are being strongly opposed by the government of Mexico
and a few of that country's biggest companies.

``The Mexican government has repeatedly expressed profound concern about the
negative consequences that may arise from the implementation of such a
proposal,'' Mexico's ambassador to Washington, JesFAs Reyes Heroles, wrote
on July 27 in a confidential letter to the White House drug-policy director,
Gen. Barry McCaffrey.

The sanctions would bar drug traffickers and their associates from doing
business in the United States, cut off their access to U.S. banks and freeze
any assets they may have deposited in this country. U.S. firms that continue
to work with companies linked to the traffickers would be subject to civil
and criminal prosecution.

Colombian targets

President Clinton first levied such penalties in 1995 against the four main
leaders of Colombia's Cali drug cartel. In a subsequent letter to Congress,
he promised, ``I shall continue to exercise the powers at my disposal to
apply economic sanctions against significant foreign narcotics traffickers
and their violent and corrupting activities as long as these measures are
appropriate.''

Since then, the Treasury Department, which administers the sanctions, has
built a list of almost 500 relatives, associates and mostly Colombian
companies linked to the traffickers. More than two dozen of those companies
have ended up liquidating their assets, officials said, while others have
had to reorganize or change their names.

But Clinton administration officials have hesitated almost from the start of
the program to extend it to drug criminals in other countries, and
particularly to those in Mexico.

In part, their concerns have been practical: Before acting against the Cali
cartel, U.S. officials had been able to analyze reams of the group's secret
business records that had been seized in raids by Colombian police teams
backed by the Drug Enforcement Administration and the CIA.

By contrast, the most powerful Mexican drug mafias are believed to have
hidden their wealth in mazes of front companies, aliases and associates that
the U.S. authorities have not yet been able to penetrate.

More important, perhaps, some senior administration officials have also
worried about the political and economic impact that the sanctions might
have on a country that is the United States' second-most-important trading
partner, officials said.

Pressure from Congress

If approved, the legislation that passed the Senate on July 21 and a similar
bill pending in the House would essentially force the administration to do
what it has done with Colombia on a global scale.

So far, that action has been taken by executive order under the
International Emergency Economic Powers Act, the law that has been used to
freeze the assets of and stop Americans from doing business with the
governments of Gen. Manuel Noriega in Panama and the revolutionaries who
held Americans hostage in Iran.

By Jan. 1, 2000, and by every year thereafter, the legislation would require
the secretary of the Treasury to submit a list of major international drug
traffickers after consulting with the CIA and the departments of Justice,
Defense and State.

That list would then be evaluated by the White House drug-policy director
and forwarded to the president. By March 1, the president would have to
produce a final list of traffickers to be sanctioned, as well as a report to
Congress explaining his reasons if he has decided to leave off any of the
accused traffickers suggested by his aides.

The legislation would freeze the assets of the traffickers and any companies
that they may partly own or control and prohibit American businesses from
working with them. It would also cover the American assets of any person or
company that aids a trafficker's illicit activities.

As a practical matter, the publication of such lists would probably only be
the start of an elaborate investigation, congressional and administration
officials said.