BY ANDRES OPPENHEIMER

 MEXICO CITY -- A new U.S. law against international drug kingpins is raising
 alarm among top Mexican officials, who describe it as a dangerous legal
 mechanism that could hurt reputable Mexican companies and poison the two
 countries' joint anti-drug efforts.

 The law, known as the Drug Kingpin Act of 1999, was signed with little fanfare by
 President Clinton on Dec. 3 and is aimed at crippling the drug cartels' financial
 operations. It calls for the White House to identify international drug lords and
 freeze their U.S. assets, including those of their associates, family members and
 related U.S. businesses.

 According to its sponsors, Sen. Paul Coverdell, R-Ga., and Sen. Dianne
 Feinstein, D-Calif., the ultimate goal of the new legislation is to move toward the
 ``decertification'' and punishment of drug lords' business empires, rather than
 sanctioning their native countries.

 The legislation requires the U.S. Treasury Department to issue an annual report
 on the world's biggest drug traffickers, after consultations with the Attorney
 General's Office, the CIA, FBI, Drug Enforcement Administration, the State
 Department and the Pentagon.

 ANNUAL LISTING

 The list is to be submitted to the White House by June 1 each year. Then, the
 president will formally designate people on the list as threats to national security,
 subjecting them to the freezing of their assets and denial of entry into the country.
 U.S. companies doing business with those on the list will also be subject to
 sanctions, officials say.

 But top Mexican officials are calling the new U.S. law a disaster waiting to
 happen. They note that the list will not be assembled from court verdicts against
 proven criminals, but from reports from various anti-drug agencies that have often
 turned out to be mistaken or based on flimsy evidence.

 ``It could be an unfair mechanism,'' Mexico's Attorney General Jorge Madrazo
 said in an interview. ``There are fears that they will impose sanctions on
 companies based on rumors. We have already seen many cases of U.S. reports
 based on alleged intelligence sources that were based on nothing but rumors.''

 Madrazo said the new law could ``generate tensions'' between the two countries,
 among other things because the Mexican government could be asked to defend
 Mexican companies unfairly placed on the list.

 MEXICAN CONCERNS

 ``If the Arellano Felix family [of known drug lords] is on the list, that's no problem,''
 Madrazo said. ``But what happens if reputable Mexican companies are on the
 list? It could be used as a disguised U.S. protectionist measure against Mexican
 exporters.''

 Mexican officials say there has already been one case in late 1999, in which the
 U.S. government yanked the visa of a Mexican assembly firm owner and froze his
 Texas bank accounts on charges of drug money laundering. The measures were
 later withdrawn after Mexico lodged a diplomatic protest, and the allegations were
 shown to be wrong, Mexican officials say.

 ``It turned out to be a mistake,'' Interior Minister Diodoro Carrasco said in a
 separate interview. ``But mistakes like this can cause company closings, the loss
 of thousands of jobs and social problems.''

 Asked about it, U.S. Ambassador to Mexico Jeffrey Davidow said the U.S.
 government ``will exercise all caution and due process'' in implementing the law.
 ``This law is aimed at the drug kingpins. It's not aimed at one country or another.
 It's not anti-Mexican,'' he said.

 PLUSES, MINUSES

 U.S. officials concede privately that the law could lend itself to mistakes, but
 added that a previous law that targeted Colombian drug traffickers was extremely
 useful to crack down on their U.S. front companies.

 One thing on which Mexican and U.S. officials agree is that the new law is likely
 to become a political issue in coming months, much like the existing U.S. law
 that requires the White House to issue an annual ``certification'' of countries that
 cooperate in the war on drugs.

 That law, which carries commercial sanctions against ``decertified'' countries, has
 long been criticized by Mexico as an example of political arrogance by the world's
 biggest drug-consuming nation. Mexico is seeking to persuade the U.S.
 Congress to replace that law with a multilateral certification mechanism.

 Bruce Bagley, a political scientist at the University of Miami who specializes in
 narcotics, said the Drug Kingpin Act may actually be more effective than the
 country certification law.

 ``Certification with Mexico has never been a useful instrument,'' he said, adding
 that the U.S. government has always been hesitant to decertify a country as
 important as Mexico. ``The new law is going to bring greater pressure. If it is
 handled properly, it need not be based on rumors. It can be a solid list of
 traffickers who are wandering around free as birds.''

                     Copyright 2000 Miami Herald