NATIONAL NARCOTIC INTELLIGENCE CONSUMER COMMITTEE (NNICC) ESTIMATES SHOW THAT HEROIN IMPORTS HAVE DECREASED SINCE 1976, ALTHOUGH A SHARP DECLINE IN IMPORTS FROM MEXICO HAS BEEN PARTLY OFFSET BY INCREASES IN HEROIN IMPORTS FROM SOUTHEAST ASIA AND THE MIDDLE EAST. COCAINE TRAFFICKING IS FAR LESS STRUCTURED THAN HEROIN TRAFFICKING AND IS CHARACTERIZED BY MORE NUMEROUS DILIVERIES. COCAINE IS WIDELY ABUSED AND BELIEVED TO BE GAINING IN POPULARITY. CONSIDERABLE PROFITS ARE INVOLVED FOR EVERYONE IN THE ILLICIT COCAINE DISTRIBUTION CHAIN WITH THE POSSIBLE EXCEPTION OF THE SOUTH AMERICAN FARMER WHO SUPPLIES THE COCA LEAVES. MARIHUANA IS THE TOP INCOME GENERATOR AMONG ILLICIT DRUGS, HOWEVER REPRESENTING 35 PERCENT OF ALL THE ILLEGAL INCOME RESULTING FROM DRUG TRANSACTIONS. THE MARIHUANA TRADE INFLUENCES INTERNATIONAL POLITIES AND IS INCREASINGLY BEING PRODUCED IN THE U.S.. AS INDICATED BY A DEA STUDY REVEALING 71 PERCENT OF DEA'S NARCOTIC AND SCHEDULE II DEFENDANTS WERE RELEASED FOR $10,000 BAIL OR LESS, THE PENALTIES FOR TRAFFICKING IN LARGE QUANTITIES OF MARIHUANA SHOULD BE INCREASED. A CASE HISTORY ILLUSTRATES HOW DRUG TRAFFICKING CAN BE HALTED WHEN THE PENALTIES ARE SUFFICIENTLY SEVERE. DEA'S APPROACH TO ENFORCING THE DRUG LAWS IS ONE OF THE DEVELOPING CASES CASES AGAINST MAJOR ORGANIZATIONS THROUGH WORKING WITHIN THE CONTROLLED SUBSTANCES ACT. OTHER LEGAL WEAPONS INCLUDE THE CRIMINAL FRAUD STATUTE OF THE INTERNAL REVENUE CODE AND, MORE RECENTLY, FINANCIAL INTELLIGENCE OPERATIONS AUTHORIZED UNDER THE BANK SECRECY ACT. CHANGES IN THE TAX REFORM ACT ARE ADVOCATED TO FACILITATE THE FLOW OF INVESTIGATIVE INFORMATION TO DEA FROM THE INTERNAL REVENUE SERVICE. A TABLE AND A CHART ARE PROVIDED. (DEG)