PRISTINA, Yugoslavia -- With 37,000 NATO-led peacekeeping troops patrolling it, Kosovo may not be the first place one thinks of as a smugglers' paradise.

But it is.

Two different worlds converge here in Kosovo, utterly unrelated to each other. Heroin and cocaine come cheap at parties. Mercedes and BMWs, sparkling new and without license plates, cruise through the capital at dusk, packed with young men talking on cell phones. When they stop in front of key office buildings, a couple of men get out, crossing their arms as if armed and not to be messed with, while another goes inside to conduct business. The rumbling oversized tank of a British KFOR patrol turns the corner at an intersection less than 10 feet away.

Kosovo sits between two European countries overrun with organized crime. Albania, the poorest country in Europe, sits along a well-trod drug and arms trading route between Asia and Europe. The northern part of Albania, which borders Kosovo, is almost entirely in the hands of armed gangs.

To Kosovo's northeast, Serbia, after a decade of international economic sanctions and isolation, is also rife with corruption, arms smuggling and state-sanctioned theft of public funds to private bank accounts (some 300 cronies of Yugoslav president Slobodan Milosevic have recently had their Swiss bank accounts frozen and been banned from travel to the European Union and the United States).

Organized crime loves a vacuum. Interpol now estimates that 40 percent of the heroin supply in Western Europe travels through Kosovo.

In addition, Kosovo has a past which makes it an ideal breeding ground for organized crime. For the past 10 years, since Milosevic revoked the province's autonomy, most Kosovo Albanians have been pushed out of the state sector, and forced to look for work in private ventures and abroad. Many Kosovo Albanian men went abroad to work in Germany, Switzerland, Scandinavia and the United States -- some in construction and other above-board professions, others in the underworld of drug trafficking -- to earn money to send back to their extended families. An extensive network of travel agencies helped traffic money from Europe and the United States back to relatives in Kosovo.

But certain conditions of the post-war period make Kosovo even more ideal as a base for organized crime. There is an almost complete lack of civil authority here, despite the presence of KFOR soldiers. Have your apartment broken into, car stolen, neighbor murdered, and there is no one to call. KFOR soldiers dutifully come to make a report if someone's been killed. But you can call the police emergency number in Kosovo all you want, and no one comes, because for the moment there are no functioning police. To date, some 600 U.N. international police have arrived, but the international police commissioner does not plan to deploy any of them until he has most of his 3,000 men.

In the meantime, there are virtually open borders. The fact that Serbian police destroyed many Kosovo Albanians' identity papers and license plates as they were deporting them means that KFOR allows almost anyone back in, without or without a passport. To date, there are no functioning customs officers on Kosovo's borders. KFOR soldiers check cars for weapons, but do not prevent entry for people who are, for instance, importing an enormous supply of cigarettes.

General Fritz von Korff, the commander of German KFOR forces, told journalists in Kosovo last week that his troops frequently come across smuggled items, such as massive amounts of cigarettes, when they are checking cars for weapons. But as von Korff understands it, KFOR's mandate does not permit his soldiers to confiscate any item except for weapons, and consequently the smugglers are permitted into Kosovo with their loot.

After 10 years of the most oppressive Serbian rule, the current lack of civilian authority in Kosovo is a shock, a kind of unbearable lightness of being.

The resultant crime wave threatens to make life uncomfortable not only for Kosovo's dwindling ethnic minorities, but for its long-suffering ethnic Albanian majority. NATO spokesman Jamie Shea estimated this week that some 30 people are murdered in Kosovo every week.

One of the biggest crime problems overtaking the capital Pristina is the seizure of apartments by gangs of Albanians claiming close ties to those high up in the Kosovo Liberation Army. The gangs are taking over apartments, real estate, businesses and cars from both Kosovo Albanian and Serbian owners, who have little recourse to justice.

"[The United Nations] is completely unprepared to take over law and order. In the absence of a police force and legitimate rules and legislation, a huge vacuum has occurred," said a British KFOR official in Pristina involved with civil-military relations, who asked not to be named. "That vacuum is being filled by organized crime. Representatives of Albanian gangs are inviting Kosovo Serbs to leave their apartments. Now Kosovo Albanians are being invited to leave their apartments by other Albanians."

While no statistics are available from KFOR or the United Nations on the number of property seizures, anecdotes suggest it is a growing problem. And while initially it seemed that seizures were ethnically motivated and targeted at Kosovo Serbs in the capital of Pristina, increasingly Kosovo Albanians are the victims as well. KFOR reports there have been several complaints from Kosovo Albanian residents of the Sunny Hill neighborhood of Pristina, who say their apartments were seized by Albanians from outside Kosovo.

A U.N. police commander who asked not to be identified said his force's intelligence suggests most of the organized crime in Kosovo is backed by Russians, Albanian nationals and gangs linked to the Kosovo Liberation Army. Some Kosovo analysts suggest that the KLA is doling out the seized apartments and other goodies as payment to those it owes favors -- arms procurers, financial backers and important soldiers and their relatives.

U.N. officials defend themselves from criticism that the organization's slowness in deploying police and civil administrators throughout Kosovo is in part responsible for the growing crime problem. One top U.N. commander said that unlike KFOR, which has been preparing for a Kosovo mission since February, the United Nations wasn't told it was to take over civilian operations in Kosovo until June.

Excuses aside, however, it may already be too late. An American involved in the international police force, who asked to remain anonymous, says by the time the U.N. police are deployed, criminal gangs will already have their networks set up.