"I was afraid," he recalls. "But the police didn't arrest me. They just sent me to a drug commission that told me I needed treatment."

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Mr. Oliveria is one of the first to benefit from a new law, in effect since July 1, that focuses on trying to rehabilitate drug users. Portugal has become the first European country to decriminalize the use - but not sale - of all drugs, from cannabis to crack cocaine.

The change solidifies a significant shift away from the punitive approach in socially conservative Portugal, where a consensus had formed that criminalizing drug use was a failed policy. In enacting the new legislation, Portugal mirrors attitudes in more liberal Spain and Italy, which, instead of imposing criminal punishment on drug use, have historically limited the punishment to fines and other administrative sanctions, such as enrollment in a drug-treatment program.

Danilo Ballotta, a drug-law specialist at the Lisbon-based European Monitoring Center for Drugs and Drug Addiction, says the recent changes in Portugal reflect a European movement to treat the use of drugs as a health - rather than a criminal - issue.

"Even in those countries where there is strict legislation, there seems to be a movement towards more progressive legislation," Mr. Ballotta says.

Previously in Portugal, those possessing or consuming small amounts of drugs faced up to one year in jail, although that law was rarely enforced. The police had stopped arresting suspects, and the courts were throwing out cases against users rather than apply legislation that sent them to prison.

Now, for possession of heroin, de Oliveria is enrolled in a methadone clinic, trying to kick his 20-year heroin addiction.

"We see that prohibition has failed," says Vitalino Canas, Portugal's drug czar. But he is quick to say that the country has not gone soft on drugs. "We are not liberalizing nor legalizing drugs. But those that use them shouldn't go to jail. Users are sick people. Only if they do not accept treatment will we impose administrative sanctions." The sanctions include fines of up to several hundred dollars and public service.

Removing drug users from the criminal justice system will allow Portuguese police to turn more energy toward catching those importing, dealing, and possessing large quantities of narcotics. "Traffickers are our enemy," says Canas, "and now we can focus our efforts on them."

Portugal is considered to be one of the main gateways for drugs entering Europe. Addiction rates are among the highest in Europe, with an estimated 80,000 heroin addicts in a population of 10 million. The Netherlands, by comparison, has about 25,000 in a population of 16 million. To help addicts, and to crack down harder on traffickers, Portugal is raising its drugs-fighting budget to $104.5 million, up from $34 million in 1995.

Critics of the new law say it will make the situation in the country worse. "There will be planeloads of students headed for the Algarve to smoke marijuana," Paulo Portas, the head of the opposition Popular Party, warned as the law was passed.

Authorities claim there is no evidence of "drug tourists" yet, and Portugal has no intention of becoming Europe's drug-party haven. Holland is still significantly more liberal in practice.

In Portugal, a newly established drug commission determines what will happen to a user detained by police. Marijuana smokers not deemed at risk for harder drugs, for example, are dismissed with a warning, while those addicted to harder drugs are sent to treatment centers. If the commission's recommendations are ignored, or in cases of repeat offenses, administrative sanctions are imposed, including fines up to the equivalent of one minimum monthly wage, suspension of the right to travel abroad, or a requirement of public service. The user can also be banned from a profession or location if he presents a danger to others.

So far, the modest number of cases suggest that police are choosing to enforce the law only occasionally. The commission in Lisbon has seen an average of about three cases per day.

Portugal has also passed another law aimed at treating users. In the Lisbon neighborhood of Curraleira, where trash tangles with weeds around weathered public housing, a bus dispensing free methadone began making runs three weeks ago. Addicts line up in the gray of an early Saturday morning for their daily dose.

Luis Ferreira, a thin man with a scraggly beard and matted hair, hopes that joining the methadone treatment will allow him to kick his five-year addiction. "I was begging in the train stations" to get enough money for heroin, he said. "Now I have a chance to take charge of my life."

When the methadone bus first pulled into the neighborhood, dealers threw stones and yelled at the staff, says the nurse on duty. "They are afraid we will take away their customers."