The Immigration and Naturalization Service has completed an investigation into its handling of Miroslav Medvid, the Soviet sailor returned to his boat by INS personnel last month after twice jumping into the Mississippi River in an apparent defection attempt.

Justice Department spokesman Patrick Korten said yesterday that the INS has finished its part of the investigation and that the matter is now being studied by the staffs of Attorney General Edwin Meese III and Deputy Attorney General D. Lowell Jensen. Korten said Meese will decide soon whether further investigation is needed of the INS' handling of the incident.

The timing of the Medvid case and ensuing controversy have caused concern because of their proximity to next week's U.S.-Soviet summit.

Last week, an administration official said there was a widespread feeling that "heads should roll" at the INS.

Korten said Meese is "very upset that it happened, very upset [that] the Justice Department personnel are involved. He is determined that whatever the cause, steps must be taken to address it.

"The problem could have been that individual judgment was faulty, it may have been the rules under which these guys operate or it may have been both," Korten said. "The feeling right now is that there appears at minimum to have been some individual shortcomings. But we may want to look at the rules as well."

The INS report, which included sworn statements from Border Patrol agents who handled the case, generally reaches no specific conclusions, according to a federal official familiar with it.

The Soviet grain freighter Marshal Konev, with Medvid aboard, was allowed to leave U.S. waters late Saturday after administration officials decided they would not try to enforce a subpoena for the sailor from the Senate Agriculture Committee.

Agents for the Border Patrol, a subsidiary agency of the INS, twice returned Medvid to his freighter early Oct. 25, even though a part-time INS interpreter, Irene Padoch, has claimed she told them Medvid was requesting political asylum.

Regulations require INS agents to notify the State Department immediately in political-asylum cases. It is not clear whether that was done in this case. INS officials have conceded that it was a mistake to return Medvid to the ship.

On Oct. 28, Medvid, who is about 25, was taken from the ship for questioning by State Department officials. During 24 hours in U.S. custody, he insisted that he did not want to defect, that he simply fell overboard and wanted to return to his parents in the Soviet Union.

A psychiatric report on Medvid by an American doctor suggested that he changed his mind about defecting because of threats against his parents by superiors on the ship.