The decision by judges in Europe's highest court sets a precedent that could see the Commission put forward minimum or maximum sentences to accompany new legislation. That would mark a significant change, since the right to decide penalties has so far been seen as the preserve of member states.
The British Government said it was "disappointed" but argued that it has enough allies to guard against any moves to harmonise aspects of European criminal law. Officials stressed that the judgment has implications only for areas where the EU has extensive competence - such as with internal market or environment laws - and not for standard criminal offences, such as burglary or murder.
All EU legislative measures have to be agreed by national governments as well as the Commission and European Parliament. They can be blocked if there is enough opposition.
The ruling from the European Court of Justice came after a fiercely fought test case between the Commission and 11 EU member states, including Britain, over environmental legislation. The governments wanted to leave the issue of criminal sanctions applied to those who broke the law to the member states, without input from the European Commission and Parliament.
Instead the court ruled that the member states should be required to ensure sanctions were applied for serious breaches of EU law. Because environment is an area in which the European Commission already has powers, it cannot be bypassed in proposing and agreeing criminal sanctions, the ruling said.
Jose Manuel Barroso, the Commission president, said: "This judgment ... strengthens democracy and efficiency in the EU. It makes clear that wherever criminal sanctions are involved by Community law, they cannot be decided without full democratic control by the European Parliament." But member states can still block any proposal for criminal sanctions providing they have a qualified majority. The fact that 11 of the 15 countries that made up the EU before it expanded fought the case implies that any attempts by the Commission to put forward criminal penalties for environment law will be blocked.
But the head of the Commission's legal service, Michel Petite, hinted that in future the Commission might not only push member states to apply criminal sanctions, but also to set the scale of sanctions. The Commission said the ruling applied to areas where it enjoys competence, including internal market measures, environmental protection, data protection, defence of intellectual property and monetary matters.
Chris Davies, the Liberal Democrat leader in the European Parliament, said: "Europe needs an umpire to ensure fair play between member states and to dismiss the cheats. The Commission is the only body that comes close to fitting that role."
The leader of Britain's Tory MEPs, Timothy Kirkhope, said: "This appears to be a worrying erosion of British sovereignty... The Commission sees this as an opportunity to... interfere in the criminal law of member states."Reuse content