This was the first EU legislation proposal invoking penal sanctions to combat a crime following a ruling by the EU's highest court last year that the commission has the right to draft criminal penalties to enforce EU policies.

Unveiling the plan in Brussels, EU Justice Commissioner Franco Frattini said criminal sanctions are needed to curb rampant sale of fake goods in the EU and to deal with the increased involvement of mafia and crime groups in the distribution of pirated goods.

"Only a mandatory directive is a clear EU message against counterfeiting and piracy. And if we have criminal sanctions the message will be much stronger," said Frattini.

Faked items were recorded as ranging from food and drinks to children toys to a new case involving a Ferrari car.

According to the proposed directive, an obligatory sentence of four years imprisonment would be the minimum if the crime carries a serious risk to the health and safety of individuals.

In these cases, there would also be a fine of at least 300,000 euros.

Statistics published by the European Commission show a significant increase in counterfeit and piracy cases.

"I have been shocked by the statistics on counterfeiting and piracy which have been presented," said Frattini.

Seizures in 2004 increased by almost 1000 percent when compared to 1998.

From 2003 to 2004 the number of customs operations involving fake items reached 22,000 annually.

One of the largest increases was registered in fake products, which are dangerous to health. Food stuff, drinks and alcohol seizures increased by 200 percent when compared to 2003.

As most faked items are now household items rather than luxury goods, Frattini notes that these can now have a negative affect on individual health.

"It is an indirect and direct instrument for exploiting vulnerable people such as children," he said.

However, the proposal is likely to divide member states, with many EU governments opposed to allowing the EU's executive the right to impose jail sentences, which has traditionally been the exclusive right of national governments.

The legislation needs a qualified majority backing of EU states to become a law. Enditem