"Money is the life blood of war for the terrorists who attack our continent or who fight in Iraq and Syria," EU Economic Affairs Commissioner Pierre Moscovici said.
"For our own security, we must at all costs cut off their sources of funds, starting with the traffic in antiquities stolen in these countries."
Historic sites such as the Roman town of Palmyra in Syria and countless other even older cities in Iraq have been looted and damaged by extremist groups such as Islamic State who sell the cultural treasures to fund their wars.
Murky middlemen sell them on to collectors in the west who may, or may not, care too much about the origin of priceless artefacts of national or even global cultural importance.
The European Commission, the EU's executive arm, said it aimed "to stop this traffic in its tracks by banning the import into the EU of cultural goods exported illegally from their home countries."
"Diverging and ineffective existing national legislations in this area means that EU action is necessary to ensure consistent treatment of imports of cultural goods all along the EU's external borders," a statement said.
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Among the measures, the Commission said it wanted EU member states to agree a common definition for "cultural goods" which would cover "a broad range of objects including archaeological finds, ancient scrolls, the remains of historical monuments, artwork, collections and antiques."
A new licensing system will require importers to obtain clearance from EU authorities before bringing these objects into the bloc, not afterwards.
For other less sensitive items, importers will have to submit proof that the goods have been exported legally from the third country.
Customs will have the power to seize and retain goods if it cannot be shown that they have been legally exported, the statement said.
Lastly, member states will also have to ensure that "effective, proportionate and dissuasive penalties are in place."
The Commission said the the legal global art and antiques market was estimated to be worth 56 billion euros ($62 billion) in 2016, with Europe accounting for 19 billion euros.
It said the illicit trade could be worth up to 6.0 billion euros, catching up with drugs, arms or counterfeit goods trafficking.
"A string of crimes against our common cultural heritage have been perpetrated by warring factions and terrorist entities all over the world," it said.