The decision on Monday by the foreign ministers of the 28 EU states is the latest step to stem the flow of people from Libya to Italy, now the main escape route to the bloc.
"We took a decision to introduce restrictions from today onwards on the export and supply to Libya of the inflatable boats and motors," EU foreign policy chief Federica Mogherini said.
"These devices are used by traffickers for smuggling activities. This decision we have taken on the European Union level will help make their businesses and lives even more complicated," the former Italian foreign minister told reporters.
An EU statement said there will now be a legal basis to block the supply of dinghies and outboard motors to Libya if there are "reasonable grounds" to suspect they will be used by people smugglers and human traffickers.
The restrictions will also apply to such goods if they are transiting through the EU to Libya - a move which would, in theory, affect China where many are manufactured.
Fishermen and others who have legitimate reasons to use the dinghies and motors will still be able to import them, the council said.
In practice, EU countries could deny licenses to import-export businesses suspected of supplying smugglers, according to EU sources.
|The new rule does not cover Libya's neighbouring countries, which remain a source of dinghies and outboard motors for smugglers [Reuters File]|
Crossings and deaths
The new rule does not cover Libya's neighbouring countries, which remain a source of dinghies and outboard motors for smugglers.
As of May 2017, there have been 1,530 people who drowned while crossing the Mediterranean and most of them were reportedly trying to cross to Italy, according to the International Organization for Migration (IOM).
The foreign ministers meanwhile extended until the end of 2018 an EU mission to help Libya re-establish effective controls mainly at its southern borders where sub-Saharan African refugees and migrants first arrive.
Libya is struggling to control its long land borders with Sudan, Chad and Niger.
In another bid to stop smuggling, the EU has also trained 113 Libyan coastguard members in the last few months and plans to train another 75 starting in September, Mogherini told reporters.
The EU is facing growing pressure from Italy to stop the flow of people to its shores, including demands to make member states admit tens of thousands of refugees and migrants under a largely unenforced emergency plan launched nearly two years ago.
More than 100,000 refugees and migrants have crossed the Mediterranean Sea since the start of the year, and 84 percent have arrived in Italy from Libya by boat, according to the IOM.