BRUSSELS (Reuters) - The European Union unveiled a draft anti-piracy law on Thursday to set uniform tough legal standards across the bloc.

The law would ensure that copyright holders could get damages and would require governments to treat piracy and counterfeiting as criminal offences.

"Pirates and counterfeiters are in effect stealing from right holders the fair payment they deserve for their work," EU Internal Market Commissioner Frits Bolkestein said in a statement.

Describing the law as a "political signal" to encourage courts to get tough with offenders, the Commission said it wanted to take the best bits from the EU's various national systems and build one legal framework.

"We have to get tough with the pirates and counterfeiters and make sure they can find no safe havens in the EU," Bolkestein said.

As well as ensuring right holders could sue for lost profits and damages, the law would let courts shut down companies that violated the law and permit authorities to seize documents and freeze assets.

The law takes aim at large-scale commercial operations that make or sell fake goods but would not stop individuals from buying a fake watch from a market stall or downloading music on the Internet.

It complements a bill unveiled on Monday, which proposed beefing up border controls to allow custom authorities to seize a broader range of goods and search luggage more closely.

DOGGED BY PIRATES

But the anti-piracy coalition, a lobbying body including movie, record, software and other trade associations, said the law should also go after individuals.

The companies wants to punish people or groups who make illicit copies of music or software and distribute it free of charge.

This is a particular concern for the software industry, which for years has been dogged by pirate Web sites that have offered free downloads of commercial products ranging from versions of Microsoft operating systems to accounting programs.

"This sends a message that may confuse people," said Francisco Mingorance, director of public policy for the Business Software Alliance.

"They're potentially saying there are some forms of piracy that are acceptable and that's not true. Theft is theft."

The coalition also complained that the directive is not tough enough on EU candidate nations, such as the Czech Republic, where piracy rates are considerably higher.

The music and software industries have been working closely with local authorities to shut down pirate organizations in Eastern Europe, an effort that has met with sporadic success.

The music industry body IFPI says that nearly 50 percent of all CDs sold worldwide are illegal copies.

The industry says that rampant piracy, often from music Web sites, has partly accounted for the slowdown in global music sales. Among the hardest hit have been the world's top five music firms: EMI, Universal Music, Warner Music, Sony and BMG.

The Motion Picture Association says that in the United States alone, $3 billion a year in potential movie revenues are lost due to piracy.

A spokesman for EU Justice and Home Affairs Commissioner Antonio Vitorino said another draft law, not expected to be unveiled before early 2004, would aim at EU-wide standards for punishing copyright crimes. (Additional reporting by Bernhard Warner in London)