EU's foreign policy chief Federica Mogherini says steps could include a WTO case on the issue or using a Blocking Statute, after the Trump administration lifted a ban on US citizens filing lawsuits against investors in Cuba.
The EU vowed to take "appropriate measures," including at the WTO, against the United States' full implementation of the Helms-Burton Act on Thursday, which would open the way for lawsuits in US courts over property confiscated by Cuba.
The EU considers the "application of unilateral restrictive measures to be contrary to international law," the EU's diplomatic chief Federica Mogherini said in a statement on Thursday.
President Donald Trump's administration announced in April that it would allow lawsuits in US courts over properties seized by Cuba's communist government, enforcing a provision of the 1996 Helms-Burton Act that had been waived by successive presidents.
The European Union and Canada have expressed displeasure over the US action, concerned that the property disputes will ensnare their citizens who do business in the island.
"The European Union deeply regrets the full activation of the 1996 Helms-Burton (LIBERTAD) Act by the United States," Mogherini said.
"The decision ... is a breach of the commitments undertaken in the EU-US agreements of 1997 and 1998, which had been respected by both sides without interruption since then."
"This will cause unnecessary friction and undermines trust and predictability in the transatlantic partnership."
She said the EU "will draw on all appropriate measures to address the effects of the Helms-Burton Act, including in relation to its (World Trade Organisation) rights and through the use of the EU Blocking Statute."
The "blocking statute" forbids EU firms from complying with certain US sanctions, allowing them to recover damages from such penalties and nullifying any foreign court rulings against them.
Under the US move, Cuban-Americans with US citizenship from Thursday can seek compensation in US courts from the Cuban government or private companies for their "stolen" properties on the island.
The activation of the provision of the Helms-Burton Act seeks to weaken the Cuban government, which Trump's administration considers the puppet master of Venezuela's President Nicolas Maduro and Nicaragua's President Daniel Ortega.
The Helms-Burton Law is named for former Republican senator Jesse Helms and ex-congressman Dan Burton.
They drafted the law passed by Congress after Cuba shot down two aircraft flown by exiled activists, putting an end to tentative efforts by President Bill Clinton to try to repair relations.
More recently, Trump's predecessor Barack Obama eased restrictions on Cuba, considering that the US's half-century-old policy of isolating the island had failed.