The EU commission made the decision after pressure from the World Trade Organisation (WTO), which in November 2013 called the exemption discriminatory.
Sweden is one of six countries in the world that allows the hunting of seals, though only as part of wildlife management and with permission from the Swedish Environmental Protection Agency (Naturvårdsverket). Around 300 seals were killed in 2014.
The EU decision does not forbid the culling of seals. But rather than selling the fur or the meat, the products must now be destroyed.
Swedish MEP Christofer Fjellner, member of the Moderate party, was among those who hit out at the new rules on Friday.
"The consequence is that you introduce legislation that says 'shoot and dig'", he said.
The new rules do not affect seal product trade amongst the Inuit people of the Arctic.
Last year the Swedish Environmental Protection Agency (Naturvårdsverket) ruled that up to 400 seals could be culled along the country's coast in a bid to protect depleting stocks of fish.
"The seals cause significant damage for the fishing industry every year," the agency concluded in a statement.