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Migrant crisis: EU plans penalties for refusing asylum seekers
The EU already has a flagship scheme to redistribute 160,000 migrants around the continent, but it has met only a tiny fraction of this target since it was agreed in 2015.
The planned figure of €250,000 per refused claimant could be revised but the Commission is known to want a punitive level.
The UK and Ireland can opt out of asylum policies, and the British government has already indicated it will not take part. Denmark is also exempt.
Under the fresh proposals, if a country receives more than 150% of its annual "fair share" of asylum seekers, the relocation scheme would kick in.
That share is calculated according to a country's population and economy.
"There's simply no way around it: whenever a member state is overwhelmed, there must be solidarity and a fair sharing of responsibility within the EU," Commission Vice-President Frans Timmermans said.
Countries refusing to accept their quota would effectively be fined - with the money going to frontline states such as Italy and Greece that have carried the burden.
The proposals for sanctions are likely to alarm Central European countries that have refused to implement the refugee quota deal. One senior Polish official said last week that the plan was dead.
Poland had agreed to take some 7,000 asylum seekers and could face a fine of at least €1.75bn if the proposals go through.
Hungary, Romania, the Czech Republic and Slovakia were outvoted when the quota plan was agreed.
Slovakia's interior minister, Robert Kalinak, has complained that the proposed "fair share" system fails to respect reality.
The government in Budapest on Tuesday announced plans for a referendum on the EU's resettlement plans.
The Dublin regulation is designed to stop what has become known as "asylum shopping", whereby migrants make multiple asylum claims across Europe.
Since 2005, the UK has used the Dublin rule to return 12,000 asylum seekers to where they first entered the EU.
But the migration crisis has exposed flaws in the policy, leaving Greece and Italy dealing with the majority of cases.
Germany effectively suspended the Dublin rule last August, when it said it would take in all Syrian asylum seekers, prompting an influx of migrants and refugees into the EU via Greece and the Western Balkans.
The numbers travelling the route fell when countries along the way set up fences or imposed border controls, but that has left some 50,000 migrants and refugees stranded in Greece.
The Commission says a European Union Agency for Asylum should be set up to oversee fairness within the overhauled rules.
There would be "stronger guarantees" for unaccompanied children seeking asylum as well as a change in the way family members are viewed when seeking refugee status.
A note on terminology: The BBC uses the term migrant to refer to all people on the move who have yet to complete the legal process of claiming asylum. This group includes people fleeing war-torn countries such as Syria, who are likely to be granted refugee status, as well as people who are seeking jobs and better lives, who governments are likely to rule are economic migrants.