The report lodges some of the strongest international criticisms since Sri Lanka ended its war against Tamil rebels in May, and could prompt the EU to remove more than $100 million in trade concessions.
Previous criticism from abroad has had little impact on the Sri Lankan government, which remains more popular at home than ever. It said Thursday it would study the EU's report and respond by a Nov. 6 deadline.
The inquiry, conducted over the past year to determine whether the country should continue receiving trade concessions, found that Sri Lanka was in severe breach of human rights law in its final bloody push against the Liberation Tigers of Tamil Eelam (LTTE). It should lose the concessions, the report stated.
The details of the report coincide with the discovery of hundreds of Tamil asylum seekers who had fled the island, on boats bound for Canada and Australia – a reminder of the suffering faced by many of Sri Lanka's Tamils nearly half a year after the government declared the 25-year war against the LTTE, or Tamil Tigers, over.
Since the war's end in May, Western countries and the world's sizeable Tamil diaspora have pressed for some kind of accountability for thousands of Tamil deaths and human rights violations during the last phase of fighting.
The US State Department released Thursday a report on allegations of war crimes in Sri Lanka during the last months of its civil war. The US emphasized that the report had not reached legal conclusions and recommends that Sri Lanka investigates the allegations.
There have also been repeated calls for the immediate release of more than 200,000 Tamils who remain in camps in the island's north.
But at home, plaudits
Despite castigations from abroad, Sri Lanka's government is more popular at home than ever, after winning what many had viewed as an unwinnable war.
Sinhalese constitute around 74 percent of Sri Lanka's population and Tamils around 18 percent. Their discrimination as the minority helped fuel the Tamil Tigers' long war.
Last week, Sri Lanka announced it would hold both presidential and parliamentary elections before next April – two years ahead of schedule. The announcement followed President Mahinda Rajapaksa's eighth decisive victory in provincial elections. Victory in general polls seems almost certain for the ardent Sinhalese nationalist.
Mr. Rajapaksa has said he will wait until after the vote to introduce political reforms aimed at addressing Tamil grievances. He speaks often of the need for reconciliation, but critics are growing more skeptical about what this might mean in practice.
On Monday, the New York-based Human Rights Watch said a new commitment from the government to return 100,000 of the original 273,000 displaced people stuck in camps "breaks a promise to camp residents and the international community."
In May, the government had said 80 percent of the displaced people would be able to return home by the end of the year.
"Enough is enough," said Brad Adams, Asia director at Human Rights Watch, in a statement. "It is well past time to release civilians detained in the camps. Sri Lanka's international friends should tell the government that they will not accept any more broken promises."
The EU's report provides evidence of police violence, torture, and breaches of employment laws, notably the use of underage children.
EU: Sri Lanka's biggest export market
The concessions at stake made the EU Sri Lanka's largest export market in 2008, accounting for 36 percent of all exports. Garments earned the country a record $3.47 billion from EU markets and were its biggest source of foreign exchange, followed by remittances and tea.
Over the weekend, 76 migrants believed to be Tamils fleeing the island were arrested on a ship off Canada's coast. There are reports that a further 255 Tamil migrants, who couldn't afford to board that vessel, paid instead for a passage to Australia. They were intercepted in Indonesia and given temporary asylum.
[Editor’s note: This story was updated to reflect the release of the US report today.]