The EU cosmetics Regulation must be interpreted to mean companies cannot rely on results from animal tests conducted outside the EU to support the safety of products inside the Union.
The European Court of Justice (ECJ) made the ruling after the European Federation for Cosmetic Ingredients (EFfCI) sought clarity on the EU marketing ban.
The trade group wanted to know if animal test data generated outside the EU could be used within the Union. This might include in vivo data generated from places such as China. EFfCI said this was not clearly caught by the ban.
The ruling agrees with last March's Opinion from European Court Advocate General Michal Bobek.
Cruelty Free International and the European Coalition to End Animal Experiments (ECEAE) argued against the cosmetics industry's "attempts to water down" the testing ban.
Following the ruling, the NGOs are urging regulators to ensure its effective enforcement across the EU.
"National regulators must stay vigilant and ensure the cosmetics ban is upheld to prevent the suffering of animals," said Michelle Thew, chief executive of Cruelty Free International and ECEAE.
And Claire Mansfield, director of Humane Society International (HSI), said: "We are pleased industry's cynical attempt to circumvent EU restrictions on cosmetics animal testing and sales has failed."
"This is a significant, but only partial victory," Peta UK's Julia Baines said. "It allows companies to market products in the EU after they've been tested on animals in other countries as long as the tests aren't used to demonstrate product safety."
EFfCI says it will release a statement in the next few days.