The Industry Ministry has ordered the closure of 12 seafood processing factories in a bid to clean up the fishing industry, says deputy permanent secretary Sukda Punkla.
The move is part of plans to tackle illegal, unreported and unregulated fishing practices.
The EU has threatened to ban imports of Thai seafood products if Thailand fails to improve the quality and standards of its fishing industry.
"Since last month, the Industry Ministry has closed 12 seafood processing factories that did not have permission to operate," Mr Sukda said. "This is part of our attempt to clean up our fishing industry to meet global standards."
He said the factories ordered to close were in Samut Sakhon, Rayong, Chon Buri and Ranong provinces.
The Industry Ministry is one of several government bodies working to combat labour abuses and illegal fishing under an ad hoc committee called the Command Center to Combat Illegal Fishing (CCCIF).
Since last April, the government has battled illegal fishing after the EU gave Thailand a yellow card for failing to meet international standards of conduct, according to the CCCIF.
Failure to improve conditions in the fishing industry will result in a red card and an EU ban on seafood imports from Thailand.
The EU will soon conduct another assessment before deciding whether to issue the red card, with the results due towards the end of this month.
"Those illegal factories must be fined 50,000 to 200,000 baht and could face up to two years in jail if found guilty of committing further crimes or breaking any fishing regulations," Mr Sukda said.
He said the Industry Ministry would work closely with the CCCIF in monitoring the fishing industry and fish processing in 23 other provinces to crack down on illegality.
"Those factories that were closed down employed both Thai and migrant workers," Mr Sukda said.
"So the mission to close down illegal factories will help to brush up the image of the Thai fishing industry and ensure we're employing migrant workers who have been registered with authorities correctly."