The Good Friday agreement should continue to be "protected and strengthened in all its parts" after the UK withdraws from the European Union and the common travel area allowing free travel between Ireland and the UK for Irish and UK citizens should also continue, the paper said.
"Given Ireland's unique situation in the Brexit negotiations, a unique solution is required," the Commission said.
Once there is sufficient progress on the principles set out in this paper, discussions can move on to ways to avoid a hard border on "the island of Ireland", it said.
"These solutions must respect the proper functioning of the internal market and the Customs Union, as well the integrity and effectiveness of the EU's legal order. As it was the UK's decision to leave the EU, it is the UK's responsibility to propose solutions in this regard," the Commission said.
On 20 April 2017, the European Council adopted a set of political guidelines, part of which said: "The Union has consistently supported the goal of peace and reconciliation enshrined in the Good Friday agreement in all its parts, and continuing to support and protect the achievements, benefits and commitments of the Peace Process will remain of paramount importance. In view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order. In this context, the Union should also recognise existing bilateral agreements and arrangements between the United Kingdom and Ireland which are compatible with EU law."
The UK government issued its own statement last month on customs arrangements in Ireland after Brexit.
There should be no "physical infrastructure" at the border between the Republic of Ireland and Northern Ireland after Brexit, the UK paper said.
The paper proposed what it called a "new customs partnership" or "highly streamlined customs arrangement" aimed at avoiding a hard border on the movement of goods.
Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com said: "The Commission’s paper doesn’t materially progress things. It reiterates the Commission’s commitment to a way forward, but says that it’s up to the UK to propose solutions, effectively putting the ball into the UK’s court. Meantime, despite the goodwill on all sides, it remains difficult to identify a workable solution that the EU will accept which is comparable to the flexibility under the current arrangements which are based on the common travel area."