European lawmakers have complained that Iceland and the autonomous Danish Faroe Islands are exploiting European accomplishments in the management of mackerel stocks.
Iceland walked away from mackerel talks with Europe in November and a delegation from the Faroe Islands left the negotiating table in mid December.
Scottish Fisheries Secretary Richard Lochhead said in a statement that getting the sustainability certification blocked sent a strong signal to the Faroes Islands that its fishing practices were irresponsible.
"We are pleased that our objection has been upheld as it is clear that the Faroes is in breach of the criteria to be considered a sustainably sourced fishery," he said.
The Faroes Islands in 2010 set mackerel quotas three times higher than normal.
"Our priority is to find a solution to the crisis and reach a new four-party deal -- between the EU, Norway, Iceland and the Faroe Islands -- that safeguards the future of the mackerel stock," Lochhead said.
Scotland, for its part, said it gets more than $200 million from mackerel fishing.