The new legislation comes into force on Wednesday
Foreign drivers who commit traffic offences in England and Wales such as speeding or using a mobile phone can now be given fixed penalty fines.
Until now, police have been able to arrest drivers for serious offences such as drink driving, but could not issue fines for lesser offences.
Now foreign drivers face fines of £60 for using a mobile and vehicles can be immobilised until a payment is made.
Around three million foreign-registered vehicles enter Britain each year.
Nearly one accident in 50 involves a foreign vehicle.
Previously, police have been unable to issue fixed penalties for speeding, driving over permitted hours, or having a dangerous vehicle.
Now, foreign drivers found using mobile phones while driving, or speeding, face £60 fines, the same as a domestic driver.
More serious offences such as tailgating will carry an immediate fine of £300, while foreign drivers found to have committed more than one offence face fines of up to £900.
Over half of those stopped are found to have defects.
Foreign lorry drivers have previously been able to flout rules on how long they can drive for; laws designed to stop accidents caused by tiredness.
In January, the Metropolitan Police said hundreds of motorists whose vehicles were registered abroad were not being prosecuted for driving offences because they could not be traced.
The force's figures showed speed cameras were activated by foreign-registered vehicles 8,880 times in 2007-8, however there were few prosecutions.
Police blame the fact that driver summons papers are not enforceable abroad, and say the lack of access to overseas databases is also unhelpful.