It follows the pair’s controversial clash in Austria last weekend, when they collided while battling for the lead, converting a near certain one-two finish into a one-four result instead.
“Our drivers were informed that they remain free to race for the world championship,” read a statement from the team following meetings this morning between Hamilton and Rosberg, and Mercedes bosses Toto Wolff and Paddy Lowe.
“We believe this is the essence of Formula One, including between team mates. As passionate racers, we want to see them racing, and so do the fans of Formula One.
“However, this freedom comes with a duty for our drivers to respect the values of the team.
"In the past five races, there have been three incidents which have cost us over 50 points in the constructors’ championship.
"We have therefore strengthened our Rules of Engagement to include much greater deterrents to contact between our cars.
“With these in place, we will trust our drivers to manage the situation between them on track. Their destiny is in their own hands.
“The drivers were also reminded that we may issue instructions during the race to protect against a potential loss of constructors’ points, such as we did at this year’s Monaco GP when Nico was instructed to let Lewis pass.
“If the drivers do not honour the revised Rules of Engagement, we may impose team orders as a solution of last resort.”
Stewards deemed Rosberg to blame for the pair's Austrian crash. It followed their opening-lap collision in Spain earlier this year, which put both drivers out of the race, and their first lap tangle at Turn 1 in Canada.
Mercedes also used their statement to restate their belief in Hamilton and Rosberg as 'the best driver pairing in Formula One'. Since 2013, together they have won a total of 43 races and 40 further podium finishes, plus two consecutive world championships.
WATCH: Accident or aggression? Hamilton and Rosberg's Austrian incident explained