Title V: MEASURES IN SUPPORT OF INNOVATION
MEASURES IN SUPPORT OF INNOVATION
AI regulatory sandboxes
1. Member States shall establish at least one AI regulatory sandbox at national level, which shall be operational at the latest on the day of the entry into application of this Regulation This sandbox can also be established jointly with one or several other Member States.
1 a. Additional AI regulatory sandboxes at regional or local levels or jointly with other Member States may also be established;
1 b. The Commission and the European Data Protection Supervisor, on their own, jointly or in collaboration with one or more Member States may also establish AI regulatory sandboxes at Union level;
1 c. Establishing authorities shall allocate sufficient resources to comply with this Article effectively and in a timely manner;
1 d. AI regulatory sandboxes shall, in accordance with criteria set out in Article 53a, provide for a controlled environment that fosters innovation and facilitates the development, testing and validation of innovative AI systems for a limited time before their placement on the market or putting into service pursuant to a specific plan agreed between the prospective providers and the establishing authority;
1 e. The establishment of AI regulatory sandboxes shall aim to contribute to the following objectives:
a) for the competent authorities to provide guidance to AI systems prospective providers providers to achieve regulatory compliance with this Regulation or where relevant other applicable Union and Member States legislation;
b) for the prospective providers to allow and facilitate the testing and development of innovative solutions related to AI systems;
c) regulatory learning in a controlled environment.
1 f. Establishing authorities shall provide guidance and supervision within the sandbox with a view to identify risks, in particular to fundamental rights, democracy and rule of law, health and safety and the environment, test and demonstrate mitigation measures for identified risks, and their effectiveness and ensure compliance with the requirements of this Regulation and, where relevant, other Union and Member States legislation;
1 g. Establishing authorities shall provide sandbox prospective providers who develop high-risk AI systems with guidance and supervision on how to fulfil the requirements set out in this Regulation, so that the AI systems may exit the sandbox being in presumption of conformity with the specific requirements of this Regulation that were assessed within the sandbox. Insofar as the AI system complies with the requirements when exiting the sandbox, it shall be presumed to be in conformity with this regulation. In this regard, the exit reports created by the establishing authority shall be taken into account by market surveillance authorities or notified bodies, as applicable, in the context of conformity assessment procedures or market surveillance checks;
2. Establishing authorities shall ensure that, to the extent the innovative AI systems involve the processing of personal data or otherwise fall under the supervisory remit of other national authorities or competent authorities providing or supporting access to personal data, the national data protection authorities, or in cases referred to in paragraph 1b the EDPS, and those other national authorities are associated to the operation of the AI regulatory sandbox and involved in the supervision of those aspects to the full extent of their respective tasks and powers.
3. The AI regulatory sandboxes shall not affect the supervisory and corrective powers of the competent authorities, including at regional or local level. Any significant risks to fundamental rights, democracy and rule of law, health and safety or the environment identified during the development and testing of such AI systems shall result in immediate and adequate mitigation. Competent authorities shall have the power to temporarily or permanently suspend the testing process, or participation in the sandbox if no effective mitigation is possible and inform the AI office of such decision.
4. Prospective providers in the AI regulatory sandbox shall remain liable under applicable Union and Member States liability legislation for any harm inflicted on third parties as a result of the experimentation taking place in the sandbox. However, provided that the prospective provider(s) respect the specific plan referred to in paragraph 1c and the terms and conditions for their participation and follow in good faith the guidance given by the establishing authorities, no administrative fines shall be imposed by the authorities for infringements of this Regulation.
5. Establishing authorities shall coordinate their activities and cooperate within the framework of the AI office.
5 a. Establishing authorities shall inform the AI Office of the establishment of a sandbox and may ask for support and guidance. A list of planned and existing sandboxes shall be made publicly available by the AI office and kept up to date in order to encourage more interaction in the regulatory sandboxes and transnational cooperation;
5 b. Establishing authorities shall submit to the AI office and, unless the Commission is the sole establishing authority, to the Commission, annual reports, starting one year after the establishment of the sandbox and then every year until its termination and a final report. Those reports shall provide information on the progress and results of the implementation of those sandboxes, including best practices, incidents, lessons learnt and recommendations on their setup and, where relevant, on the application and possible revision of this Regulation and other Union law supervised within the sandbox. Those annual reports or abstracts thereof shall be made available to the public, online;
6. The Commission shall develop a single and dedicated interface containing all relevant information related to sandboxes, together with a single contact point at Union level to interact with the regulatory sandboxes and to allow stakeholders to raise enquiries with competent authorities, and to seek nonbinding guidance on the conformity of innovative products, services, business models embedding AI technologies;
The Commission shall proactively coordinate with national, regional and also local authorities, where relevant.
6 a. For the purpose of paragraph 1 and 1a, the Commission shall play a complementary role, enabling Member States to build on their expertise and, on the other hand, assisting and providing technical understanding and resources to those Member States that seek guidance on the set-up and running of these regulatory sandboxes;
Article 53 a
Modalities and functioning of AI regulatory sandboxes
1. In order to avoid fragmentation across the Union, the Commission, in consultation with the AI office, shall adopt a delegated act detailing the modalities for the establishment, development, implementation, functioning and supervision of the AI regulatory sandboxes, including the eligibility criteria and the procedure for the application, selection, participation and exiting from the sandbox, and the rights and obligations of the participants based on the provisions set out in this Article;
2. The Commission is empowered to adopt delegated acts in accordance with the procedure referred to in Article 73, no later than 12 months following the entry into force of this Regulation and shall ensure that:
a) regulatory sandboxes are open to any applying prospective provider of an AI system who fulfils eligibility and selection criteria. The criteria for accessing to the regulatory sandbox are transparent and fair and establishing authorities inform applicants of their decision within 3 months of the application;
b) regulatory sandboxes allow broad and equal access and keep up with demand for participation;
c) access to the AI regulatory sandboxes is free of charge for SMEs and start-ups without prejudice to exceptional costs that establishing authorities may recover in a fair and proportionate manner;
d) regulatory sandboxes facilitate the involvement of other relevant actors within the AI ecosystem, such as notified bodies and standardisation organisations (SMEs, start-ups, enterprises, innovators, testing and experimentation facilities, research and experimentation labs and digital innovation hubs, centers of excellence, individual researchers), in order to allow and facilitate cooperation with the public and private sector;
e) they allow prospective providers to to fulfil, in a controlled environment, the conformity assessment obligations of this Regulation or the voluntary application of the codes of conduct referred to in Article 69;
f) procedures, processes and administrative requirements for application, selection, participation and exiting the sandbox are simple, easily intelligible, clearly communicated in order to facilitate the participation of SMEs and start-ups with limited legal and administrative capacities and are streamlined across the Union, in order to avoid fragmentation and that participation in a regulatory sandbox established by a Member State, by the Commission, or by the EDPS is mutually and uniformly recognised and carries the same legal effects across the Union;
g) participation in the AI regulatory sandbox is limited to a period that is appropriate to the complexity and scale of the project.
h) the sandboxes shall facilitate the development of tools and infrastructure for testing, benchmarking, assessing and explaining dimensions of AI systems relevant to sandboxes, such as accuracy, robustness and cybersecurity as well as minimisation of risks to fundamental rights, environment and the society at large
3. Prospective providers in the sandboxes, in particular SMEs and start-ups, shall be facilitated access to pre-deployment services such as guidance on the implementation of this Regulation, to other value-adding services such as help with standardisation documents and certification and consultation, and to other Digital Single Market initiatives such as Testing & Experimentation Facilities, Digital Hubs, Centres of Excellence, and EU benchmarking capabilities;
Further processing of data for developing certain AI systems in the public interest in the AI regulatory sandbox
1. In the AI regulatory sandbox personal data lawfully collected for other purposes may be processed solely for the purposes of developing and testing certain AI systems in the sandbox when all of the following conditions are met:
(a) AI systems shall be developed for safeguarding substantial public interest in one or more of the following areas:
(ii) public safety and public health, including disease detection, diagnosis prevention, control and treatment;
(iii) a high level of protection and improvement of the quality of the environment, protection of biodiversity, pollution as well as climate change mitigation and adaptation;
(iii a) safety and resilience of transport systems, critical infrastructure and networks.
(b) the data processed are necessary for complying with one or more of the requirements referred to in Title III, Chapter 2 where those requirements cannot be effectively fulfilled by processing anonymised, synthetic or other non-personal data;
(c) there are effective monitoring mechanisms to identify if any high risks to the rights and freedoms of the data subjects, as referred to in Article 35 of Regulation (EU) 2016/679 and in Article 35 of Regulation (EU) 2018/1725 may arise during the sandbox experimentation as well as response mechanism to promptly mitigate those risks and, where necessary, stop the processing;
(d) any personal data to be processed in the context of the sandbox are in a functionally separate, isolated and protected data processing environment under the control of the prospective provider and only authorised persons have access to that those data;
(e) any personal data processed are not be transmitted, transferred or otherwise accessed by other parties;
(f) any processing of personal data in the context of the sandbox do not lead to measures or decisions affecting the data subjects nor affect the application of their rights laid down in Union law on the protection of personal data;
(g) any personal data processed in the context of the sandbox are protected by means of appropriate technical and organisational measures and deleted once the participation in the sandbox has terminated or the personal data has reached the end of its retention period;
(h) the logs of the processing of personal data in the context of the sandbox are kept for the duration of the participation in the sandbox;
(i) complete and detailed description of the process and rationale behind the training, testing and validation of the AI system is kept together with the testing results as part of the technical documentation in Annex IV;
(j) a short summary of the AI system developed in the sandbox, its objectives, hypotheses, and expected results, published on the website of the competent authorities.
2. Paragraph 1 is without prejudice to Union or Member States legislation excluding processing for other purposes than those explicitly mentioned in that legislation.
Article 54 a
Promotion of AI research and development in support of socially and environmentally beneficial outcomes
1. Member States shall promote research and development of AI solutions which support socially and environmentally beneficial outcomes, including but not limited to development of AI-based solutions to increase accessibility for persons with disabilities, tackle socioeconomic inequalities, and meet sustainability and environmental targets, by:
(a) providing relevant projects with priority access to the AI regulatory sandboxes to the extent that they fulfil the eligibility conditions;
(b) earmarking public funding, including from relevant EU funds, for AI research and development in support of socially and environmentally beneficial outcomes;
(c) organising specific awareness raising activities about the application of this Regulation, the availability of and application procedures for dedicated funding, tailored to the needs of those projects;
(d) where appropriate, establishing accessible dedicated channels, including within the sandboxes, for communication with projects to provide guidance and respond to queries about the implementation of this Regulation.
Member States shall support civil society and social stakeholders to lead or participate in such projects;
Measures for SMEs, start-ups and users
1. Member States shall undertake the following actions:
(a) provide SMEs and start-ups, established in the Union, with priority access to the AI regulatory sandboxes, to the extent that they fulfil the eligibility conditions;
(b) organise specific awareness raising and enhanced digital skills development activities on the application of this Regulation tailored to the needs of SMEs, start-ups and users;
(c) utilise existing dedicated channels and where appropriate, establish new dedicated channels for communication with SMEs, start-ups, users and other innovators to provide guidance and respond to queries about the implementation of this Regulation.
(ca) foster the participation of SMEs and other relevant stakeholders in the standardisation development process.
2. The specific interests and needs of the SMEs, start-ups and users shall be taken into account when setting the fees for conformity assessment under Article 43, reducing those fees proportionately to development stage, their size, market size and market demand. The Commission shall regularly assess the certification and compliance costs for SMEs and start-ups, including through transparent consultations with SMEs, start-ups and users and shall work with Member States to lower such costs where possible. The Commission shall report on these findings to the European Parliament and to the Council as part of the report on the evaluation and review of this Regulation provided for in Article 84(2).