-1a. National competent authorities may establish AI regulatory sandboxes for the development, training, testing and validation of innovative AI systems under the direct supervision, guidance and support by the national competent authority, before those systems are placed on the market or put into service. Such regulatory sandboxes may include testing in real world conditions supervised by the national competent authorities.

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-1c Where appropriate, national competent authorities shall cooperate with other relevant authorities and may allow for the involvement of other actors within the AI ecosystem.

-1d. This Article shall not affect other regulatory sandboxes established under national or Union law, including in cases where the products or services that are tested in them are linked to the use of innovative AI systems. Member States shall ensure an appropriate level of cooperation between the authorities supervising those other sandboxes and the national competent authorities.

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1b. The establishment of AI regulatory sandboxes under this Regulation shall aim to contribute to one or more of the following objectives:

1. foster innovation and competitiveness and facilitate the development of an AI ecosystem;

2. facilitate and accelerate access to the Union market for AI systems, in particular when provided by small and medium enterprises (SMEs), including start-ups;

3. improve legal certainty and contribute to the sharing of best practices through cooperation with the authorities involved in the AI regulatory sandbox with a view to ensuring future compliance with this Regulation and, where appropriate, with other Union and Member States legislation;

4. contribute to evidence-based regulatory learning.

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2a. Access to the AI regulatory sandboxes shall be open to any provider or prospective provider of an AI system who fulfils the eligibility and selection criteria referred to in paragraph 6(a) and who has been selected by the national competent authorities following the selection procedure referred to in paragraph 6(b). Providers or prospective providers may also submit applications in partnership with users or any other relevant third parties.

Participation in the AI regulatory sandbox shall be limited to a period that is appropriate to the complexity and scale of the project. This period may be extended by the national competent authority.

Participation in the AI regulatory sandbox shall be based on a specific plan referred to in paragraph 6 of this Article that shall be agreed between the participant(s) and the national competent authoritie(s), as applicable.

3. The participation in the AI regulatory sandboxes shall not affect the supervisory and corrective powers of the authorities supervising the sandbox. Those authorities shall exercice their supervisory powers in a flexible manner within the limits of the relevant legislation, using their discretionary powers when implementing legal provisions to a specific AI sandbox project, with the objective of supporting innovation in AI in the Union.  

Provided that the participant(s) respect the sandbox plan and the terms and conditions for their participation as referred to in paragraph 6(c) and follow in good faith the guidance given by the authorities, no administrative fines shall be imposed by the authorities for infringement of applicable Union or Member State legislation relating to the AI system supervised in the sandbox, including the provisions of this Regulation.

4. The participants remain liable under applicable Union and Member States liability legislation for any damage caused in the course of their participation in an AI regulatory sandbox.

4a. Upon request of the provider or prospective provider of the AI system, the national competent authority shall provide, where applicable, a written proof of the activities successfully carried out in the sandbox. The national competent authority shall also provide an exit report detailing the activities carried out in the sandbox and the related results and learning outcomes. Such written proof and exit report could be taken into account by market surveillance authorities or notified bodies, as applicable, in the context of conformity assessment procedures or market surveillance checks.

Subject to the confidentiality provisions in Article 70 and with the agreement of the sandbox participants, the European Commission and the AI Board shall be authorised to access the exit reports and shall take them into account, as appropriate, when exercising their tasks under this Regulation. If both the participant and the national competent authority explicitly agree to this, the exit report can be made publicly available through the single information platform referred to in article 55(3)(b).

4b. The AI regulatory sandboxes shall be designed and implemented in such a way that, where relevant, they facilitate cross-border cooperation between the national competent authorities.

5. National competent authorities shall make publicly available annual reports on the implementation of the AI regulatory sandboxes, including good practices, lessons learnt and recommendations on their setup and, where relevant, on the application of this Regulation and other Union legislation supervised within the sandbox. Those annual reports shall be submitted to the AI Board which shall make publicly available a summary of all good practices, lessons learnt and recommendations. This obligation to make annual reports publicly available shall not cover sensitive operational data in relation to the activities of law enforcement, border control, immigration or asylum authorities. The Commission and the AI Board shall, where appropriate, take the annual reports into account when exercising their tasks under this Regulation.

5b. The Commission shall ensure that information about AI regulatory sandboxes, including about those established under this Article, is available through the single information platform referred to in Article 55(3)(b).

6. The modalities and the conditions for the establishment and operation of the AI regulatory sandboxes under this Regulation shall be adopted through implementing acts in accordance with the examination procedure referred to in Article 74(2).

The modalities and conditions shall to the best extent possible support flexibility for national competent authorities to establish and operate their AI regulatory sandboxes, foster innovation and regulatory learning and shall particularly take into account the special circumstances and capacities of participating SMEs, including start-ups.

Those implementing acts shall include common main principles on the following issues:

1. eligibility and selection for participation in the AI regulatory sandbox;

2. procedure for the application, participation, monitoring, exiting from and termination of the AI regulatory sandbox, including the sandbox plan and the exit report;

3. the terms and conditions applicable to the participants.

7. When national competent authorities consider authorising testing in real world conditions supervised within the framework of an AI regulatory sandbox established under this Article, they shall specifically agree with the participants on the terms and conditions of such testing and in particular on the appropriate safeguards with the view to protect fundamental rights, health and safety. Where appropriate, they shall cooperate with other national competent authorities with a view to ensure consistent practices across the Union.