1. In compliance with the terms and conditions laid down in this Regulation, Member States shall lay down the rules on penalties, including administrative fines, applicable to infringements of this Regulation and shall take all measures necessary to ensure that they are properly and effectively implemented. The penalties provided for shall be effective, proportionate, and dissuasive. They shall take into particular account the size and interests of SME providers, including start-ups, and their economic viability. They shall also take into account whether the use of the AI system is in the context of personal non-professional activity.

2. The Member States shall without delay notify the Commission of those rules and of those measures and of any subsequent amendment affecting them.

3. Non-compliance with any of the prohibitions of the artificial intelligence practices referred to in Article 5 shall be subject to administrative fines of up to 30 000 000 EUR or, if the offender is company, up to 6 % of its total worldwide annual turnover for the preceding financial year, whichever is higher. In case of SMEs, including start-ups, these fines shall be up to 3% of their worldwide annual turnover for the preceding financial year.

4. Infringements of the following provisions related to operators or notified bodies, shall be subject to administrative fines of up to 20 000 000 EUR or, if the offender is a company, up to 4 % of its total worldwide annual turnover for the preceding financial year, whichever is higher:

    -a.  obligations of providers pursuant to Articles 4b and 4c;

1. obligations of providers pursuant to Article 16;

2. obligations for certain other persons pursuant to Article 23a;

3. obligations of authorised representatives pursuant to Article 25;

4. obligations of importers pursuant to Article 26;

5. obligations of distributors pursuant to Article 27;

6. obligations of users pursuant to Article 29, paragraphs 1 to 6a;

7. requirements and obligations of notified bodies pursuant to Article 33, 34(1), 34(3), 34(4), 34a;

8. transparency obligations for providers and users pursuant to Article 52.

In case of SMEs, including start-ups, these fines shall be up to 2% of their worldwide annual turnover for the preceding financial year.

5. The supply of incorrect, incomplete or misleading information to notified bodies and national competent authorities in reply to a request shall be subject to administrative fines of up to 10 000 000 EUR or, if the offender is a company, up to 2 % of its total worldwide annual turnover for the preceding financial year, whichever is higher. In case of SMEs, including start-ups, these fines shall be up to 1% of their worldwide annual turnover for the preceding financial year.

6. When deciding on the amount of the administrative fine in each individual case, all relevant circumstances of the specific situation shall be taken into account and due regard shall be given to the following:

1. the nature, gravity and duration of the infringement and of its consequences;

     aa. the intentional or negligent character of the infringement;

    ab. any action taken by the operator in order to remedy the infringement and mitigate the possible adverse effects of the infringement;

2. whether administrative fines have been already applied by other market surveillance authorities in other Member States to the same operator for the same infringement;

   ba. whether administrative fines have been already applied by other authorities to the same operator for infringements of other Union or national law, when such infringements result from the same activity or omission constituting a relevant infringement of this Act;

3. the size, the annual turnover and market share of the operator committing the infringement;

4. the size, the annual turnover and market share of the operator committing the infringement;

5. any other aggravating or mitigating factor applicable to the circumstances of the case, such as financial benefits gained, or losses avoided, directly or indirectly, from the infringement.

7. Each Member State shall lay down rules on whether and to what extent administrative fines may be imposed on public authorities and bodies established in that Member State.

8. Depending on the legal system of the Member States, the rules on administrative fines may be applied in such a manner that the fines are imposed by competent national courts or other bodies as applicable in those Member States. The application of such rules in those Member States shall have an equivalent effect.

9. The exercise by the market surveillance authority of its powers under this Article shall be subject to appropriate procedural safeguards in accordance with Union and Member State law, including effective judicial remedy and due process.