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Spain Pioneers EU’s First AI Regulatory Sandbox: A Step Towards Innovative Compliance

Spain has embarked on a groundbreaking journey in artificial intelligence (AI) regulation by introducing the first regulatory sandbox linked to the EU AI Act. The Spanish Royal Decree 817/2023, issued on November 8, marks a significant step in the nation’s commitment to fostering innovation in AI, as highlighted by technology law experts Paloma Bru and Lidia Vidal of Pinsent Masons in Madrid.

Spain’s Leadership in AI Regulation

According to Paloma Bru, Spain’s initiative aligns with the proposed new EU AI Act, which encourages member states to create AI regulatory sandboxes. These controlled environments allow for the testing of AI systems against the requirements of the AI Act under direct supervision. “Spain is leading these efforts, having approved the first EU sandbox aimed at testing the AI regulatory requirements,” Bru stated.

The sandbox outlined in the Royal Decree enables both private and public sector organizations to test their AI systems against the AI Act’s requirements before its full implementation. However, participation hinges on meeting specific eligibility criteria.

Enhancing Regulatory Compliance and Technical Guidance

The European Commission-backed operation of Spain’s sandbox is poised to be a catalyst for regulatory compliance and the development of new technical guidelines. Lidia Vidal emphasizes the importance of this initiative, especially for SMEs and startups, in preparing for the upcoming EU AI Act. She envisages the sandbox leading to a report detailing best practices, lessons learned, and technical application guidelines based on practical experimentation.

Establishment of AI Advisory Committee and AESIA

The Royal Decree also calls for the formation of an AI advisory committee consisting of independent technical experts. Moreover, the Spanish government has established the Spanish Agency for the Supervision of Artificial Intelligence (AESIA) under Royal Decree 729/2023. This agency, the first of its kind in the EU, aligns with the proposed EU AI Act and is slated to commence operations in early December.

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AESIA’s Role and Challenges Ahead

Vidal outlines AESIA’s objectives, which include promoting real test environments for AI systems, reinforcing user protection, and avoiding discriminatory biases. The agency is also vested with the power to impose substantial fines for non-compliance with the AI Act.

It’s crucial to note that AESIA’s establishment does not supersede the role of the Spanish data protection authority (AEPD). Instead, both entities will collaborate, especially given the overlap between the new AI Act and the GDPR, as explained by Paloma Bru.

Spain’s Proactive Stance in EU Legislation

Under its current presidency of the Council of Ministers, Spain is advocating for the adoption of the proposed new EU AI Act before the end of its presidency. However, Bru acknowledges potential challenges in reaching an agreement due to reported roadblocks in negotiations.

Spain’s proactive steps in AI regulation, including the establishment of the first EU AI regulatory sandbox and AESIA, reflect a strategic approach to positioning itself as a leader in AI innovation. These developments are not just crucial for Spain but also set a precedent for other EU member states in AI governance. The success of these initiatives could shape the future of AI regulation, balancing innovation with responsible governance.

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