The proposal/initiative relates to:

X a new action

 a new action following a pilot project/preparatory action⁶⁴

 the extension of an existing action

 an action redirected towards a new action 1.4. Objective(s)

1.4.1. General objective(s)

The general objective of the intervention is to ensure the proper functioning of the single market by creating the conditions for the development and use of trustworthy artificial intelligence in the Union.

1.4.2. Specific objective(s) Specific objective No 1

To set requirements specific to AI systems and obligations on all value chain participants in order to ensure that AI systems placed on the market and used are safe and respect existing law on fundamental rights and Union values;

Specific objective No 2

To ensure legal certainty to facilitate investment and innovation in AI by making it clear what essential requirements, obligations, as well as conformity and compliance procedures must be followed to place or use an AI system in the Union market;

Specific objective No 3

To enhance governance and effective enforcement of existing law on fundamental rights and safety requirements applicable to AI systems by providing new powers, resources and clear rules for relevant authorities on conformity assessment and ex

64 As referred to in Article 54(2)(a) or (b) of the Financial Regulation

post monitoring procedures and the division of governance and supervision tasks between national and EU levels;

Specific objective No 4

To facilitate the development of a single market for lawful, safe and trustworthy AI applications and prevent market fragmentation by taking EU action to set minimum requirement for AI systems to be placed and used in the Union market in compliance with existing law on fundamental rights and safety.

1.4.3. Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

AI suppliers should benefit from a minimal but clear set of requirements, creating legal certainty and ensuring access to the entire single market.

AI users should benefit from legal certainty that the high-risk AI systems they buy comply with European laws and values.

Consumers should benefit by reducing the risk of violations of their safety or fundamental rights.

1.4.4. Indicators of performance

Specify the indicators for monitoring implementation of the proposal/initiative.

Indicator 1

Number of serious incidents or AI performances which constitute a serious incident or a breach of fundamental rights obligations (semi-annual) by fields of applications and calculated a) in absolute terms, b) as share of applications deployed and c) as share of citizens concerned.

Indicator 2

a) Total AI investment in the EU (annual)

b) Total AI investment by Member State (annual) c) Share of companies using AI (annual)

d) Share of SMEs using AI (annual)

a) and b) will be calculated based on official sources and benchmarked against private estimates

c) and d) will be collected by regular company surveys 1.5. Grounds for the proposal/initiative

1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative

The Regulation should be fully applicable one year and a half after its adoption.

However, elements of the governance structure should be in place before then. In particular, Member States shall have appointed existing authorities and/or established new authorities performing the tasks set out in the legislation earlier, and the EU AI Board should be set-up and effective. By the time of applicability, the European database of AI systems should be fully operative. In parallel to the adoption process, it is therefore necessary to develop the database, so that its development has come to an end when the regulation enters into force.

1.5.2. Added value of Union involvement (it may result from different factors, e.g.

coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this point 'added value of Union involvement' is the value resulting from Union intervention which is additional to the value that would have been otherwise created by Member States alone.

An emerging patchy framework of potentially divergent national rules will hamper the seamless provision of AI systems across the EU and is ineffective in ensuring the

safety and protection of fundamental rights and Union values across the different Member States. A common EU legislative action on AI could boost the internal market and has great potential to provide European industry with a competitive edge at the global scene and economies of scale that cannot be achieved by individual Member States alone.

1.5.3. Lessons learned from similar experiences in the past

The E-commerce Directive 2000/31/EC provides the core framework for the functioning of the single market and the supervision of digital services and sets a basic structure for a general cooperation mechanism among Member States, covering in principle all requirements applicable to digital services. The evaluation of the Directive pointed to shortcomings in several aspects of this cooperation mechanism, including important procedural aspects such as the lack of clear timeframes for response from Member States coupled with a general lack of responsiveness to requests from their counterparts. This has led over the years to a lack of trust between Member States in addressing concerns about providers offering digital services cross-border. The evaluation of the Directive showed the need to define a differentiated set of rules and requirements at European level. For this reason, the implementation of the specific obligations laid down in this Regulation would require a specific cooperation mechanism at EU level, with a governance structure ensuring coordination of specific responsible bodies at EU level.

1.5.4. Compatibility with the Multiannual Financial Framework and possible synergies with other appropriate instruments

The Regulation Laying Down Harmonised Rules on Artificial Intelligence and Amending Certain Union Legislative Acts defines a new common framework of requirements applicable to AI systems, which goes well beyond the framework provided by existing legislation. For this reason, a new national and European regulatory and coordination function needs to be established with this proposal.

As regards possible synergies with other appropriate instruments, the role of notifying authorities at national level can be performed by national authorities fulfilling similar functions sunder other EU regulations.

Moreover, by increasing trust in AI and thus encouraging investment in development and adoption of AI, it complements Digital Europe, for which promoting the diffusion of AI is one of five priorities.

1.5.5. Assessment of the different available financing options, including scope for redeployment

The staff will be redeployed. The other costs will be supported from the DEP.

envelope, given that the objective of this regulation – ensuring trustworthy AI – contributes directly to one key objective of Digital Europe – accelerating AI development and deployment in Europe.