Article 99 Penalties

In accordance with the terms and conditions laid down in this Regulation, Member States shall lay down the rules on penalties and other enforcement measures, which may also include warnings and non-monetary measures, applicable to infringements of this Regulation by operators means a provider, product manufacturer, deployer, authorised representative, importer or distributor;, and shall take all measures necessary to ensure that they are properly and effectively implemented, thereby taking into account the guidelines issued by the Commission pursuant to Article 96. The penalties provided for shall be effective, proportionate and dissuasive. They shall take into account the interests of SMEs, including start-ups, and their economic viability.

The Member States shall, without delay and at the latest by the date of entry into application, notify the Commission of the rules on penalties and of other enforcement measures referred to in paragraph 1, and shall notify it, without delay, of any subsequent amendment to them.

Non-compliance with the prohibition of the AI practices referred to in Article 5 shall be subject, for the purpose of real-world testing, means a natural person who participates in testing in real-world conditions; to administrative fines of up to EUR35 000 000or, if the offender is an undertaking, up to 7 % of its total worldwide annual turnover for the preceding financial year, whichever is higher.

1. obligations of providers means a natural or legal person, public authority, agency or other body that develops an AI system or a general-purpose AI model or that has an AI system or a general-purpose AI model developed and places it on the market or puts the AI system into service under its own name or trademark, whether for payment or free of charge; pursuant to Article 16;

2. obligations of authorised representatives means a natural or legal person located or established in the Union who has received and accepted a written mandate from a provider of an AI system or a general-purpose AI model to, respectively, perform and carry out on its behalf the obligations and procedures established by this Regulation; pursuant to Article 22;

3. obligations of importers means a natural or legal person located or established in the Union that places on the market an AI system that bears the name or trademark of a natural or legal person established in a third country; pursuant to Article 23;

4. obligations of distributors means a natural or legal person in the supply chain, other than the provider or the importer, that makes an AI system available on the Union market; pursuant to Article 24;

5. obligations of deployers means a natural or legal person, public authority, agency or other body using an AI system under its authority except where the AI system is used in the course of a personal non-professional activity; pursuant to Article 26;

6. requirements and obligations of notified bodies means a conformity assessment body notified in accordance with this Regulation and other relevant Union harmonisation legislation; pursuant to Article 31, Article 33(1), (3) and (4) or Article 34;

7. transparency obligations for providers means a natural or legal person, public authority, agency or other body that develops an AI system or a general-purpose AI model or that has an AI system or a general-purpose AI model developed and places it on the market or puts the AI system into service under its own name or trademark, whether for payment or free of charge; and deployers means a natural or legal person, public authority, agency or other body using an AI system under its authority except where the AI system is used in the course of a personal non-professional activity; pursuant to Article 50.

The supply of incorrect, incomplete or misleading information to notified bodies means a conformity assessment body notified in accordance with this Regulation and other relevant Union harmonisation legislation; or national competent authorities means a notifying authority or a market surveillance authority; as regards AI systems put into service or used by Union institutions, agencies, offices and bodies, references to national competent authorities or market surveillance authorities in this Regulation shall be construed as references to the European Data Protection Supervisor; in reply to a request shall be subject, for the purpose of real-world testing, means a natural person who participates in testing in real-world conditions; to administrative fines of up to EUR7 500 000or, if the offender is an undertaking, up to 1 % of its total worldwide annual turnover for the preceding financial year, whichever is higher.

In the case of SMEs, including start-ups, each fine referred to in this Article shall be up to the percentages or amount referred to in paragraphs 3, 4 and 5, whichever thereof is lower.

1. the nature, gravity and duration of the infringement and of its consequences, taking into account the purpose of the AI system means a machine-based system that is designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments;, as well as, where appropriate, the number of affected persons and the level of damage suffered by them;

2. whether administrative fines have already been applied by other market surveillance authorities means the national authority carrying out the activities and taking the measures pursuant to Regulation (EU) 2019/1020; to the same operator means a provider, product manufacturer, deployer, authorised representative, importer or distributor; for the same infringement;

3. whether administrative fines have already been applied by other authorities to the same operator means a provider, product manufacturer, deployer, authorised representative, importer or distributor; for infringements of other Union or national law, when such infringements result from the same activity or omission constituting a relevant infringement of this Regulation;

4. the size, the annual turnover and market share of the operator means a provider, product manufacturer, deployer, authorised representative, importer or distributor; 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;

6. the degree of cooperation with the national competent authorities means a notifying authority or a market surveillance authority; as regards AI systems put into service or used by Union institutions, agencies, offices and bodies, references to national competent authorities or market surveillance authorities in this Regulation shall be construed as references to the European Data Protection Supervisor;, in order to remedy the infringement and mitigate the possible adverse effects of the infringement;

7. the degree of responsibility of the operator means a provider, product manufacturer, deployer, authorised representative, importer or distributor; taking into account the technical and organisational measures implemented by it;

8. the manner in which the infringement became known to the national competent authorities means a notifying authority or a market surveillance authority; as regards AI systems put into service or used by Union institutions, agencies, offices and bodies, references to national competent authorities or market surveillance authorities in this Regulation shall be construed as references to the European Data Protection Supervisor;, in particular whether, and if so to what extent, the operator means a provider, product manufacturer, deployer, authorised representative, importer or distributor; notified the infringement;

9. the intentional or negligent character of the infringement;

10. any action taken by the operator means a provider, product manufacturer, deployer, authorised representative, importer or distributor; to mitigate the harm suffered by the affected persons.

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

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 by other bodies, as applicable in those Member States. The application of such rules in those Member States shall have an equivalent effect.

The exercise of powers under this Article shall be subject, for the purpose of real-world testing, means a natural person who participates in testing in real-world conditions; to appropriate procedural safeguards in accordance with Union and national law, including effective judicial remedies and due process.

Member States shall, on an annual basis, report to the Commission about the administrative fines they have issued during that year, in accordance with this Article, and about any related litigation or judicial proceedings.