Assessing the Feasibility of Cross-Border AI Sandboxes under the EU AI Act (Baku State University Law Review)

Summary

• The paper analyzes whether joint AI regulatory sandboxes are legally and practically viable under Articles 57 and 58 of the EU AI Act, using a Spain-Czech partnership model as its primary case study.p.1
• Spain created the first operational AI sandbox via Royal Decree 817/2023 on 8 November 2023 following a joint pilot announced with the European Commission in June 2022.p.6
• The Czech Republic approved its Draft Implementation of the EU AI Act on 28 May 2025, following the adoption of its National AI Strategy 2030 on 24 July 2024.p.8
• The article details five interrelated gaps in the AI Act's cross-border sandbox architecture that must be addressed for joint operations to succeed.p.9
• Under Article 57(10), national data protection authorities and other competent sectoral bodies must be associated with the operation and supervision of AI sandbox activities.p.17
• Civil jurisdiction and cross-border non-contractual liability for damage during sandbox testing remain strictly subject to Regulation No. 1215/2012 and Regulation No. 864/2007.p.21

Key insights

1. The EU AI Act sandbox functions as a guidance-based and supervision-centered mechanism rather than a broad legal derogation regime.p.10
2. Sandbox participation does not relieve AI system providers from civil liability under national or Union law for harm caused during real-world testing.p.5
3. The EU AI Act lacks common admission criteria, creating risks of unequal market access and regulatory arbitrage across joint sandboxes.p.14
4. National institutional differences require joint sandboxes to establish an ex-ante protocol allocating supervisory authority between lead and co-supervisors.p.18
5. Mutual recognition of sandbox outputs requires an enforcement backstop with shared escalation ladders and interoperable supervisory records.p.22
6. Transnational sandbox testing does not alter standard private international law rules regarding competent courts or applicable law under Brussels I bis and Rome II.p.23
7. Bilateral memorandums of understanding can serve as effective pilot protocols while Union-wide implementing acts under Article 58 are developed.p.26