What results do we expect to achieve by creating regulatory sandboxes? In order to strengthen regulatory sandboxes as a tool to drive digitalisation forward, the Federal Ministry for Economic Affairs and Energy is pursuing three objectives:
1. Regulatory sandboxes need regulatory scope
If we want to ensure that regulation does not lag behind innovation, we will need more flexibility and “breathing space” in the future. Experimentation clauses and exemptions are key components for shaping the legal framework in an innovation-friendly and future-oriented way. These instruments must be strengthened. One goal of the Regulatory Sandbox Strategy is therefore to give new laws and regulations more flexibility through the increased use of experimentation clauses.
At the same time, we need to ensure that better use is made of existing clauses. How must these clauses be designed in order to provide the greatest possible flexibility while also ensuring regulatory sandboxes are realised in a legally compliant manner? And on what legal level must or can they be established in order to create sufficient flexibility? Is it possible to incorporate a “general clause”? Legal opinions are already being prepared to help answer these questions.
2. Transfer of expertise and networking
We must reduce uncertainties, fill gaps in information and improve networking and the exchange of information between industry, science and public administration. In the context of many ongoing and planned projects, the same questions are being raised: Is this legally possible? Who should I contact? Where can I find potential project partners? What do I have to consider with regard to state aid and competition law and what about questions of liability and insurance? Who can support me?
Finding answers to these questions takes a lot of time and effort, which is often a reason why innovative and promising ideas are not put into practice.
“Handbook for Regulatory Sandboxes”
Our aim is to fill gaps in information, use synergy effects and avoid duplication of work. To this end, the Federal Ministry for Economic Affairs and Energy is currently developing a “Handbook for Regulatory Sandboxes”, which seeks to help the relevant stakeholders ask the right and the necessary questions and find answers to them. At the same time, we want to provide comprehensive information on legal issues, as well as on best practice examples.
The Economic Affairs Ministry held an online consultation in the Regulatory Sandboxes Network in February and March 2019. 83 of nearly 400 stakeholders (companies, start-ups, authorities, universities, etc.) took part.
We have published a summary of the outcome of this consultation here (PDF, 373 KB) (in German), and the results will feed not least into the Handbook for Regulatory Sandboxes.
Research report on regulatory sandboxes, online consultation
The Federal Economic Affairs Ministry commissioned VDI-Technologiezentrum GmbH with preparing an expert opinion entitled “Potential and requirements of regulatory sandboxes”. The company has worked together with the Munich law firm Bird & Bird LLP to study the matter in depth. The expert opinion initially provides a comprehensive screening of existing projects in Germany which use a regulatory sandbox approach at least in part. On the basis of six case studies, the paper then analyses selected sectors and cases to see what obstacles exist during the implementation process, and also what opportunities and possibilities are presented by the projects. The case studies can be downloaded from the following links:
- Delivery Robot Hamburg (PDF, 200 KB) (in German)
- Cooperatives eGovernment in federal structures (PDF, 448 KB) (in German)
- Telemedicine in Baden-Württemberg (PDF, 402 KB) (in German)
- Autonomous bus in Bad Birnbach (PDF, 664 KB) (in German)
- SINTEG: Smart energy showcases (PDF, 440 KB) (in German)
- AutoNOMOS Labs Berlin (PDF, 543 KB) (in German)
The contractors have worked from the case studies to draw up guidelines for the creation of regulatory sandboxes. The practicability of this draft (PDF, 967 KB) (in German) was reviewed by the experts in the Regulatory Sandboxes Network via the online consultation. The members of the network were also asked to present their own examples of interesting examples in practice. The results of the research study and the ideas from the Regulatory Sandboxes Network form the basis for the Handbook for Regulatory Sandboxes (see above). A summary of the results of the consultation processes (PDF, 373 KB) (in German) is available as a download.
“Network for Regulatory Sandboxes”
The goal of establishing a “Network for Regulatory Sandboxes” is to facilitate the exchange of information and networking between stakeholders and to disseminate information on legal possibilities, future competitions in this field and examples from practice from Germany and abroad. The network can also serve to bring together project partners, for example a start-up with an innovative idea with stakeholders who are keen to experiment. Furthermore, an interministerial working group will be set up to strengthen networking between the federal ministries.
On the one hand, the first two pillars of the regulatory sandbox strategy are aimed at creating the basic legal conditions for establishing test areas and, on the other, to create the conditions in which these legal possibilities can be used.
|Interministerial Working Group on “Regulatory Sandboxes as Testing Environments for Innovation and Regulation”|
The Federal Ministry for Economic Affairs and Energy considers regulatory sandboxes as a cross-cutting regulatory policy instrument. They are to be used to design regulatory frameworks in such a way so as to allow innovative business models and new technologies to be realised and promoted. In addition, the Federal Ministry for Economic Affairs and Energy is not only responsible for innovation and digitalisation policy, but also for reduction of bureaucracy and better regulation.
At the same time, the specific areas of application go far beyond the remit of the Federal Economic Affairs Ministry. The 2018 Coalition Agreement (in German) also has the clear goal of advancing the development of regulatory sandboxes and testing environments in many subject areas. Close cooperation between the individual ministries is therefore a key prerequisite for implementing our regulatory sandbox strategy successfully.
In order to facilitate the exchange of information, the interministerial working group “Regulatory Sandboxes" was set up. The inaugural meeting of the working group took place in Berlin on 27 November 2018. There is broad consensus that in this age of digital transformation, regulatory sandboxes are an important and necessary instrument for further developing the regulatory framework and promoting innovation in Germany.
3. Testing regulatory sandboxes in practice
In implementing our own projects, we want to link the testing of innovation and regulation more closely to actual practice and lead the way by demonstrating positive examples. All this is to show that regulatory sandboxes can make a valuable contribution to fostering innovation in Germany. Regulatory sandbox competitions, for example in the area of the sharing economy, the drone industry or elsewhere, are intended to take up and implement ideas from industry. Our common goal is to identify regulatory obstacles and to develop legally compliant solutions to facilitate innovation and gather experience to inform future regulation.
“Regulatory Sandboxes for the Energy Transition”
Parallel to the cross-cutting initiative presented here which aims to strengthen regulatory test sandboxes, the Federal Ministry for Economic Affairs and Energy has created a new funding strand of funding in the 7th Energy Research Programme, which is entitled “Regulatory sandboxes for the energy transition”. Our goal is to accelerate the transfer of technology and innovation from research stations to the energy market by means of implementing large-scale, system-oriented demonstration projects combined with sustainable business models. The aim is to open up and test new regulatory approaches in this field.
In addition, there is another programme entitled “Smart Energy Showcases – Digital Agenda for the Energy Transition” (in German) which has already been set up by the Federal Ministry for Economic Affairs and Energy to address the technical, economic and regulatory challenges of Germany’s energy reforms through using experimentation clauses.
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