The European Union’s Artificial Intelligence Act (EU AI Act) is a pioneering legislative framework designed to regulate AI technologies within the EU, aiming to ensure ethical development and deployment of AI systems. Adopted by the European Parliament on March 13, 2024, and approved by the EU Council on May 21, 2024, the Act entered into force on August 1, 2024. Its provisions will be phased in over the coming years, with full application expected by 2026.
Key Provisions of the EU AI Act:
- Risk-Based Classification: AI systems are categorized into four risk levels: unacceptable, high, limited, and minimal. Unacceptable-risk AI systems, such as those involving social scoring by governments, are prohibited. High-risk AI systems, including those used in critical infrastructure, education, and employment, are subject to strict obligations.
- Transparency Requirements: AI systems interacting with humans, generating deepfakes, or used for biometric categorization must inform users of their AI nature to ensure transparency.
- Data Governance: High-risk AI systems must adhere to robust data governance practices, ensuring data sets are free from biases and errors to maintain system integrity and fairness.
- Human Oversight: Implementing appropriate human oversight mechanisms is mandatory for high-risk AI systems to prevent or minimize risks to health, safety, or fundamental rights.
Implications for European-Based Businesses:
- Compliance Obligations: Businesses deploying high-risk AI systems must establish comprehensive risk management systems, maintain detailed technical documentation, and ensure human oversight, which may require significant operational adjustments.
- Penalties for Non-Compliance: Non-compliance can result in substantial fines, reaching up to €30 million or 6% of the company’s global annual turnover, whichever is higher.
- Innovation Considerations: While the Act aims to foster trustworthy AI, some businesses express concerns about potential constraints on innovation due to compliance costs and regulatory burdens.
How Connected Risk Can Assist:
Connected Risk™ offers a holistic Governance, Risk, and Compliance (GRC) platform that enables organizations to manage their compliance with the EU AI Act effectively.
- Integrated Compliance Management: The platform streamlines data organization and accessibility, enhancing the efficiency and effectiveness of compliance programs.
- AI Governance Management: Connected Risk™ provides robust support for managing AI and machine learning models, empowering organizations to navigate associated risks diligently.
- Low-Code Platform: Built on a next-generation, low-code platform, Connected Risk™ allows for the expansion of solutions with practical applications tailored to specific organizational needs.
By leveraging Connected Risk™, businesses can align their AI systems with the EU AI Act’s requirements, ensuring compliance while maintaining operational efficiency and fostering innovation.
This summary of relevant regulations and any additional regulatory information that is displayed on Empowered Systems’ website is provided for informational purposes only and does not constitute legal advice. We advise that you obtain advice from a lawyer or appropriate legal counsel.
