21.05.2024
Following the successful vote of the European Union Parliament to adopt the EU Artificial Intelligence Act (the “AI Act”) on the 13th of March 2024, the Council of the European Union has, on the 21st of May 2024, approved the AI Act which serves as the first regulatory framework of its kind on artificial intelligence.
The Council passed the new law with the aim of encouraging and promoting the development and investment in artificial intelligence in Europe whilst safeguarding the fundamental rights of individuals.
The Act applies to sectors covered by European Union legislation with certain exceptions, such as systems used for military and research, and covers all parties in a typical supply chain, including importers and developers.
It takes a risk-based approach with stricter rules pertaining to AI systems that put the fundamental human rights and freedoms at greater risk. AI systems with a minimal risk would be subject to light transparency obligations whilst high risk AI systems would be subject to several requirements to access the EU market.
Penalties for infringements of the AI Regulation will be either a percentage of the company’s global annual turnover from preceding financial year, or a predetermined amount, depending on which is higher. For SMEs and start-ups, a proportional penalty would be set.
The AI Regulation will come into force twenty days after its publication in the EU’s Official Journal and will go into effect two years after.
N.B. The above is only intended to serve for information purposes and does not constitute legal advice. Should you wish to obtain more information and/or specific advice, you are invited to reach out to our team of qualified professionals who will guide you further.