EUROPEAN UNION AI ACT

 

The Artificial Intelligence Act (AI Act) is a European Union regulation concerning artificial intelligence (AI). It establishes a common regulatory and legal framework for AI within the European Union (EU).

The AI Act (Regulation (EU) 2024/1689 laying down harmonised rules on artificial intelligence) provides AI developers and developers with clear requirements and obligations regarding specific uses of AI. At the same time, the regulation seeks to reduce administrative and financial burdens for business, in particular small and medium-sized enterprises (SMEs).

The AI Act is part of a wider package of policy measures to support the development of trustworthy AI, which also includes the AI Innovation Package and the Coordinated Plan on AI. Together, these measures guarantee the safety and fundamental rights of people and businesses when it comes to AI. They also strengthen uptake, investment and innovation in AI across the EU.

The AI Act is the first-ever comprehensive legal framework on AI worldwide. The aim of the new rules is to foster trustworthy AI in Europe and beyond, by ensuring that AI systems respect fundamental rights, safety, and ethical principles and by addressing risks of very powerful and impactful AI models.

 

The AI Act:

 Establishes a risk-based approach

The AI Act categorizes AI applications into three risk levels: minimal risk, high risk, and unacceptable risk.

 Protects fundamental rights

The AI Act aims to ensure that AI systems respect fundamental rights and ethical principles.

 Promotes trustworthy AI

The AI Act aims to address the risks of powerful AI models.

 Introduces transparency requirements

The AI Act requires systems like chatbots to clearly inform users that they are interacting with a machine.

 Includes penalties

The AI Act includes penalties for infringements, which are set as a percentage of the company's global annual turnover. Up to 40 million Euro or 7% of global annual turnover

The EU aspires to be the global leader in safe AI. By developing a strong regulatory framework based on human rights and fundamental values, the EU can develop an AI ecosystem that benefits everyone. This means better healthcare, safer and cleaner transport, and improved public services for citizens. It brings innovative products and services, particularly in energy, security, and healthcare, as well as higher productivity and more efficient manufacturing for businesses, while governments can benefit from cheaper and more sustainable services such as transport, energy and waste management.

Recently, the Commission has launched a consultation on a Code of Practice for providers of general-purpose Artificial Intelligence (GPAI) models. This Code, foreseen by the AI Act, will address critical areas such as transparency, copyright-related rules, and risk management. GPAI providers with operations in the EU, businesses, civil society representatives, rights holders and academic experts are invited to submit their views and findings, which will feed into the Commission's upcoming draft of the Code of Practice on GPAI models.

The provisions on GPAI will enter into application in 12 months. The Commission expects to finalise the Code of Practice by April 2025. In addition, the feedback from the consultation will also inform the work of the AI Office, which will supervise the implementation and enforcement of the AI Act rules on GPAI. 

 

These acts and initiatives aim to:

1. Ensure AI transparency and explainability

2. Prevent bias and discrimination

3. Protect personal data and privacy

4. Promote ethical AI development

5. Foster innovation and competitiveness

The AI Act ensures that Europeans can trust what AI has to offer. While most AI systems pose limited to no risk and can contribute to solving many societal challenges, certain AI systems create risks that we must address to avoid undesirable outcomes.

Although existing legislation provides some protection, it is insufficient to address the specific challenges AI systems may bring.

The new rules:

·       Address risks specifically created by AI applications

·       Prohibit AI practices that pose unacceptable risks

·       Determine a list of high-risk applications

·       Set clear requirements for AI systems for high-risk applications

·       Define specific obligations deployers and providers of high-risk AI applications

·       Require a conformity assessment before a given AI system is put into service or placed on the market

·       Put enforcement in place after a given AI system is placed into the market

·       Establish a governance structure at European and national level

The EU's AI regulatory framework is evolving, and organizations operating in the EU should stay informed about the latest developments and ensure compliance.

 

Unacceptable risk AI systems are those that pose significant harm and are strictly prohibited. Examples include:

·       AI systems that manipulate human behaviour through subliminal techniques or exploit vulnerabilities related to age, disability, or socio-economic status.

·       Biometric categorization systems that infer sensitive attributes like race, political opinions, or sexual orientation. These prohibitions aim to protect individuals from harmful AI practices and ensure ethical AI development and deployment within the EU.

·       These AI systems are prohibited to enter the EU markets.

High Risk AI System: The concept of “high-risk AI system” is not explicitly defined. Instead, a group of AI systems are classified as such provided that certain conditions are met.

High risk AI systems:

·       Biometrics

·       Critical infrastructures

·       Employment, workers management and access to self-employment

·       Education and vocational training

·       Law enforcement

·       Migration, asylum and border control management

·       Administration of justice and democratic processes

It must be emphasized, however, that not every AI system in these categories is considered high-risk. There are sub-paragraphs to each of these fields, which must be examined in detail to determine whether a given AI system indeed is considered high-risk or not.

Implication of high-risk AI systems:

·       Establishment of a risk management system

·       Data governance

·       Technical documentation

·       Record-keeping

·       Transparency and information provision to users

·       Human oversight

·       Accuracy, robustness, and cybersecurity

Compliance with these requirements is mandatory for entities.

Low-risk AI systems under the EU AI Act are those that pose minimal threats to rights or safety. These systems are subject to minimal regulatory requirements, primarily focusing on transparency. Examples include: