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AI Act Has Been Adopted

On the 13th of March, the European Parliament’s Plenary voted officially in favour of the AI Act. 

The AI Act is considered the world’s first comprehensive legal act that will regulate the use and deployment of artificial intelligence and artificial intelligence tools. 

After a formal final linguistic review and approval by the Council, the AI Act will be published in the Official Journal of the European Union. The AI Act will officially enter into force 20 days after publication in the journal, which will most likely happen in May at the latest. 

The scope of the AI Act

  • The AI Act applies to the providers, which are placing on the market or putting into service AI systems or who are placing on the market general-purpose AI models in the European Union, irrespective of whether those providers are themselves established or located within the European Union or in a third country. 
  • The deployers of AI systems that have their place of establishment or are located within the European Union. 
  • Providers and deployers of AI systems that have their place of establishment or are located in a third country, where the output produced by the AI system is used in the European Union. 
  • The importers and distributors of AI systems.
  • The product manufacturers placing on the market or putting into service an AI system together with their product and under their own name or trademark.
  • The authorised representatives of providers, which are not established in the European Union.
  • The affected persons that are located in the European Union.


The timeline of the application of the AI Act

Most of the provisions of the AI Act will start applying 2 years after the entry into the force of the AI Act, i.e. 2026. However, there are also exceptions. Namely, provisions related to the prohibitions will become applicable 6 months from the entry into the force of the act, i.e. November 2024 and the rules concerning the general purposes AI will apply 12 months after the entry into the force of the AI Act, i.e. May 2025. 

Fines for infringements

The AI Act also includes sanctions for violations of the AI Act. Violations of banned AI applications will be subject to fines ranging from €35 million or 7% of global annual turnover (whichever is higher). The provision of incorrect information about AI can result in a fine of 7.5 million or 1.5% of global annual turnover. Other types of infringements can result in fines in the amount of €15 million or 3% of global annual turnover.  The AI Act also foresees fines for small or medium-sized enterprises and start-ups that violate the AI Act, but those fines will be smaller. 

Action points for businesses to get ready for the AI Act

The companies should carry out gap analysis into their systems to assess their artificial intelligence systems to identify possible areas, which need to be worked on to stay compliant with the AI Act.

The organisations should also conduct due diligence into their systems to ensure that they have quality data sets and to see whether all the necessary safeguards related to data protection and security are deployed in the right way.

The organisations should also assign responsibilities related to compliance with the AI Act and set up formal governance.

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