Introduction to the EU and the EU AI Act

Introduction to the EU and the EU AI Act

1. Introduction to the EU region and the development of its AI legal policies on the world mapGe

The European Union (EU) is an economic and political union consisting of 27 member states located in Europe. The EU was established in 1993 with the goal of promoting economic and political cooperation between its member states.

Geographically, the EU covers most of the European continent, with an area of more than 4 million km² and a population of more than 741 million people. The EU is the world's third-largest economy (after the US and China) by nominal GDP and one of the most important trading regions, accounting for one-sixth of global trade.

In recent years, the EU has taken an active role in shaping AI Policy, including the following initiatives: 

  • In 2018, the EU published a Coordinated Plan on Artificial Intelligence (AI). It is a shared commitment between the Commission, EU Member States, Norway and Switzerland to maximize Europe's global competitiveness potential. The initial plan identified actions and funding tools for AI adoption and development across sectors, while also encouraging Member States to develop their own national strategies. 
  • In 2020, the EU published the White Paper on Artificial Intelligence, defining the legal and ethical framework in this market for member countries. The European Commission (EC) is committed to promoting the use of AI and addressing the risks associated with the use of this new technology. The EC initially adopted “soft law” with the release of its Non-Binding Ethical Principles on AI and Policy and Investment Recommendations in 2019. Since then, the EU has begun a process of changing its approach. AI-related legislation, calling on members to develop harmonized rules to develop this market.
  • In April 2021, the European Commission proposed the EU's first regulatory framework for AI. It says that AI systems that can be used in various applications will be analyzed and classified according to the risk they pose to users. Different levels of risk will mean more or less regulation.

2. Latest developments of the EU AI Act

On March 13, 2024, the European Parliament officially passed the Artificial Intelligence (AI) Act after 5 years of negotiations. This is the first law in the world to comprehensively regulate the field of AI, serving as a guideline for other countries in managing this rapidly developing technology.

The main content of the AI Act is to classify AI systems according to risk level:

  • Unacceptable risk: Prohibit the use of AI for purposes such as emotion recognition in schools or police wide-area facial scanning systems.
  • High risk: Apply strict management measures for AI in the medical field, electricity and water networks, etc.
  • Limited risks: Require transparency about the operations of AI systems.
  • Low risk: Voluntary requirements and code of conduct apply.

Companies can choose to comply with voluntary requirements and codes of conduct. Those who do not comply with mandatory regulations can be fined up to 35 million euros or 7% of total revenue, depending on the violation and the size of the company.

The European Parliament has also proposed the establishment of an AI Office. This is a new EU agency to support the harmonized application of the AI Act, guiding and coordinating joint cross-border investigations. 

Regulations related to AI models such as ChatGPT will take effect 12 months after the law is officially promulgated. Companies must then comply with most other regulations after two years. The law is expected to be applied after being passed by EU member states in April and officially announced in May or June.

This event marks an important turning point in the global governance of AI, demonstrating the EU's commitment to developing safe and human-centered AI.

Source: AI Act, All you need to know to understand and comply with the EU law on AI, France Digitale, Wavestone and Gide

3. Prominence of the EU AI Act

Some highlights of the EU AI Act:

  • The AI Act classifies AI applications into four risk groups (risk-based approach): no risk, low risk, high risk, and unacceptable risk. AI applications that fall into different risk categories will be subject to different regulatory requirements.
  • The AI Act requires AI developers and implementers to provide clear information about their AI systems, including how they work, the data used, and potential risks.
  • The AI Act establishes a new market surveillance system to ensure that AI systems comply with regulatory requirements.
  • The AI Act empowers national regulators to enforce its provisions and impose sanctions for violations.

This Act is expected to have a significant impact on the development and use of AI in Europe and around the world.

4. Impact of the Act on Tech Business in Vietnam Serving the EU Market

The EU's AI Act could have a significant impact on Vietnamese technology businesses, especially those with customers in the EU market:

  • Businesses will need to comply with the new regulatory requirements of the AI Act, including risk classification for AI systems, ensuring transparency, implementing security measures, and complying with regulatory requirements for data recording. Complying with these regulations may require businesses to invest in resources, change operating processes, and develop new technologies.
  • Compliance with new regulatory requirements can increase costs for businesses, including expenses for legal, compliance and technical activities. This can affect business profits and lead to price increases for products and services.
  • However, the AI Act may also bring some opportunities to Vietnamese technology businesses. Businesses can develop AI products and services that comply with the requirements of the EU AI Act, which can help businesses access the EU market and expand their customer base. Additionally, businesses can participate in AI research and development projects supported by the EU.

The EU's AI Act could have both positive and negative impacts on Vietnamese technology businesses. Therefore, companies need to proactively learn about the AI Act, assess its impact on their business operations, and develop appropriate strategies to comply with and take advantage of the opportunities the law brings.

5. Why is it necessary to comply with the EU AI Act? How can Humane AI Asia help customers?

For businesses, especially Vietnamese technology businesses with customers in the EU market, compliance with the EU AI Act is essential for the following reasons:

  • The EU AI Act is a law that is enforceable in all EU member states. Failure to comply with this law can result in severe sanctions, including fines and business bans.
  • Complying with the EU AI Act will help businesses build an image as a reputable business, operating responsibly and complying with the law. This can enhance trust among customers and partners and attract new customers.
  • The EU AI Act encourages responsible and ethical AI development. Compliance with this law will help businesses participate in AI research and development projects supported by the EU, and contribute to promoting innovation in the field of AI.

Humane AI Asia is a company providing responsible and ethical AI solutions and consulting services. The company can help customers comply with the EU AI Act and other relevant AI regulations, as well as develop and deploy AI systems that are safe, secure, transparent and responsible. Below are some specific services that Humane AI Asia can provide to customers:

  • Helping customers evaluate the potential impact of AI on their businesses and customers
  • Develop a Responsible AI strategy that aligns with your client's business goals
  • Advise on AI-related regulatory requirements, including the EU AI Act
  • Develop safe, secure, transparent and responsible AI systems
  • Deploy AI solutions that help customers comply with regulatory requirements
  • Provides tools and resources to help customers manage AI risks
  • Provide Responsible AI training to customers' employees
  • Raise awareness of ethical issues related to AI
  • Promote a Responsible AI culture in businesses

Reference: EU AI Act: first regulation on artificial intelligence, European Parliament

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